Business Interests Train Fire on Budget

Posted March 17, 2009 at 6:42pm

Shocked at what they view as a huge expansion of government and a commensurate increase in the tax burden, major swaths of the business community are mobilizing to try to sink President Barack Obama’s budget, fearing it will damage their companies and throttle fledgling efforts to boost the struggling economy.

In a sharply worded letter sent Tuesday to all Members of Congress, a broad-based business alliance known as the Tax Relief Coalition stopped just short of calling Obama’s budget an embrace of socialism.

“Unfortunately, instead of focusing on the nation’s number one priority — the economy — the Administration has announced the most sweeping expansion of government in decades,— the letter states. “With the fiscal 2010 budget proposal, President Obama is attempting not merely to expand the role of the federal government, but to put it in a dominant position over the economy.—

The coalition, first formed almost exactly eight years ago to tout then-President George W. Bush’s tax cuts, is an alliance of more than 1,000 associations led by blue chip groups such as the National Association of Wholesaler-Distributors, the U.S. Chamber of Commerce, the National Federation of Independent Business and the National Association of Manufacturers.

Usually, presidential budgets include enough carrots to divide the business community as sectors try to curry favor to get their priorities passed.

But not this time.

“This is the first time in over 20 years that the business community has taken a strong and definite stance on a president’s budget proposal,— National Association of Wholesaler-Distributors President Dirk Van Dongen said. The NAW leads the Tax Relief Coalition. “It represents a huge new tax increase, and not just on the better off,— as well as “humongous spending commitments,— Van Dongen said. “It is clearly a very bold and sweeping proposal warranting an equal response.—

According to one source, TRC leaders will in the coming days contact 1.8 million workers who work for association member companies and ask them to demand that Congress resist the Obama budget.

The move by business to its “grass roots— could serve as a counterweight to promises by Democratic activists to pour money into backing the budget and the White House decision to seek support from its vast campaign e-mail list.

Meanwhile, business officials will crank up their lobbying campaigns to try to defeat the budget. Many are heartened that some of Obama’s Democratic allies are expressing concerns about the budget.

The Business Roundtable, which includes top Fortune 500 chief executive officers, declined to sign the letter, as did several high-tech organizations that are working closely with Obama on a number of priorities.

But Ralph Hellmann of the Information Technology Industry Council said the letter, which he did not sign, nevertheless serves as a warning that the business community is losing patience with Obama’s policies.

Despite vows by the Obama administration to increase transparency and outreach, TRC officials said they were blindsided by Obama’s budget.

“If there were discussions, business people didn’t hear about them or weren’t in them,— said one business source. “I don’t think we saw this coming, which is part of the reason for the strong reaction. We were like, Wow, this is a major policy shift.’—

Business officials said that as soon as they had digested the budget, they had little problem getting the coalition together behind a letter. Top officials met at NAW headquarters last week and agreed on principles that would guide the missive. The letter was then crafted, with Chamber of Commerce Executive Vice President for Government Affairs Bruce Josten — known for his grasp of policy detail — an animating force behind the language.

The letter itself lists a host of tax increases and reductions in business benefits the companies oppose. It argues that Obama has erred in not focusing on stimulating the economy and instead seeking to implement grand plans.

A senior Office of Management and Budget official said the budget is an effort to return to responsible budgeting and change policies that led to the current economic crisis.

He said the Obama administration reached out repeatedly to business officials, who have been invited to a variety of White House events with Obama. And he said the priorities in the budget will help reduce costs in the long run and put the country on a path to fiscal discipline.