November 15, 2024

Chamber Competes to Be Heard in Fiscal Debate

But Mr. Obama’s top advisers were not budging. There would be no deal on the federal budget deficit, they told chamber executives, without higher taxes, participants said. If there were doubts about the White House’s resolve, Mr. Obama met the chamber’s chief executive afterward for an unscheduled Oval Office chat about the showdown.

For the United States Chamber of Commerce, long the leading business voice in Washington, this month’s negotiations over the nation’s debt will be a key test of whether it can retain its influence and swagger in the capital even after a string of bruising political losses.

Many business leaders are looking to the chamber as a bulwark against the White House’s push for higher taxes, but it is unclear if the century-old association has the clout it once did. Other business groups seen as more open to tax increases have become players in the negotiations, exposing rifts in the private sector.

The Chamber of Commerce, in the biggest voter mobilization effort in its history, spent tens of millions of dollars in support of pro-business candidates, usually Republicans, in the Nov. 6 elections. But the results were disastrous: out of 48 House and Senate candidates that it spent money to try to either elect or defeat, the outcome went the chamber’s way only seven times, according to data from the Center for Responsive Politics, a Washington research group that tracks political spending.

If the chamber was an 800-pound gorilla before the elections, “now they’re a wounded 500-pound gorilla,” said Cyrus Mehri, a Washington lawyer for U.S. Chamber Watch, a union-backed group that is critical of the chamber’s political practices.

“But they’re still a major force to be reckoned with,” he added.

As the White House looks to work out a deal with Congress to avert hundreds of billions of dollars in automatic budget cuts at the end of the year, Mr. Obama and his top economic advisers have been meeting through the week with business leaders to push their plan for raising taxes on the wealthiest Americans.

Mr. Obama met Wednesday with chief executives from Goldman Sachs, Coca-Cola, Yahoo and other prominent firms, and he met a day earlier with small-business representatives.

The president’s advisers also met with officials from the Campaign to Fix the Debt, a centrist group that has become influential in pushing for a combination of tax increases and spending cuts. It is led by Erskine B. Bowles, a former Clinton administration official, and Alan K. Simpson, a former Republican senator from Wyoming.

When Mr. Obama met two weeks ago with a dozen corporate leaders but did not invite the Chamber of Commerce, it was widely seen as a snub of the group over its political attacks during the presidential campaign. But the chamber got its turn Monday.

Jack Lew, the White House chief of staff, and other senior economic advisers listened as chamber executives, including Thomas J. Donohue, the group’s president, and Bruce Josten, its top lobbyist, laid out their ideas for raising significant revenue without necessarily raising taxes by expanding energy development.

“They wrote it down, but where that goes, I don’t know,” Mr. Josten said in an interview.

But Mr. Josten said that the White House advisers stressed that any debt deal would have to include increased taxes at the highest brackets and that if an agreement could not be reached, they were willing to risk the automatic spending cuts — the so-called fiscal cliff option — at the end of the year.

“They reiterated that they want the higher rates, and they’ll go over the cliff if they need to,” Mr. Josten said.

Article source: http://www.nytimes.com/2012/11/30/business/chamber-competes-to-be-heard-in-fiscal-debate.html?partner=rss&emc=rss

DealBook: On Wall Street, Time to Mend Fences With Obama

Daniel Loeb, left, of Third Point, and Steven A. Cohen of SAC Capital Advisors.Phil McCarten/Reuters and Steve Marcus/ReutersDaniel Loeb, left, of Third Point, and Steven A. Cohen of SAC Capital Advisors.

Del Frisco’s, an expensive steakhouse with floor-to-ceiling windows overlooking the Boston harbor, was a festive scene on Tuesday evening. The hedge fund billionaires Steven A. Cohen, Paul Singer and Daniel Loeb were among the titans of finance there dining among the gray velvet banquettes before heading several blocks away to what they hoped would be a victory party for their presidential candidate, Mitt Romney.

The next morning was a cold, sobering one for these executives.

Few industries have made such a one-sided bet as Wall Street did in opposing President Obama and supporting his Republican rival. The top five sources of contributions to Mr. Romney, a former top private equity executive, were big banks like Goldman Sachs and JPMorgan Chase, according to the Center for Responsive Politics. Wealthy financiers — led by hedge fund investors — were the biggest group of givers to the main “super PAC” backing Mr. Romney, providing almost $33 million, and gave generously to outside groups in races around the country.

On Wednesday, Mr. Loeb, who had supported Mr. Obama in 2008, was sanguine. “You win some, you lose some,” he said in an interview. “We can all disagree. I have friends and we have spirited discussions. Sure, I am not getting invited to the White House anytime soon, but as citizens of the country we are all friendly.”

Wall Street, however, now has to come to terms with an administration it has vilified. What Washington does next will be critically important for the industry, as regulatory agencies work to put their final stamp on financial regulations and as tax increases and spending cuts are set to take effect in the new year unless a deal to avert them is reached. To not have a friend in the White House at this time is one thing, but to have an enemy is quite another.

“Wall Street is now going to have to figure out how to make this relationship work,” said Glenn Schorr, an analyst who follows the big banks for the investment bank Nomura. “It’s not impossible, but it’s not the starting point they had hoped for.”

Traditionally, the financial industry has tended to support Republican candidates, but, being pragmatic about power, has also donated to Democrats. That script got a rewrite in 2008, when many on Wall Street supported Mr. Obama as an intelligent leader for a country reeling from the financial crisis. Goldman employees were the leading source of campaign donations for Mr. Obama, who reaped far more contributions — roughly $16 million — from Wall Street than did his opponent, John McCain.

The love affair between Wall Street and Mr. Obama soured soon after he took office and championed an overhaul in financial regulations that became the Dodd-Frank Act.

Some financial executives complained that in meetings with the president, they found him disinterested and disengaged, while others on Wall Street never forgave Mr. Obama for calling them “fat cats.”

The disillusionment with the president spawned reams of critical commentary from Wall Street executives.

“So long as our leaders tell us that we must trust them to regulate and redistribute our way back to prosperity, we will not break out of this economic quagmire,” Mr. Loeb wrote in one letter to his investors.

The rhetoric at times became extreme, like the time Steven A. Schwarzman, co-founder of the private equity firm Blackstone Group, compared a tax proposal to “when Hitler invaded Poland in 1939.” (Mr. Schwarzman later apologized for the remark.)

Mr. Loeb was not alone in switching allegiances in the recent presidential race. Hedge fund executives like Leon Cooperman who had supported Mr. Obama in 2008 were big backers of Mr. Romney in 2012. And Wall Street chieftains like Jamie Dimon of JPMorgan Chase and Lloyd C. Blankfein of Goldman Sachs, who have publicly been Democrats in the past, kept a low profile during this election. But their firms’ employees gave money to Mr. Romney in waves.

Starting over with the Obama White House will not be easy. One senior Wall Street lawyer who spoke on condition of anonymity said Wall Street “made a bad mistake” in pushing so hard for Mr. Romney. “They are going to pay a price,” he said. “It will soften over time, but there will be a price.”

Mr. Obama is not without supporters on Wall Street. Prominent executives like Hamilton James of Blackstone, and Robert Wolf, a former top banker at UBS, were in Chicago on Tuesday night, celebrating with the president.

“What we learned is the people on Wall Street have one vote just like everyone else,” Mr. Wolf said. Still, while the support Wall Street gave Mr. Romney is undeniable, Mr. Wolf said, “Mr. Obama wants a healthy private sector, and that includes Wall Street.

“If you look at fiscal reform, infrastructure, immigration and education, they are all bipartisan issues and are more aligned than some people make it seem.”

Reshma Saujani, a former hedge fund lawyer who was among Mr. Obama’s top bundlers this year and is planning to run for city office next year, agreed.

“Most people in the financial services sector are social liberals who support gay marriage and believe in a woman’s right to choose, so I think many of them will swing back to Democrats in the future,” he said.

Article source: http://dealbook.nytimes.com/2012/11/07/on-wall-street-time-to-mend-fences-with-obama/?partner=rss&emc=rss