By Jeff Mason - Analysis
WASHINGTON (Reuters) - President Barack Obama has made fighting unemployment his top priority in 2010 but businesses that are key to creating U.S. jobs are uncertain about his policies and annoyed, at times, by his rhetoric.
After presiding over a $787 billion economic stimulus package, bank bailouts and automaker rescues during his first year in office, the Democratic president rejects arguments that his administration is unfriendly to business.
Still, his tough words about Wall Street practices and sky-high bonuses caught many executives off guard.
Obama, while trying not to alienate business leaders whose support he needs to boost the economy, has sought to capitalize on voter anger over big bank profits.
Democrats want to claim the issue ahead of congressional elections in November, when Republicans are expected to gain seats in Congress.
Executives and industry associations say Obama’s record is mixed, citing a lack of clarity about healthcare reform and tax policies as well as the president’s populist-tinged comments as contributing factors to an uneasy relationship.
“Business is ambivalent about the Obama administration. I think the jury is still out,” said Cam Fine, head of the Independent Community Bankers of America, noting he had seen proposals favorable to his industry turned into legislation.
“You hear administration officials speak very favorably about business and wanting to spur business conditions and then at other times the rhetoric is very harsh. So I think it‘s, right now, kind of a guessing game.”
Obama’s reference to some Wall Street chief executives as “fat cats” was an example of an unfortunate choice of words, Fine said.
Valerie Jarrett, one of Obama’s top advisers and a White House liaison to the corporate world, said that comment and similar ones were not meant to refer to business as a whole.
“I think that some of the comments that were really directed at a very few were interpreted more broadly than they were intended,” she told Reuters, declining to single out companies or executives that had been referred to by Obama.
“We are very pro-business. We want to foster and create an environment here in the United States where companies want to invest and grow and create jobs but we also want to make sure that we have rules of the road in place so that the excesses of the past are controlled.”
Administration officials point to evidence that Obama’s polices, at least those not tied up in Congress, are working.
The U.S. economy resumed growing last year after four consecutive quarters of declines but unemployment is still near double digits and 8.4 million jobs have been lost since the start of the recession in December 2007.
But policies that have not been implemented are the ones business leaders cite as contributing to the uncertainty that makes it harder to plan and to create jobs.
Potential costs from healthcare legislation, aspects of financial regulatory reform and questions about Obama’s intentions on corporate tax rates were all of high concern.
“There’s been a lot of uncertainty around what direction we’re going to go with healthcare,” Jim Owens, chairman and chief executive of Caterpillar Inc, told a press conference ahead of a two-day meeting of the Business Council, a group of about 100 U.S. chief executives in Florida last week.
“If Congress and the administration can move forward together with more clarity around ... taxation and fiscal policy, I think that would be also helpful.”
Republicans are preparing for the November elections that could change the balance of power in Congress by arguing their policy ideas are more effective at getting business to thrive.
The surprise victory of a Republican in a Massachusetts election last month ended a Democratic supermajority in the Senate and brought Obama’s healthcare initiatives to a halt.
Jarrett said the administration had taken steps to address concerns about corporate taxes with its current budget.
“There are an aggregate of $70 billion of tax cuts for business, which translates into a 10 percent reduction in the corporate tax rate,” she said. “When we tell that to businesses, sometimes they’re surprised.”
Obama, who has hosted five lunches with top executives at the White House in the last year, is aware of the “uncertainty” argument and told reporters last week that lawmakers from both political parties had to address the issue.
“The sooner the business community has a sense that we’ve got our act together here in Washington and can move forward on big, serious issues in a substantive way without a lot of posturing and partisan wrangling, I think the better off the entire country is going to be,” he said.
Carol Browner, Obama’s top energy and climate policy adviser, said she met regularly with chief executives over an issue that some corporations also cite as a major fear: legislation that would put a limit on industrial greenhouse gas emissions.
“Business always likes predictability and certainty and lots of CEOs have said to us that once we have comprehensive energy reform, then we can go ahead and start making the capital investments that will create the domestic jobs,” Browner told Reuters Insider in an interview.
The White House has reached out to Republicans by pushing for greater investments in nuclear energy and by advancing a host of policies that are favorable to small businesses.
But with Obama’s tough rhetoric on Wall Street bonuses still stinging, some observers felt big corporations were treated differently by the administration than small ones.
“There were abuses on Wall Street and there was recklessness and probably some greed and certainly those issues need to be dealt with,” said Fine.
“But at the same time big businesses as well as small businesses need to be treated evenhandedly.”
Additional reporting by James Kelleher; Editing by Matthew Bigg and John O'Callaghan