Following his first news conference since the election, President Obama met with a dozen CEOs on Wednesday afternoon to signal a new start with a group that has viewed his administration as hostile to the business community.
Three of the participants served on Obama’s Council on Jobs and Competitiveness. Attendees include the heads of Pepsi, Xerox, Walmart, Honeywell and American Express, but in a rebuff to Wall Street no major banks were invited.
The administration has a rocky history with outreach to the business community. Obama’s signature financial reform legislation—Dodd-Frank—caused a deep rift with Wall Street, partly because Elizabeth Warren, who had been targeted to lead the Consumer Financial Protection Agency, nettled bankers with her direct and blunt style.
During the campaign, the administration’s attacks on Romney’s stewardship of Bain Capital made many leery of Obama. His “You didn’t build that,” comment didn’t help mend fences either, and business people felt they were being singled out and demonized.
Obama scorned a recommendation by his own jobs council led by General Electric’s Jeff Immelt—another attendee yesterday— to adopt a territorial system that excludes overseas income in the corporate tax reform framework released earlier this year.
Mark Bertolini, CEO of the health insurance company Aetna and a participant in the Wednesday meeting at the White House, told CNBC earlier this month that Obama should handle the negotiations like a business deal.
“I think what the CEO of our nation needs to do is convene, set the agenda, and say we don't come out of the room until we've got a deal,” Bertolini said.
Corporate America has applauded efforts to avoid the fiscal cliff and accepted the possibility of higher personal income taxes, but it has lobbied for an extension of the Bush-era tax rates for a year so that a broader tax overhaul can be discussed without the economy hanging in the balance.
Business leaders have been clamoring for action on the fiscal cliff and urging the president and Congress to delay the tax increases in favor of long-term tax reform. The U.S. Chamber of Commerce sent lawmakers a letter yesterday co-signed by 232 other business groups requesting the continuation.
Republicans also face pressure to uphold the lower income tax rates from conservative groups such as Americans for Prosperity, which has 2.3 million activists on its rolls and mobilized voter turnout during the election.
“We stand united in our opposition to using national security as a guise to raise taxes,” the letter by conservative groups said, “and to Congress going back on its word regarding reducing spending.”
Whether Obama is serious about forging alliances with business or simply playing for the cameras will be evidenced during the cliff negotiations. The next few weeks will determine whether Americans get presents under the tree or a lump of coal in their stockings.