Business leaders say Obama's economic policies stifle growth
Wednesday, June 23, 2010
The chairman of the Business Roundtable, an association of top corporate executives that has been President Obama's closest ally in the business community, accused the president and Democratic lawmakers Tuesday of creating an "increasingly hostile environment for investment and job creation."
Ivan G. Seidenberg, chief executive of Verizon Communications, said that Democrats in Washington are pursuing tax increases, policy changes and regulatory actions that together threaten to dampen economic growth and "harm our ability . . . to grow private-sector jobs in the U.S."
"In our judgment, we have reached a point where the negative effects of these policies are simply too significant to ignore," Seidenberg said in a lunchtime speech to the Economic Club of Washington. "By reaching into virtually every sector of economic life, government is injecting uncertainty into the marketplace and making it harder to raise capital and create new businesses."
Seidenberg's remarks reflect corporate America's growing discontent with Obama. The president has assiduously courted the nation's top executives since taking office last year, seeking their counsel on economic policy in the wake of the recession and issuing dozens of invitations to the White House. In return, the Roundtable has generally supported the president's policies; it was the only major business group to back Obama's successful push for an overhaul of the health-care system.
In recent months, however, that relationship has begun to fray. First, Democrats included a provision in the health-care bill -- over the Roundtable's objection -- that reduced corporate subsidies for drug coverage to retirees, a move that could cost big companies millions of dollars. Then the EPA unveiled rules to regulate greenhouse-gas emissions even without climate-change legislation, creating uncertainty about the future cost of energy.
The final straw, said Roundtable president John Castellani, was the introduction of two pieces of legislation, now pending in Congress, that the group views as particularly bad for business. One, a provision of the administration's financial regulation overhaul, would make it easier for shareholders to nominate corporate board members. The other would raise taxes on multinational corporations. The rhetoric accompanying the tax proposals has been particularly harsh, Castellani said, with Democrats vowing to campaign in this fall's midterm elections on a platform of punishing companies that move jobs overseas.
"We had been working very closely with them," Castellani said, but things kept popping up that were "not just an irritant but a distraction" to promoting economic growth.
White House spokeswoman Jennifer Psaki disputed that notion. "The president has consistently pursued policies designed to create a better climate for American businesses in order to foster job creation, innovation and economic growth," she said via e-mail. "We have always had an open door to the business community, and we look forward to an ongoing dialogue."
A White House official said the administration has a "very good relationship" with Seidenberg and expects that to continue. Seidenberg is one of a number of chief executives who have met several times with Obama and repeatedly with senior officials. In February alone, he was invited to dinner with Obama and to the president's Super Bowl party.
Seidenberg, whose company is at odds with the Federal Communications Commission over a plan to regulate broadband providers, first expressed his concerns about the direction of Democratic economic policy in a meeting last month with White House budget director Peter Orszag. When Orszag asked for specifics, Seidenberg polled the members of the Business Roundtable and a sister organization, the Business Council. The result was a 54-page document, delivered to Orszag on Monday, chock full of bullet points about actions taken or considered by a wide array of executive agencies, including the White House Middle Class Task Force and the Food and Drug Administration.
"We believe the cumulative effect of these proposals will help defeat the objectives we all share -- reducing unemployment, improving the competitiveness of U.S. companies and creating an environment that fosters long-term economic growth," Seidenberg wrote in a cover letter for the document, titled "Policy Burdens Inhibiting Economic Growth."
In his speech, Seidenberg said he has been "encouraged" by the administration's response to the letter, which includes an offer of additional meetings to discuss the specific complaints. And he denied that his relationship with Obama has deteriorated, saying he has visited the White House more times in the past year than "in the previous 16."
Obama "is not ignoring us," Seidenberg said. The problem, he said, is translating those discussions into policy actions that do not simply expand government, but help a nervous private sector "create work" in uncertain times.