As the economic recovery stalls and the debt debate in Washington fuels market uncertainty, business leaders — many of whom were once close to the White House — are increasingly airing their fears that President Obama’s policies are stifling job creation.
Kimberly-Clark Corp. Chairman and CEO Thomas J. Falk told a Senate panel this week that the administration’s proposal to raise the tax on foreign earnings of American-based firms “would put U.S. companies at a significant disadvantage.”
The move “would slow economic growth in the U.S. and impede the creation of U.S.-based jobs,” Mr. Falk, whose global company makes Kleenex, Huggies and health care products, said Wednesday at a hearing of the Senate Finance Committee.
Leaders in the oil and gas industry say the administration could clear the way for the creation of thousands of domestic jobs if it weren’t beholden to environmentalists. As one example, they point to the proposed Keystone XL pipeline, a massive construction project that has been awaiting approval since Mr. Obama took office. The pipeline would run from Alberta, Canada, to Houston.
“If you’re looking for revenue and jobs, it’s on your desk, Mr. President,” said Jack Gerard, president and CEO of the American Petroleum Institute, in a recent interview with The Washington Times.
The House on Tuesday passed legislation requiring the Obama administration to reach a decision on the pipeline by Nov. 1. The White House issued a statement saying the House-imposed deadline is “unnecessary” and “could prevent the thorough consideration of complex issues.”
The State Department is working to complete a review of the project next month; the EPA has raised concerns about oil spill risks and greenhouse gases from the use of oil sands.
Leading business groups, including the U.S. Chamber of Commerce and the National Association of Manufacturers, are in full-scale revolt against policies coming out of the National Labor Relations Board, now dominated by Obama appointees, in particular a clash in which the agency has sided with labor unions in seeking to prevent aerospace giant Boeing from opening a massive new, non-union manufacturing plant in South Carolina.
Even the president’s attack on tax breaks for corporate jet owners has backfired. Unionized machinists, mayors in 10 cities and small business owners have rallied in opposition to Mr. Obama’s plan to target the industry.
“These entrepreneurs would get hit with higher taxes at a time when they need such resources to survive, grow their businesses and hire more employees,” said Karen Kerrigan, president and CEO of the Small Business and Entrepreneurship Council.
While the business community has traditionally leaned toward the Republicans, Mr. Obama was able to make significant inroads in his 2008 presidential race, besting GOP rival Sen. John McCain in contributions from such executives in such industries as finance, communications and real estate.
Business moguls who endorsed the Democrat included billionaire investors George Soros and Warren Buffett; Microsoft founder Bill Gates; and Eric Schmidt, chairman of Google.
The president has acknowledged getting off on the wrong foot with big business in the early days of his administration, and has taken steps to thaw that relationship.
He created a Jobs and Competitiveness Council headed by GE CEO Jeff Immelt and Ken Chenault, the head of American Express. He ordered a review aimed at cutting back on unnecessary regulations. And in January he hired William Daley, an executive at J.P. MorganChase and a former Commerce secretary, as his chief of staff.
Yet many top business leaders remain largely unmoved, judging from the unemployment rate that stands at 9.2 percent. Corporate leaders are sitting on about $2 trillion in capital, and gaming magnate Steve Wynn, a self-described “Democratic businessman,” told investors two weeks ago that business leaders will be “sitting on their thumbs” until Mr. Obama leaves office.
“This administration is the greatest wet blanket to business and progress and job-creation in my lifetime,” said Mr. Wynn, whose second-quarter earnings at Resorts were nevertheless up $300 million from the same period in 2010.
“And I could prove it and I could spend the next three hours giving you examples of all of us in this marketplace that are frightened to death about all the new regulations, our health care costs escalate, regulations coming from left and right, a president that seems — that keeps using that word ‘redistribution’ ” he said.
His comments mirror criticisms of the administration from 3M’s George Buckley, Boeing’s Jim McNerney, Intel’s Paul Otellini.
The White House press office didn’t respond to a request for comment about business leaders’ criticisms, but Mr. Immelt recently told business leaders at a gathering of the U.S. Chamber of Commerce that it’s time for them to step up to the plate and begin hiring again.
“The people who are part of the business sector, the people in this room, have got to stop complaining about government and get some action underway,” Mr. Immelt said. “There’s no excuse today for lack of leadership. The truth is we all need to be part of the solution.”
Mr. Immelt said he expects the administration to put forward proposals by the end of the year that should help to create up to 1 million jobs.
GE said this week it is moving the headquarters of its x-ray business from Wisconsin to Beijing, part of a move to invest $2 billion in China.
White House press secretary Jay Carney said the economy is “vastly improved” since Mr. Obama took office, but that view isn’t reflected in recent public opinion polls.
A Gallup poll released Tuesday showed 73 percent of Americans say the economy is getting worse, up a whopping 11 percentage points from the three-day period ending July 6.
The latest Quinnipiac University poll showed a “decisive majority” of 56 percent disapprove of the way the president is handling the economy. A Washington Post/ABC news poll found 57 percent of respondents disapprove of Mr. Obama’s performance on the economy. The percentage of African-Americans who think the president is doing a good job on the economy has dropped from 77 percent last year to slightly more than 50 percent today.
The Standard & Poors research arm has found that S&P 500 companies saw a nearly 20-percent increase in earnings growth in the first quarter of this year. Those companies have more than $1 trillion on their balance sheets but aren’t expanding much for reasons ranging from a lack of consumer demand to uncertainties regarding health care costs and new regulations.
Home Depot co-founder Bernie Marcus said the empire he started in 1978 “would never have succeeded” in today’s climate of costly government regulations.
The impediments that the government imposes are impossible to deal with,” Mr. Marcus said in an interview with Investors’ Business Daily. “I’m not sure Obama would understand anything that I’d say, because he’s never really worked a day outside the political or legal area. He doesn’t know how to make a payroll, he doesn’t understand the problems businesses face.”
Rosario Palmieri, vice president of regulatory policy at the National Association of Manufacturers (NAM), said the Obama administration has made “significant shifts” toward easing regulations.
“We have certainly seen some progress and enhanced sensitivity on rule-making,” Mr. Palmieri said. But he added that a “good test” will be whether the EPA moves forward next month with anticipated costlier rules on ozone standards, which NAM has estimated could cost 7.3 million jobs and trillions in extra regulatory expenses from 2020 to 2030.
The World Bank’s annual “Doing Business” survey, which ranks 183 countries on regulation, found that the U.S. slipped from third to fifth in 2010. Singapore ranked first, followed by Hong Kong, New Zealand and the United Kingdom. Among the reasons cited for the U.S. dropping in rank were the potential for huge new sets of regulations from Mr. Obama’s health care law and the Dodd-Frank overhaul of the financial system.
The U.S. ranked 62nd in its business tax environment, and 27th in dealing with construction permits.