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ANALYSIS-Obama seeks to counter anti-business image

WASHINGTON, June 27 (Reuters) - Republicans taking aim at Barack Obama's economic plans hope to cast the Democratic White House hopeful as a tax-and-spend liberal who would burden businesses with heavy-handed regulations.

But Obama and his advisers believe they can shake off the label.

After clinching the Democratic presidential nomination on June 3, Obama took a three-week economic tour during which he met not only with workers struggling with surging health care and fuel costs, but also with corporate leaders such as JPMorgan chief executive Jamie Dimon and executives from Detroit's Big Three automakers and Boeing Co.

The Illinois senator has made "change" his campaign slogan and says he will not be beholden to special interests like Big Oil and the large pharmaceutical companies. But Jason Furman, his top economic adviser, said that does not mean he is anti-business, nor does he view government as having the answer to every problem.

"He's somebody who doesn't believe in the traditional left-right divide and the traditional left-right approaches," Furman told Reuters in an interview. "It's not an economic philosophy you could say is libertarian or conservative. It's not one you could say is paternalistic or liberal."

The Obama campaign is proposing to make government more user-friendly by offering Americans a simpler way to file taxes and the middle class a tax cut in the form of $500 credits for single taxpayers and $1,000 for married couples. A more traditional Democratic approach is to offer "targeted tax cuts" for expenditures like child care.

Obama, who will face Republican John McCain in the November election, emphasized at an energy forum this week that he wants government to help promote initiatives like developing clean fuels but also to "get out of the way where it is blocking progress."

DEMOCRATS "REGULATION-HAPPY"

"I'm a Democrat and there have been times in the past when Democrats have gotten so regulation-happy that we don't think in terms of just efficiency," Obama said. "Well, I'm not in favor of government just for the sake of government."

In an effort to paint Obama as a conventional liberal, McCain's allies have sought to liken some of his ideas such as a tax on windfall oil profits to those of Jimmy Carter, whose presidency in the late 1970s was associated with economic sluggishness and high inflation.

Another focus of Republican attacks is Obama's pledge to roll back President George W. Bush's income tax cuts on those making over $250,000 a year and to consider higher capital gains and dividend taxes.

"The kinds of things that he views as costless put a burden on businesses and that puts workers in the crossfire," said Douglas Holtz-Eakin, McCain's top economic adviser, who contends the tax increase would curb growth because many small firms pay through the income tax code rather than the corporate one.

Holtz-Eakin said Obama's proposals on health care and climate change would add layers of regulation that would be harmful to businesses.

Because of the 1990s boom years under former President Bill Clinton, it has become harder for Republicans to pin the anti-business label on Democratic candidates. Clinton's treasury secretary, Robert Rubin, a former chairman of Goldman Sachs, was hugely popular on Wall Street and had a reputation as a deficit hawk.

By contrast, Bush named two treasury secretaries, Paul O'Neill and John Snow, who lacked the confidence of Wall Street, and Bush himself is viewed even by some in his own party as fiscally lax. Bush's current treasury chief, Henry Paulson, also is a former Goldman Sachs chairman and commands much more respect on Wall Street than his two predecessors.

MORTGAGE CRISIS, SOARING OIL PRICES

On Main Street, many U.S. voters blame Bush for the current economic woes linked to the mortgage crisis and soaring oil prices. Tapping into this anger, Obama portrays McCain's economic policies as much the same as Bush's.

Obama, who defeated former first lady Hillary Clinton in the Democratic nominating race, is not running as Bill Clinton's heir on the economy. But he has sent signals lately he is eager for advice from the former president's economic braintrust.

Furman was an aide in the Clinton White House and is a close associate of Rubin through their work together on the Hamilton Project, a centrist research organization that promotes policies like free trade and fiscal discipline.

Furman emphasized that Obama takes advice from a broad range of economic experts including Rubin; Jared Bernstein, an economist with the liberal-leaning Economic Policy Institute; Robert Reich, a former Clinton labor secretary, and former Federal Reserve Chairman Paul Volcker.

"One of the important lessons he's drawn from Bob Rubin is the importance of fiscal discipline," Furman said, adding that Obama agrees with a key pillar of "Rubinomics" -- the idea that lower deficits can help bring down long-term interest rates, which in turn is favorable to economic growth.

Like Rubin, Furman says, Obama also believes that high deficits are "an emblem of a dysfunctional government that is doing a bad job with its role in helping to manage the economy."

(Editing by Vicki Allen)

(For more about the U.S. political campaign, visit Reuters "Tales from the Trail: 2008" online at

blogs.reuters.com/trail08/

)

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