A few days after President Obama appointed Wall Street critic Elizabeth Warren to a key oversight role in his administration, he countered accusations that he's an enemy of big business. While citing a long list of aid he's given to businesses, he also offered some new ammunition to those who portray him as a nemesis of Wall Street.
“I think that if you look at what we’ve done over the last two years, it’s very hard to find evidence of anything that we’ve done that is designed to squash business as opposed to promote business,” he told a town hall-style meeting yesterday at Washington's Newseum.
During the hour-long program hosted by CNBC’s John Harwood, Obama rattled off a string of tax cuts that he said reduced capital gains taxes and made it easier for small businesses to invest. His new health care law gives a tax break to some employers who provide health care, and another new law provides tax credits for hiring new workers.
you’re whacking us with a stick, but we certainly
feel like we’ve been whacked with a stick.”
He also specifically defended the federal bailout of the auto industry. “We didn’t do that because we were anti-business. We were doing it because we wanted to make sure that these businesses would continue,” he said. “And by the way, some of the same folks who complained were some of the same folks who, if we hadn’t taken some of those actions on Wall Street, would have lost everything they had. And they didn’t mind us intervening when it was helping them. But they did mind it when we were helping some other folks.”
Some in the crowd, like hedge fund manager Anthony Scaramucci, were not convinced, especially given Obama's successful push for financial regulatory reform and his choice on Friday of Warren to set up the new Consumer Financial Protection Bureau. Warren had been chairwoman of the Congressional Oversight Panel investigating the financial meltdown. “I represent the Wall Street community,” Scaramucci told the president. “We have felt like a piñata. Maybe you don’t feel like you’re whacking us with a stick, but we certainly feel like we’ve been whacked with a stick.”
Some of Obama's cuts and regulations have not yet been proven successes or failures, but Scaramucci's attitude indicates that Obama has a way to go to convince Wall Street that he's a pro-business president. Sen. Bob Corker, R-Tenn., told CNBC before the president spoke that Obama will have to do more after the elections to repair relations with the business community. “The question will be: Does he have that ability to bridge the gap?” Corker said. “I know that there are numbers of us that certainly would like to see longer-term, stronger policies put in place as it relates to our economy.”
where 8 million people lost their jobs and small businesses can’t
get loans, then I think that you shouldn’t be feeling put upon.”
Obama acknowledged he had a perception problem, worsened by a polarized political climate. “We’ve got to get back to working together. And this is part of my job as leader. It’s not just a matter of implementing good policies, but also setting a better tone so that everybody feels like we can start cooperating again, instead of going at loggerheads all the time. And I’m going to have to do more additional outreach to the business community on that front.”
But he took a populist tone in responding to Scaramucci and gently dismissed the idea that hedge funds are hurting. “There’s a big chunk of the country that thinks that I have been too soft on Wall Street,” he said to applause. “If you’re making a billion a year, after a very bad financial crisis where 8 million people lost their jobs and small businesses can’t get loans, then I think that you shouldn’t be feeling put upon. The question should be, how can we work with you to continue to grow the economy.”
Obama also put some fiscal muscle behind his tax-cut argument. In light of the deficit and rising entitlement costs, Obama said the country can't afford to extend tax breaks to the wealthiest taxpayers.
“I can't give tax cuts to the top 2 percent of Americans, 86 percent of that money going to people making a million dollars or more, and lower the deficit at the same time,” Obama told the cross section of Americans in attendance. “I don't have the math.”
He alluded to tax cuts down the line, but not until the country’s finances are in better shape. “And let's get the economy moving faster; let's get it growing faster,” Obama said. “At some point in the future, if we want to have discussions about further lowering tax rates, let's do so at a time when we can actually afford it.”
is to identify specifically what would you do. It's
not enough just to say, 'Get control of spending.'”
In continuing to defend his tax plan, even as a growing number of Democrats are backing a full extension of the cuts, Obama signaled that this is a point on which he won't give easily. He's stuck to the position that tax breaks enacted under President George W. Bush that expire at year's end ought to be extended only to lower- and middle-class Americans, not the wealthy. Obama said those cuts for the wealthy would add $700 billion to the deficit in the coming decade, though he said he'd be open to a payroll tax holiday or other plans that could even reduce the corporate tax burden.
Republicans have just as fiercely defended extending all the breaks, saying it makes no sense to raise any taxes during economic down times. Unless Congress acts, the breaks expire at the end of the year. But Democratic leaders have indicated they don't intend to debate and vote until a lame-duck session after the midterm elections. Corker predicted that Obama would not get his way and that the cuts would be extended for two years.
Obama also said he understood the anger of some people at the state of the economy. But he said Tea Party supporters are “misidentifying who the culprits are here.”
“And so the challenge, I think, for the Tea Party movement is to identify specifically what would you do,” Obama said. “It's not enough just to say, 'Get control of spending.' I think it's important for you to say, you know, I'm willing to cut veterans' benefits, or I'm willing to cut Medicare or Social Security benefits, or I'm willing to see these taxes go up.”
Obama said the choices would be hard. “What you can't do, which is what I've been hearing a lot from the other side, is saying, we're going to control government spending, we're going to propose $4 trillion of additional tax cuts, and that magically somehow things are going to work.”