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November 09, 2012 11:41 AM How Obama Can Heal His Rift With Business

By Jonathan Alter

U.S. presidents’ second terms often turn out to be failures in domestic policy, largely because lame ducks are almost by definition political figures of the past. Yet President Barack Obama’s winning coalition is aligned with the future of the country, giving him a fresh chance to lead.

To do so, he must repair his badly damaged relationship with the business community, which overwhelmingly supported Mitt Romney. It’s doable. From avoiding the so-called fiscal cliff, to an overhaul of immigration laws, to tax reform, there’s much more common ground than the combatants could acknowledge during the campaign.

The first task is for both the White House and the business world Wall Street and Main Street) to acknowledge where it was wrong about the other side.

From the start, Obama failed to include enough business executives in his administration. His friend and senior adviser Valerie Jarrett once ran a Chicago real-estate company, but she was seen by business as more of a gatekeeper and liaison in the White House than a true friend. Otherwise, there was no one around the president who had met a payroll, unless you include aides who had run political consulting firms.

The President’s Council on Jobs and Competitiveness did some good if little-noticed work, but it was never fully integrated into the policy-making apparatus.

Burdensome Regulations

During his tenure as administrator of the White House Office of Information and Regulatory Affairs, Cass R. Sunstein, a Harvard University law professor and now a fellow Bloomberg View columnist, eliminated more burdensome regulations than he was given credit for. Still, important business activity — from obtaining a government contract to getting a mortgage — remains mired in red tape.

For its part, business must stop acting whiny and petulant about the president. I’m astonished that so many wealthy people were wounded because Obama generically referred to “fat cats” three years ago on “60 Minutes.” They need to grow up and recognize that he needed to position himself as the champion of the middle class to get re-elected.

Top executives also need to cut out the “socialist” talk and admit that the president is anything but a radical. (Obama’s health-care law, for instance, is pretty much the Bob Dole-Mitt Romney plan).

And just because the rest of the world reveres business leaders and pretends to listen to their wisdom, Obama doesn’t have to follow suit. He’s the president.

If chief executive officers can put aside their regrets over the outcome of the election, they can be important brokers between the administration and Republicans in Congress.

After Alan Simpson and Erskine Bowles issued the recommendations of their bipartisan deficit-reduction panel in 2010, almost 100 CEOs signed a letter of support for their plan. This meant chief executives favored a mix of budget cuts and tax increases that was in many respects to the left of what Obama offered House Speaker John Boehner in the scuttled grand-bargain talks of mid-2011. That Obama never fully embraced Simpson- Bowles for political reasons is now irrelevant. The executives who expressed their support for Bowles-Simpson two years ago need to come to Washington and stand behind the president, who has a mandate for his “balanced” approach.

In this mission, they can be joined by their erstwhile candidate. Obama said in his victory speech that he looked forward to sitting down with Romney (Franklin D. Roosevelt did something similar with his 1940 opponent, Wendell Willkie). Now that he no longer has to worry about the right wing of his party, Romney could help sell a deal to the business community.

Concessions Needed

The same goes for former President Bill Clinton, who can persuade Democratic interest groups that they have to make concessions. All hands will be needed on deck to keep the ship from going over the falls.

Comprehensive immigration reform is the next big item for business leaders. The tired Tea Party argument — that we must secure our borders first — is moot. The borders are quiet, with fewer illegal crossings than in decades. Because Republican House members are still worried about primary challenges from the right in 2014, they will need the full force of the business community in their districts to be mobilized around reform. Beyond their business interests, Republicans know that if they don’t increase their share of the Hispanic vote (Romney received about 27 percent), they are doomed as a party.

Finally, tax reform. Obama will use his re-election and the leverage of the Jan. 1 expiration of the George W. Bush-era tax cuts to insist that the marginal tax rates for the wealthy be allowed to revert to the higher levels that prevailed during the Clinton administration.

That doesn’t mean tax reform is dead. During the first debate, Romney offered an intriguing suggestion: Instead of getting bogged down in an impossible argument over ending cherished deductions, all such benefits could be capped at a certain percentage of a taxpayer’s income. Democrats are receptive to the idea and to radical tax simplification that would be a welcome relief even without huge reductions in rates.

I’m not being Rodney King, asking “Can we all get along?” Noisy partisanship is the norm in Washington. But if the White House can listen more, if business can complain less, and if the Republicans can develop a clear-eyed vision of the future of the party, 2013 could be a lot more productive than expected.

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Jonathan Alter , a columnist for Bloomberg View, is the author of "The Promise: President Obama, Year One." He is a contributing editor at the Washington Monthly.

Comments

  • bluewave on November 10, 2012 7:57 AM:

    Really? You get paid to write this stuff? Look around you Mr. Alter-- business executives aren't ACTING whiny, spoiled and petulant, they ARE whiny, spoiled and petulant. Oh, and entitled. Did I mention entitled? From the NHL owners determined to destroy their own brand to many of the main street Mom & Pop shops, they share a breathtaking contempt for the people who actually perform the work that makes them their money. They could no more notice that Obama is, in all essential ways a Rockefeller Republican than Archie Bunker could notice that "Meathead" was actually a pretty decent guy who cared about his daughter and was trying to help build a better life for them by moving up the ladder through education.

    As the fed up wife says when she finally walks out on her uncommunicative lump of a husband who's too attached to traditional notions of gender and power to build a real relationship, "It's not me, it's you". The Daddy party will continue its retreat into the mancave, utterly baffled by modernity, until it dies or manages to devolve 21st century America into Christian Afghanistan.

    You and your media friends keep thinking they don't really mean the crazy-sounding things they say, because, well, how could they? At least give them the respect of believing they mean it, because, trust me dude, they DO.

  • c. on November 10, 2012 9:19 AM:

    This is a wonderful example of how completely the moneyed class has coopted the press.

    Everyone of the completely baseless complaints about the President are here, with the President being the one that needs to capitulate and the rich "business community" just needs to whine less.

    A couple of points, "burdensome regulation" does not spring out of government. It it the rational reaction the the corrupt, life threatening, actions that the "business community" regularly engages in when left to their own devices. If business spent half the time they spend complaining on actually making their businesses easier to comply, we'd all be better off.

  • Cranky Observer on November 10, 2012 10:19 AM:

    "Burdensome regulation" Such as regulation prohibiting fouling the waterways with waste? Regulation requiring the automakers to stop pretending they couldn't build cars with 3x the gas mileage when they actually could (and as it turned out, with 2x the performance as well - funny how efficiency works that way)? Burdensome regulations prohibiting the financial sector from destroying the worldwide economy? Burdensome regulations requiring food sellers to ensure their products don't contain excess amounts of feces and rat hair? Those sorts of "burdensome regulations"?

    Cranky

    nfsail cursed - 1st try

  • square1 on November 10, 2012 10:19 AM:

    Shorter Johnathan Alter: I want to be invited to Bloomberg's holiday party.

  • c u n d gulag on November 10, 2012 1:08 PM:

    Sorry, Mr. Alter, but I ain't buyin' all of this.

    We DO need to increase the taxes on the rich, keep them lower for the middle class and poor, and simplify our tax codes.

    We do NOT need to make some "Grand Bargain."

    First, there's really no problem at all with SS that a removal of the cap won't cure. Lower and middle class people pay FICA taxes on their ENTIRE wages. Why shouldn't people who make north of $106,800?

    Medicare and/or Medicare should also NOT be changed, except to increase efficiencies. Doctors and providers make too much money off of Seniors, and doing multiple tests and procedures that probably are not necessary.

    And what we need to change the most, is our Corporate Tax structure.
    Too many companies have too many ways of skipping paying their taxes.
    So, yes, sure, you can lower their rates - but make sure that EVERY company that makes a profit, pays their fair share of taxes. Right now, Mom & Pop businesses pay their fair share, and mega-global-corporations don't.
    Hell, many individual taxpayers pay MORE than the mega-global corporations who rake in huge profits in America.
    That is idiotic.

    The "Grand Bargain" talk, is a way to sugar-coat moving money and benefits from the lower and middle classes, and moving the cash to the wealthier people.

    Many of us are living on the edge already. Sure, pundits can work well into their 70's, and many don't need or want to retire, but what about construction workers, bartenders, waitresses, retail reps who have to stand on their feet their whole shifts? Do we really need to raise the age of eligibility? Not pay COLA's?

    Hell, you want to improve the economy tomorrow? Take that SS cap off today, and RAISE current and future retiree's monthly payments.
    The working classes got screwed in Reagan's SS "Grand Bargain."
    There's no reason to replay that.

    My 86 year-old father died 6 months ago, hoping that Congress would finally vote and give him the SS money that was owed him, because of a bubble, or donut-hole, where people born before 1930 were short-changed.
    Congresses strategy of waiting those people out has worked. There's not a lot of them left.

    NO "GRAND BARGAIN!!!" PERIOD!!!!!

  • JoyousMN on November 11, 2012 9:59 AM:

    OK, so you are writing this from some alternate reality where Obama has decided to campaign like a Democrat, but lead with all of Mitt Romney's failed ideas?

    This post is satire, right? Right?