Washington

Obama and the CEOs: Making Up Isn't Hard to Do


President Obama reached out to chief executives and middle-income taxpayers, imploring them to press Congress to avoid the fiscal cliff

Photograph by Andrew Harrer/Bloomberg

President Obama reached out to chief executives and middle-income taxpayers, imploring them to press Congress to avoid the fiscal cliff

Ever since President Obama won reelection, a parade of corporate leaders has come through the White House.

Last week the president played host to a dozen chief executives, including Yahoo’s (YHOO) Marissa Mayer, American Express (AXP) CEO Kenneth Chenault, and Brian Roberts of Comcast (CMCSA). On Wednesday, Obama trekked to the Washington offices of the Business Roundtable to talk with Boeing (BA) CEO Jim McNerney and other executives.

At these meetings, Obama has appealed to the CEOs to accept his proposal for higher taxes. He has told Republicans that there will be no fiscal cliff negotiations unless that condition is met.

Considering the doomsday predictions around the fiscal cliff, the CEOs have emerged from these meetings in an oddly cheery mood. After the White House meeting, Deloitte CEO Joe Echevarria told the Washington Post that he was “extraordinarily optimistic” about the prospect of a deal. FedEx (FDX) CEO Frederick Smith, a Romney supporter, said that the idea that raising taxes on the wealthy would kill jobs was “a lot of mythology.” Goldman Sachs (GS) CEO Lloyd Blankfein called the White House’s fiscal cliff proposal “very credible.”

Whatever happened to class warfare? Before the election, the relationship between Obama and corporate leaders had soured so dramatically that billionaire investor Leon Cooperman was writing open letters to the media charging the president with waging war on the wealthy, JPMorgan head Jamie Dimon, a Democrat, was telling NBC News how much Obama’s “attacks” had disturbed him, and the White House seemed to have snubbed even some of its most ardent financial backers.

This time around, everyone is playing a different game. For the Obama administration, these listening sessions with corporate titans are an attempt to reset the tone for the next four years. They’re also starting to drive a wedge within the Republican Party. The more that wealthy public figures step forward to say they don’t mind paying more in taxes, the harder it is for Republicans to defend that stance. In Obama’s first term, Republicans understood the power of being in lockstep on such issues as the debt ceiling and Obamacare. Now it is Obama who has boxed the other party into a corner.

The CEOs, of course, also have self-interest at heart. They’ve accepted the White House invitations as part of a crusade to lower corporate tax rates and to steer the upcoming discussion of tax reform in a direction that favors their interests. Some of the corporate leaders, such as the Campaign to Fix the Debt, the group of high-powered CEOs that includes Blankfein and Dimon, have advocated for a “territorial tax system” that would exempt their offshore profits from taxation.

Right now, it’s the corporate executives showing goodwill. One big question that remains unanswered: What will Obama give them in return?

Dwoskin is a staff writer for Bloomberg Businessweek in Washington. Follow her on Twitter: @lizzadwoskin.

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