UPDATE 4-White House disbands jobs council despite slow employment growth

Thu Jan 31, 2013 6:51pm EST

By Roberta Rampton

WASHINGTON Jan 31 (Reuters) - The White House on Thursday disbanded President Barack Obama's jobs council, a group of high-profile chief executives who gave advice on how to spur employment growth, even as 12 million Americans remain out of work.

White House spokesman Jay Carney said the council was set up with a two-year lifespan that was now expiring.

But Republicans quickly pounced on its demise as sign that Obama lacked credibility on jobs, noting it came the day after data showed the U.S. economy contracted in the fourth quarter.

In place of the jobs council, the administration said it will begin an expanded effort to work with the business community and other groups to boost economic growth, cut debt and fix a broken immigration system.

"It's a broad engagement strategy to make sure the president's message is getting out to the American people, because with their voices involved we think that we can still do big things," Obama adviser Valerie Jarrett, his point person on working with business, told Reuters in a recent interview.

EASY TARGET

The jobs council, chaired by Jeff Immelt of General Electric , had not met with Obama for more than a year.

From its start, it was an easy target for critics because its ability to act was limited, and its mandate was to serve a modest advisory role to the president.

The U.S. jobless rate hangs stubbornly at 7.8 percent, down from a peak of 10 percent in the depth of the recession after Obama took office in January 2009. Economists expect a report on Friday to show little improvement.

"Over the past four years, President Obama has seemed far more interested in political show votes and tax gimmicks than actually focusing on what Americans need: more jobs," said Senator Mitch McConnell, top Republican in the Senate.

LIST OF IDEAS

The council was created in January 2011 as Obama sought to soothe businesses alarmed at the potential cost of his health care reforms and sweeping regulations on banks.

Obama recruited Immelt, a Republican, to lead the jobs council and met four times with them.

The panel's job was to give Obama advice on strengthening the economy and get more people back to work. It collected 90 recommendations on investing in infrastructure, streamlining permits for large projects and ramping up education.

Of the 60 ideas that could be done without Congress, the administration made "significant progress" on 54 of them, according to a report from the council in December.

For example, Obama told federal agencies to look for ways to get rid of redundant regulations, even as new health care and financial regulations were added. Visa wait times for tourists from key markets like China and Brazil were reduced.

Carney blamed Republicans in Congress for blocking legislation that would have created more infrastructure jobs.

Policy experts said that while jobs councils and other business engagement strategies can be helpful, Obama needs to find concrete ways to grow the economy.

"If he doesn't have growth, he could find himself in an unhappy midterm (election) and without the political capital to get what he wants to get done," said Elaine Kamarck, who was a top adviser in the Clinton White House and now leads a management initiative at the Brookings Institution think-tank.

The White House emphasized that it has continued to talk with business in other ways. For example, on Wednesday, senior White House officials spoke with Greg Brown of Motorola, Dan Akerson of General Motors and others on Obama's immigration reform proposals.

John Engler, president of the Business Roundtable, which represents large companies, said he is also encouraged that Obama recently told the business community he might back some sort of territorial tax system.

Corporate America has said such a regime, which would exempt offshore corporate profits from U.S. taxation, would make businesses more competitive against foreign rivals.

"We are not worried about our ability to communicate with the president and White House staff. We think that will be fine," Engler said.