Obama Appeals to Business for Support on Tax Plan

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WASHINGTON -- After a campaign that drove a deep wedge between them, President Obama is now trying to rebuild relations with the business community in hopes of enlisting it in his showdown with Republicans in Congress over the looming fiscal crisis.

Through phone calls, White House invitations and old-fashioned political flattery, Mr. Obama has dispensed with some of the populist language of the campaign trail to appeal to corporate America's palpable desire for certainty. In groups and one by one, the president is making a case to business leaders that siding with him will put the nation back on a firm fiscal footing and unleash the economy.

"What's holding us back right now, ironically, is a lot of stuff that's going on in this town," Mr. Obama told the Business Roundtable, a group of corporate leaders, on Wednesday. "And I know that many of you have come down here to try to see, is there a way that we can break through the logjam and go ahead and get things done? And I'm here to tell you that nobody wants to get this done more than me."

White House officials have been encouraged by what they describe as a more positive reaction than expected. Many chief executives who met with Mr. Obama privately at the White House last week told him they would go along with his proposal to raise taxes on the wealthy. And several have come out publicly for the plan as long as there is also an effort to tame the growth of entitlement spending.

Frederick W. Smith, the chief executive of FedEx and a supporter of Mitt Romney's, said it was "a lot of mythology" that "you'll kill jobs" by raising tax rates on the wealthy. Lloyd C. Blankfein, the chief executive of Goldman Sachs, called Mr. Obama's deficit reduction plans "very credible" and said that he "wouldn't preclude" higher tax rates on higher income. Randall Stephenson, the chief executive of AT&T and another Romney supporter, called for "a compromise involving an increase in both tax rates" and "significant steps to reform entitlements and rein in federal spending."

The White House hopes such statements help crack Republican solidarity.

"There are a lot of people in there who support the Republican Congress, who were 'super PAC' donors to Mitt Romney, yet they want a solution here," David Plouffe, the president's senior adviser, said after the Business Roundtable visit. "A lot of them have special influence in the Republican Party, and if they're telling Republican leaders and members that they have to compromise, that's going to have a real effect."

  Still, plenty of business leaders oppose Mr. Obama's plans, and Republicans countered Wednesday by releasing comments from small-business owners saying that higher tax rates would stifle their firms. And even those who have signaled support for Mr. Obama's stance on taxes are also pressing Democrats to rein in spending.

During a closed question session after Mr. Obama's speech Wednesday, Kenneth I. Chenault, chief executive of American Express, emphasized that entitlement overhaul was necessary to address long-term deficits, along with tax increases and other spending cuts, according to a chief executive in the room.

Stephen A. Schwarzman, chief executive of the Blackstone Group, pointed out that while taxes were lower compared to the economy as a whole than they had been, spending was well above the historical norm. Robert A. McDonald, chief executive of Procter & Gamble, asked about a comprehensive corporate tax overhaul.

Some conservatives are as distrustful of corporate America as they are of big government.

"Large corporations are seekers of welfare as much as anybody," said Chris Chocola, president of the Club for Growth, an antitax group. "When he has all these guys to the White House, it's not surprising that they agree with the president. They helped create the current system, and they have a vested interest in a sense in making it worse."

Mr. Obama's argument to business leaders focuses on stability, saying that even if they oppose his plans, they should want the fiscal crisis resolved for the sake of the economy. He also is promising them that he will consider a broader overhaul of the tax code next year that could even lower corporate tax rates in exchange for eliminating special breaks.

During his speech to the Business Roundtable, Mr. Obama warned that Republicans might again use a vote on raising the debt ceiling as leverage in the fiscal fight, much like last year.

"That is a bad strategy for America, it's a bad strategy for your businesses and it is not a game that I will play," Mr. Obama said. "Everybody here is concerned about uncertainty. There's no uncertainty like the prospect that the United States of America, the largest economy that holds the world's reserve currency, potentially defaults on its debts."

The administration brought home the possibility that a painful series of automatic tax increases and spending cuts will go into effect with the new year if no agreement is reached. The White House Office of Management and Budget asked agencies this week for information about how they would institute the deep spending cuts if there were no deal.

Republicans called on Mr. Obama to dispense with the public campaign and begin serious negotiations. Speaker John A. Boehner did not give an inch Wednesday on his opposition to raising tax rates or insistence that any deficit-reduction plan emphasize spending cuts.

But he sounded exasperated as he insisted that he had moved toward the president's position by agreeing to $800 billion in higher tax revenue over 10 years by curtailing tax breaks. "The revenues we're putting on the table will come from guess who? The rich," he said, his voice rising. "There are ways to limit deductions, close loopholes and have the same people pay more of their money to the federal government without raising tax rates."

Republicans argued that Mr. Obama's plan was antibusiness, citing a study showing that it would cost 700,000 jobs. "Raising rates will hurt the very people that we're expecting to help create jobs in our country," Mr. Boehner said.

Mr. Obama's outreach to business leaders began shortly after an election in which he effectively ran against corporate America and corporate America poured hundreds of millions of dollars into defeating him.

The president has held two meetings with chief executives at the White House and a third with small-business owners and called others individually. He has stopped by meetings his aides have had with executives, and he gave his first television interview since his re-election to the business-oriented Bloomberg Television this week.

"We're making sure they understand where the president's coming from," Mr. Plouffe said, "and that we strongly believe it's in the economy's and country's interest to get a deal."

Jonathan Weisman contributed reporting from Washington, and Nelson D. Schwartz from New York.

nation

This article originally appeared in The New York Times.


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