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W.H. makes ‘enemies’ of Bush allies

- The Washington Times - Thursday, October 22, 2009

The Obama White House has deliberately placed favored Washington institutions of the Bush years in its crosshairs, a sign of an escalating battle between the Democratic administration and some of the city's pre-eminent power players.

In recent days, the administration has attacked the U.S. Chamber of Commerce and the insurance industry for opposing key administration objectives, has criticized the nation's largest banks and financial firms for outsized executive pay, and has tried to delegitimize the Fox News Channel by mocking its objectivity.

"When you're on their side, it's all OK, but if you're not, they rain hell down on you," said R. Bruce Josten, executive vice president of the U.S. Chamber of Commerce, bemoaning the administration's bellicose response to differing opinions on health care and financial regulatory reform proposals.

But Dan Pfeiffer, President Obama's deputy communications director, said the Democratic White House is not abiding by the rules that defined the nation's capital when a Republican president was in office.

"The insurers, the chamber and other special interests had the run of this town for the last eight years. That's not true anymore," Mr. Pfeiffer said. "And they are reacting to the new reality."

Yet the administration's targets are offended by what they consider misleading vitriol. They also say the tactics are dated and dangerous to serious discourse.

A senior Republican lawmaker on Wednesday raised concern that the White House was creating an "enemies list" in much the same way that the Nixon White House did.

"If the president and his top aides treat people with different views as enemies instead of listening to what they have to say, they're likely to end up with a narrow view and a feeling that the whole world is out to get them," said Sen. Lamar Alexander, Tennessee Republican.

In comments on the Senate Floor, Mr. Alexander said he has "an uneasy feeling, only 10 months into this new administration, that we're beginning to see symptoms of this same kind of animus developing in the Obama administration" as those that animated the Nixon White House - where Mr. Alexander himself served as a young aide.

The Obama White House used Mr. Alexander's words to portray Republicans as obstructionist, a charge they have aimed at the GOP repeatedly.

"While some Republicans on Capitol Hill seem to be formulating lists of people and policies to oppose, this president is focused on tackling the list of critical priorities that Washington has ignored for too long," said White House spokesman Reid Cherlin.

The reaction from the White House's adversaries - some of whom began the year attempting to forge a working relationship with the administration - has varied.

While Fox News has viewed the attacks on it as a ratings bonanza, many financial-sector officials are reluctant to openly criticize the administration's handling of their industry, preferring to do their heavy lobbying outside the purview of the media.

"The administration is playing hardball," a former Wall Street lobbyist said. "No one wants to be the one that puts their head up to get it knocked off by the White House. Just ask the Chamber of Commerce or the health insurance industry how well that strategy worked for them."

But privately, banks, credit card companies and other financial-sector entities have expressed mounting frustration at what they say are unfair shots by the White House - accusing the president of exaggerating Wall Street's failings for political gain.

"The administration has clearly decided it's good politics to beat up the financial services industry, alleging that we're anti-reform and anti-consumer," said a financial services lobbyist, commenting on background because of the sensitive nature of the issue. "In fact, the industry has long advocated for reform."

The lobbyist argued that discrediting Wall Street is "self-defeating" because it is "delaying the repair of trust in an industry essential to economic recovery, growth and job creation."

Mr. Obama in recent months has pushed an aggressive legislative agenda aimed at overhauling the federal financial regulatory system - against the will of Wall Street.

The president last month traveled to the heart of the U.S. financial sector - New York - to deliver a tempered scolding to corporate executives, arguing they have a moral obligation to support greater oversight and restrictions on certain business practices given the nation's recent economic turmoil.

"It is neither right nor responsible after you've recovered with the help of your government to shirk your obligation to the goal of wider recovery," said Mr. Obama while speaking to financial services executives at historic Federal Hall in Lower Manhattan.

The White House has clashed with the U.S. Chamber of Commerce, long the nation's premier business organization, over its plans for a consumer financial protection agency. The chamber says it could extend the federal government's reach deep into the everyday practices of businesses large and small.

The chamber, which was an early supporter of Mr. Obama's health care reform plans, views Mr. Obama as having betrayed his promise to reach out to those who think differently, in an honest attempt to reach compromises.

"The administration 'invites' folks to sit at their table, and then eviscerates them if they simply disagree with the conclusion at the end of the dialogue," Mr. Josten said.

The health insurance industry has been more circumspect in the face of White House attacks.

America's Health Insurance Programs (AHIP) came out against the health care proposal on the Hill when it released a report this month saying premiums would rise under the most bipartisan bill in the Senate Finance Committee.

Mr. Obama, in his weekly national address on Saturday, lambasted the insurance industry for "breaking open their massive war chest - to marshal their forces for one last fight to save the status quo."

"I will not abide those who would bend the truth - or break it - to score political points and stop our progress as a country," Mr. Obama said, raising the prospect of stripping the insurance companies of their exemptions from antitrust laws.

On Wednesday, the House Judiciary Committee voted to remove antitrust exemptions that protect the industry from federal regulation.

But AHIP spokesman Robert Zirkelbach adopted a neutral tone when asked about the administration's offensive.

"Our focus is on advancing comprehensive, bipartisan health care reform that covers every American and makes health care coverage more affordable," Mr. Zirkelbach said. "The American people deserve an open and honest discussion about how these proposals will impact the affordability of health care coverage."

Top Obama officials also sounded off over the weekend over excessive executive bonuses for companies that received federal bailout money. Swift action from the White House followed Wednesday, as the administration told reporters that it would be forcing the top seven recipients of bailout dollars to dramatically slash pay for their top executives.

But for Fox, a driving force behind stories that have hurt the White House politically, including the exposure of ACORN in a prostitution "sting," the criticism allows it to claim that it is the only network not shilling for the administration.

"It's probably been PR and marketing we couldn't have bought," said Chase Carey, deputy chairman, president and chief operating officer of News Corp., which owns Fox News.

White House Chief of Staff Rahm Emanuel and presidential adviser David Axelrod said on Sunday that Fox is "not a news organization," and pressured other TV networks and news outlets not to follow Fox's reporting.

"It's not really news; it's pushing a point view," Mr. Axelrod said on ABC's "This Week with George Stephanopolous." "And the bigger thing is that other news organizations, like yours, ought not to treat them that way, and we're not going to treat them that way."

• Sean Lengell and Jennifer Haberkorn contributed to this report.