WSJ: Business Leader Slams 'Hostile' Policies on Jobs
• JUNE 23, 2010
By ELIZABETH WILLIAMSON And DARRELL A. HUGHES
Verizon CEO Ivan Seidenberg, speaking Tuesday in Washington, urged the administration to 'stop trying to micromanage industries.'
WASHINGTON—Verizon Communications Inc. Chief Executive Ivan Seidenberg, current head of one of the nation's most influential business groups, slammed the Obama administration for decisions he said "create an increasingly hostile environment for investment and job creation."
In comments marking one of the sharpest breaks between top executives and the Obama White House, Mr. Seidenberg used a speech at Washington's Economic Club to unleash a list of policy grievances over taxes, trade and financial regulation.
Mr. Seidenberg's comments are particularly notable because he heads the Business Roundtable, a group encompassing the chief executives of the nation's largest listed companies whose members have enjoyed frequent access to the president and his top aides. Its leaders have advised the White House on topics from economic recovery to health care to clean energy.
List of Grievances
Some policies business groups say impede growth:
• Increased taxes on foreign earnings
• Stalled free-trade agreements
• Shareholder rights to nominate directors
• End to secret ballots in union elections
• Expanded damages for pay discrimination
• EPA regulation of greenhouse gases
• Restrictions on drilling
• Source: Business Roundtable, Business Council
Where the U.S. Chamber of Commerce, the other big business group in the capital, has been openly confrontational with the administration, the Roundtable has until now been reluctant to criticize its policies in public.
In his speech, Mr. Seidenberg praised the White House for soliciting advice from executives, saying afterward, "I've been invited to the White House for business purposes more times in the last year than in the previous 16."
But he urged the administration to "focus on the big goal," meaning job growth, "and stop trying to micromanage industries."
He characterized the U.S. corporate-tax structure as "a major impediment to international competitiveness," citing administration efforts to raise taxes on foreign earnings and slow movement on a proposed overhaul of the U.S. corporate tax code.
On trade, he said, "we need to make sure the U.S. isn't a fly-over zone when it comes to international trade and foreign investment," citing slow movement on ratifying agreements with Colombia, Panama and South Korea amid concerns by labor groups and others.
He said the Roundtable supported revamping financial-market regulation but that "the current proposals … go a step too far, imposing one-size-fits-all solutions on highly dynamic and diverse businesses." He cited in particular moves to tighten rules on derivatives trading and to give shareholders a greater say in choosing company directors.
White House spokeswoman Jennifer Psaki said businesses would be helped by the administration's policies, including its overhaul of the health-care system and promotion of clean energy. "The president has consistently pursued policies designed to create a better climate for American businesses in order to foster job creation, innovation and economic growth," she said.
Mr. Seidenberg's criticism reflects disappointment among the Roundtable's members with both the positions the administration has taken and the way the White House has dealt with business leaders' concerns.
Mr. Seidenberg said the administration and the nation's biggest businesses—Roundtable companies pay 60% of U.S. corporate taxes and employ 12 million people— should be working more closely on efforts to bring the nation out of recession. Even though Roundtable leaders are frequently invited to meetings with the president, many feel their advice on jobs and growth too often fails to translate into policy.
Instead, he complained that "by reaching into virtually every sector of economic life, government is injecting uncertainty into the marketplace and making it harder to raise capital and create new businesses."
The Roundtable and the White House clashed during the health-care debate over whether new rules would force companies to take big charges. Administration officials later expressed surprise when companies including Caterpillar Inc. and AT&T Inc. said they had to take write-downs to cover the costs.
Mr. Seidenberg said that at the request of the White House, business leaders have prepared a report detailing "hundreds of separate actions and decisions" that stifle manufacturing, innovation and job growth. The report was sent this week to outgoing White House budget director Peter Orszag, and was released by the group Tuesday.
The report was compiled in concert with the Business Council, an industry group chiefly comprising manufacturing companies.
The Council's chairman, Caterpillar Chief Executive James W. Owens, has been critical of the administration's health-care legislation, saying it has resulted in increased costs for businesses struggling to emerge from recession.
"I completely agree with what Ivan was saying about how the government needs to be removing itself from the private sector," said Roundtable member Dan DiMicco, chief executive of steelmaker Nucor Corp. "For a long time they worked through diplomacy, negotiation and compromise. But the crisis we're in today is of such magnitude that we have to have action in support of the private sector in a bold and out-front manner."
Write to Elizabeth Williamson at elizabeth.williamson@wsj.com and Darrell A. Hughes at darrell.hughes@dowjones.com
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