Obama plans to sit down with a dozen chief executives to hear their ideas about how the nation can avoid the tax increases and program cutbacks known as the fiscal cliff.
President Barack Obama appears unlikely to find broad backing in the business community for his effort to make upper-income Americans pay higher taxes.
But the president has little to lose when he continues his courtship of corporate leaders during a White House meeting Wednesday.
Although major business groups remain allied with Republicans and firmly opposed to tax rate increases sought by the president, the administration can hope to pick up support from a few individual executives for what Obama calls a “balanced approach” to reducing the budget deficit and heading off the sweeping tax increases and automatic spending cuts scheduled to begin Jan. 1.
Obama plans to sit down with a dozen chief executives to hear their ideas about how the nation can avoid the tax increases and program cutbacks known as the fiscal cliff. The session is not likely to yield any concrete agreement or explicit endorsement of the White House’s plan to allow tax rates to increase for couples making at least $250,000 a year.
Obama held a similar meeting Tuesday with leaders of labor unions and liberal advocacy groups. On Friday, the president will have his first sit-down with congressional leaders to begin negotiations on preventing expiration of all of the George W. Bush administration tax cuts and implementation of the across-the-board spending cuts mandated by last summer’s debt ceiling law.
Any crack in business opposition to Obama’s tax plan could help the White House considerably. “It’s very wise. It’s a good move to try to be as inclusive as possible, to try to create a dialogue,” said Ron Bonjean, a GOP strategist who served as a top aide to former House Speaker Dennis J. Hastert and former Senate Majority Leader Trent Lott. He added that after a rocky relationship over the past four years, “The president has a real opportunity to create a fresh start with the business community.”
If Obama is fortunate, influential business leaders he has worked with in the past, including Ford Motor Co. CEO Alan Mulally and General Electric Co.’s Jeffrey R. Immelt, will give him some cover on the tax issue.
Business associations, however, strongly oppose the president’s push to raise tax rates and are far closer to the position of congressional Republicans. The U.S. Chamber of Commerce, Business Roundtable and National Association of Manufacturers are urging Congress to continue current tax policy well past the new year and then turn to overhauling the tax code and entitlement programs to stabilize the growing national debt.
“First, stop sequestration and extend all of the current tax rates and other expiring tax incentives,” Thomas J. Donohue, president and chief executive of the chamber, said in prepared remarks to reporters Tuesday. “Do it for a reasonable period of time to let the recovery pick up some stream — and to give lawmakers the time they need to negotiate a ‘big deal’ to control the debt and put our economy on a path to robust growth.”
Asked about the president’s meeting with business leaders, Donohue said the chamber had not been contacted by the White House, adding, “We’ll see how the meeting goes.”
Dorothy Coleman, NAM’s vice president of tax and domestic economic policy, said she is “guardedly optimistic” that an agreement can be reached during Congress’ post-election session. But she said members of her group are adamant in their opposition to restoration of the 39.6 percent top marginal tax rate that was in place during Democratic President Bill Clinton’s administration.
“I think there’s a deal — I think if both sides are willing — that doesn’t involve increasing rates. We feel very strongly that you need to continue the lower rates for all individuals,” Coleman said.
Leaders in the business lobby have made clear they intend to make their presence and their views on tax issues well known during the next few weeks.
The Business Roundtable launched a campaign Tuesday called “It’s Time to Act” with a series of videos and print, radio and online advertisements featuring chief executives urging an extension of current tax policy before Jan. 1, followed by efforts to reduce the deficit in 2013. At least two executives featured in ads, Ursula Burns of Xerox and David Cote of Honeywell, will meet with Obama on Wednesday.
Cote has also signed on to “Fix the Debt,” a $30 million campaign by the Committee for a Responsible Federal Budget and endorsed by 80 CEOs. That effort seeks a major deficit reduction agreement next year that would lower tax rates but raise revenue by limiting deductions and tax credits.
Speaker John A. Boehner, R-Ohio, signaled last week that Republicans may accept raising additional revenue through limiting deductions and overhauling the tax code.
Having just won re-election and with tax rates set to increase across the board at year’s end unless new legislation is enacted, Obama at the moment has unique leverage with which to negotiate. That’s likely one reason opponents of a rate increase are pushing to extend the debate and the current tax rates into next year. They calculate that any mandate Obama now enjoys for his fiscal policy will fade with time.
“The commitments to bipartisanship, that quickly erodes after a congressional session begins and the real legislating happens,” Bonjean said. “I think you’re going to see the tone begin to change over time.”
Although Obama has been condemned as “anti-business” for his health care and financial regulatory overhauls, business groups have sometimes found the White House to be more of an ally than the tea-party-backed Republicans in Congress. For months, House Republicans balked at reauthorizing the Export-Import Bank, a top priority of the business community and the administration, but which some GOP lawmakers called corporate welfare.
Many business leaders were also appalled by last summer’s brinkmanship over the debt ceiling, although they largely refrained from criticizing congressional Republicans.
A senior financial industry lobbyist suggested that this year’s fiscal confrontation might play out in a similar way — and that despite the fiscal cliff’s threat to the economy, business groups are unlikely to lean heavily on GOP lawmakers to accede to Obama.
“It’d be a tough position to put ourselves in,” the lobbyist said. “They’ve been helpful.”