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Business chieftains back Obama approach
CEOs caution: Spending cuts must accompany tax increases
At least some business leaders are coming on board with President Obama’s push to increase taxes on top income earners — as long as that plan also includes cuts to entitlement spending.
Several top business executives emerged from a meeting with Mr. Obama on Wednesday evening speaking positive about the president’s commitment to what he calls a balanced approach to deficit reduction and accepting that it would include raising taxes on wealthier Americans.
“The optimism was much better coming out of the room for many … than going into the room,” said Joe Echeverria, the CEO of Deloitte LLP, an Obama supporter who noted that he was optimistic going into the meeting.
Marriott CEO Arne Sorenson, who donated to Mitt Romney during the presidential election, said the president and his team were “resoundingly reasonable” in making their pitch for support for their plan to avert the “fiscal cliff” of spending cuts and tax increases scheduled for the start of the New Year.
“Obviously they came into the meeting wanting to communicate that revenue increases are a significant part of a deal but not the only part of a deal,” Mr. Sorenson told reporters after the meeting.
“They were also committed to entitlement reform and spending … without speaking for everyone in the room, there was a broad sense that those [words] were reassuring because they sounded like a practical, balanced deal that could and should be done,” he continued.
The president invited 15 business executives to the White House as part of his plan to convince the public to his form of debt-reduction, including some of his big-money donors, as well as several of whom backed Mr. Romney’s presidential bid.
Along with Mr. Sorenson, the guest list included State Farm CEO Ed Rust, Caterpillar CEO Douglas Oberhelman, and AT&T CEO Randall Stephenson — all of whom donated to Mr. Romney and Republicans this election cycle.
The list also featured some political allies, including Comcast CEO Brian Roberts, Marissa Mayer, CEO of Yahoo!, and Patricia Woertz, CEO of Archer Daniels Midland, all of whom gave $20,000 or more to the Democratic National Committee for Mr. Obama’s re-election.
The White House is hoping it can convince members of the business community to lean on enough Republicans to agree to a debt-reduction deal that includes raising taxes on high earners.
“The president was optimistic but realistic — recognizing what an opportunity this is to find a solution that would be balanced and probably unleash a lot of investment and spending for next year,” said Mr. Roberts.
So far, House Speaker John A. Boehner, Ohio Republican, has shown no new flexibility on raising tax rates even after one of his more respected colleagues — Rep. Tom Cole of Oklahoma — suggested the party should allow tax increases on the top 2 percent as a way to avoid losing the Bush-era tax cuts for everyone.
“I told Tom earlier in our conference meeting that I disagreed with him,” Mr. Boehner told reporters Wednesday. “He’s a wonderful friend of mine and a great supporter of mine, but raising taxes on the so-called top 2 percent — half of those taxpayers are small-business owners that pay their taxes through their personal income tax filing every year. The goal here is to grow the economy and control spending. You’re not going to grow the economy if you raise tax rates on the top two [percent]. It’ll hurt small businesses; it’ll hurt our economy.”
It’s still early in the negotiating process and Mr. Obama is trying to convince as many business leaders on his side to help convince Republicans that raising the taxes won’t damage the economy.
Mr. Sorenson acknowledged that the president wasn’t shy about asking for the business community’s support on the tax increase, saying “there was a bit of an ask” of the leaders convened at the meeting.
“They would like the voice of business to be helpful in this and that probably, particularly to be willing to say that we recognize that revenue increases, meaning tax increases, are part of that,” he said.
“I think generally people have the view that if it’s balanced, if there are revenue increases, that’s fine but don’t only talk about revenue increases,” he added.
Mr. Echeverria also said he got the sense from the meeting that business leaders are now considering tax increases on those making more than $250,000 as a fait accompli.
“I think everybody took it as supportive as part of a bigger solution — that this by itself isn’t the solution, but as part of a broader solution. Time to move on.”
In an interview with CNN’s Wolf Blitzer after the meeting, Goldman Sachs CEO Lloyd Blankfein seemed to concur, although a bit more tentatively.
“I think if that’s what it took to make the math work, when you look at what — when you look at the entitlement side and when you look at the revenue side, I wouldn’t — I wouldn’t preclude that,” he said of Mr. Obama’s tax increase proposal. “Of course, we would have to do that at the numbers — if the numbers drive that way.”
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About the Author
Susan Crabtree is an award-winning investigative reporter with more than 15 years of reporting experience in Washington, D.C. Her reporting about bribery, corruption and conflict-of-interest issues on Capitol Hill has led to several FBI and ethics investigations, as well as consequences for members within their caucuses and at the ballot box. Susan can be reached at email@example.com.
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