WASHINGTON (Reuters) - Some business groups, upset about budget and regulatory policies they say are costing jobs, are accusing President Barack Obama of pursuing an agenda that is hurting the U.S. economic recovery.
The criticism comes amid a tepid pace of private-sector job creation and the White House is responding by saying a lack of regulations triggered the economic crisis and that a balance is needed to protect Americans.
The issue could give Republicans a potent weapon in the November elections in which they hope to overturn the dominance in the Congress of Obama’s Democrats.
The U.S. Chamber of Commerce, a lobby that represents big businesses, is to lay out its concerns with Obama’s policies at a “jobs for America” summit Wednesday in Washington. Chamber CEO Tom Donohue is to issue an open letter to Obama and Congress that will urge “immediate action to address the new regulatory stranglehold placed on America’s job creators.”
Douglas Holtz-Eakin, an economist who was a top adviser to 2008 Republican presidential candidate John McCain, said Obama’s agenda has “nothing in it” for the business community.
“We are growing too slowly,” said Holtz-Eakin, a former director of the Congressional Budget Office. “Households are broke. Governments have to retrench. The only places to get strong growth are in the business community and in net exports and that’s where they have nothing.”
Longtime Obama adviser Valerie Jarrett, the White House point person for outreach to the business community and other outside groups, said the administration’s agenda is fostering growth, not stifling it.
“The facts are clear that President Obama’s policies have been instrumental in bringing back our economy from the brink of the largest economic meltdown since the Great Depression,” she told Reuters.
Jarrett said when Obama took office in January 2009, jobs were plummeting by 700,000 and the stock market was in freefall. “We’ve turned that around and now we’re seeing for six straight months positive job growth,” she said.
In comments that echoed those of some prominent chief executives and business groups, Holtz-Eakin called Obama’s recently passed healthcare plan and proposed legislation to cap carbon emissions examples of regulatory overreach. He also said large budget deficits are spurring uncertainty and worries among businesses about the potential for higher taxes.
Ivan Seidenberg, chief executive of Verizon Communications, in a speech last month said there was a “disconnect” between Washington and the business community that is harming job growth.
“In our judgment, we have reached a point where the negative effects of the proposed policies are simply too significant to ignore,” said Seidenberg, who is chairman of the Business Roundtable.
The sweeping financial regulatory reform that is close to passage in Congress is another point of criticism for some groups representing business and finance.
In populist rhetoric that plays well with many middle-class U.S. voters, Obama has labeled executives at big banks “fat cats” and scolded those firms for resisting tough regulations. He also has at times taken a stern tone toward healthcare companies and BP Plc over its Gulf oil spill.
Republicans have seized on such comments to try to hammer Obama with the anti-business accusation and the White House has tried to turn such criticisms against Republicans.
Obama has mocked House Republican leader John Boehner’s comparison of the financial reform bill to using a nuclear weapon to kill an ant. Obama has said the remark shows Republicans are out of touch with ordinary Americans.
William Galston, a scholar at the Brookings Institution who was President Bill Clinton’s domestic policy adviser, said Obama’s agenda is addressing excesses in the private sector that were partly responsible for economy’s “near-death” experience during the financial meltdown.
“This represents a new balance and there are some folks in the business community who don’t much like it,” Galston said. “I can understand that but it doesn’t mean that Obama is anti-business. It means he has a different conception of what a modern capitalist economy needs in order to sustain itself.”
Businesses last month welcomed Obama’s promise at the Group of 20 summit in Toronto to complete a long-stalled free-trade agreement with South Korea. He also has pledged to reinvigorate the effort to ratify trade deals with Colombia and Panama.
At a private G20 luncheon, Obama spoke to leaders about ideas for changing the Doha round of world trade talks.
But businesses have expressed frustration that Obama has not given the issue of trade a lot of attention until recently.
“He’s certainly playing catch up in the area of trade,” Galston said. “I think that in candid private discussions the administration would probably acknowledge that that ball has not really been moved forward by this administration.
But Galston added, “In fairness, they have had a lot of other things on their plate.”
Asked about the trade agenda, Jarrett said Obama considers increasing U.S. exports an urgent priority but that it is going to take time. “Rome wasn’t built in a day,” she said.
Writing by Caren Bohan and Steve Holland; Editing by Bill Trott
Our Standards: The Thomson Reuters Trust Principles.