The Price of Politics (8 page)

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tymied on the health care bill by the loss of their 60-vote Senate majority, the Democrats set out to exploit the Senate’s arcane reconciliation process, which allows certain budget-related bills to be brought to the floor for a vote without the possibility of a filibuster.

On March 21, the House held a series of votes that ended with the passage of a bill identical to the Senate’s original legislation, followed immediately by a reconciliation bill making the changes to it that the Democrats had negotiated among themselves. No Republicans voted for either bill.

It would take another four days for the House and Senate to finalize the changes in the reconciliation bill, but with the Senate version having finally passed both houses, Obama had something to sign.

At a ceremony in the East Room of the White House on March 23, the president signed the Patient Protection and Affordable Care Act into law.
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Vice President Biden introduced Obama, and before relinquishing the podium, leaned over to whisper something to him. The microphones caught his words and broadcast them live:

“This is a big fucking deal.”

• • •

“I know you guys are Republicans,” Obama told a small group of leading chief executive officers at a White House dinner in early 2010.

“How do you know that?” asked Ivan Seidenberg, the CEO of Verizon and currently the longest-serving CEO of a Fortune 500 company. He considered himself a progressive independent among executives and was surprised by the stereotype.

Seidenberg was also head of the Business Roundtable, the foremost CEO association in the country, whose member companies had $6 trillion in annual revenue and 13 million employees.

There are natural and inevitable tensions between the business community and a Democratic president. Both sides knew it, and it was to the benefit of both sides to find channels of communication and mutual interest. President Obama was an affable, sports-loving political hero who promised hope and change. The powerful CEOs of America were no longer isolated barons, but were themselves public figures, subject to polls, the media scorecard, and even personal star treatment when things went right or opprobrium when they didn’t.

Seidenberg worried that Obama did not appreciate the importance of business. Sure, he understood it intellectually, but did he really admire the guts and instincts that made corporations succeed, hire workers, and grow America?

• • •

The White House invited Seidenberg and two other CEOs to the president’s Super Bowl party on Sunday, February 7, 2010. Seidenberg felt courted. Neither Clinton nor Bush had invited him to the White House. There was a blizzard that day, which made travel unappealing, but there was no way he was going to snub the president. At the White House, Obama chatted with Seidenberg for about 15 seconds before the game. But then he went down to the front row to watch the game with his buddies. That was it. Fifteen seconds. Seidenberg felt he had been used as window dressing.

He complained to Valerie Jarrett, a close Obama aide and longtime family friend from Chicago, whose duties included managing relations with business executives and the White House. Her response: Hey, you’re in the room with him. You should be happy.

Seidenberg was not.

• • •

On May 4, 2010, Obama addressed the Business Council, another CEO group, at a meeting in Washington.
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He used a TelePrompTer and took no questions. Again, the CEOs were dissatisfied. It wasn’t communication—he was just going through the motions. Orszag later responded by suggesting the Business Council compile a wish list in writing. What was it, precisely, they wanted?

The Business Roundtable and the Business Council on June 21, 2010, sent in a 47-page report called “Policy Burdens Inhibiting Economic Growth” that listed hundreds of complaints about regulations, taxes, the new health care reform law, the federal deficit and massive debt.
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Immigration policy is broken and corporate tax rates are too high, the report said. The list of specific burdens ranged from Mexican trucking tariffs “placing U.S. Businesses at a competitive disadvantage” to a new credit card law that would require “millions of gift cards currently in the stream of commerce” to be replaced.

Nine days later, on June 30, Seidenberg had a two-hour meeting with Jarrett in the West Wing to receive the administration’s response to the report.

Jarrett was furious.

This is total bullshit, she said, carpet-bombing the White House with a 47-page inventory of complaints without singling out what was really important. This was unfair, done without warning, not in the spirit of collaboration.

Seidenberg was astonished at the reaction. After all, Orszag had asked them to be specific.

• • •

Greg Brown, the president and CEO of Motorola Solutions, took a seat on the couch in the Oval Office on Tuesday, October 12, 2010. Obama’s outreach program had by now extended to seven lunches, each with a trio of CEOs; attendance at key business group gatherings; and several one-on-one sit-downs like this one.

Brown, 50, a cerebral executive, had at first found Obama personable, bright and articulate in a previous meeting. Yet underneath the surface polish, he sensed remoteness. Obama talked, then seemed to listen—but Brown got the feeling that he was really just waiting to talk again, to make his points, to win the argument.

Brown wanted to help close the widening divide between Obama and America’s business leaders, so he was determined to be forthright. After discussing the state of the economy—not bad, not good—they turned to the question of how the president might improve relations with CEO America.

Trust is low, Brown said. You come to meetings with us, use a TelePrompTer, take no questions—or only prearranged questions—and the media is in the room. Those are three things that are not conducive to an open exchange. It would be viewed more favorably if the media wasn’t there, you lost the TelePrompTer, and we just talked. Take questions, give some short remarks, and follow them with a genuine, unprogrammed discussion—both ways.

Obama didn’t say anything, just sat with his hand on his chin.

Second, Brown said, the rhetoric is inflammatory. It is not constructive.

Give me an example, Obama said.

“Fat-cat bankers”—something the president had said on the CBS program
60 Minutes
a year earlier.
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That was offensive to me, Brown said. I’m not a banker or on Wall Street. Using that language is polarizing. I’m not defending financial services or the banking CEOs. I’m on a different point: It is not appropriate, it is not presidential.

“I’m surprised that you have such thin skin,” Obama replied.

I don’t, Brown said. It is not presidential, he repeated. We can agree
to disagree, and you can have a strong point of view, but I didn’t think that was a presidential comment.

Okay, the president said.

Let’s assume you don’t change even one policy—nothing bipartisan or Republican. No common ground with the business community. The atmospherics are critical. If you changed the way you talk about business, the way you talk with business—no TelePrompTer, more casual, less performance, no photo op—you would generate better feelings.

Then there was Larry Summers.

Larry Summers, I’m sure, is brilliant, Brown said. No question. In fact I think he’s probably an economic savant. But he’s a pain in the ass to deal with. He’s an obstacle. And nothing ever comes out the other end.

“Greg,” Obama said, “he’s leaving.” The administration had announced in late September that Summers would leave at the end of the year.

But he’s still here for a while, Brown continued. Summers was a big issue with the CEOs. When they had questions about administration policy or plans, they were told to see Summers. When I call, I don’t get answers. I get cross-examined for even asking questions. And it’s not a fun experience. So while he’s an economic savant, nothing gets done.

The president burst into laughter. “Larry’s leaving,” he repeated.

Brown felt he had at least achieved his goal of being frank with the president. But would anything change? The president did not have to agree with the CEOs, and since he was a progressive Democrat, there was no reason to believe he would. But he had to show he was listening, find ways to accommodate them, and demonstrate some empathy for those running businesses in a down economy.

The abuse had to stop. It wasn’t just Summers, it was also Rahm Emanuel, the chief of staff and the eyes, ears—and some would say tentacles—of the White House.

Emanuel was in regular contact with Sam Palmisano, the CEO of IBM. It was an opportunity for Palmisano, a major business leader, to offer his thoughts on the reduction of government spending, stimulating investment, creating jobs, pressing for free trade, reforming the
corporate tax code, and working harder to help businesses be more competitive.

Often Emanuel didn’t like what he heard because it seemed to be the standard business agenda.

Palmisano voiced his objection on one administration health care proposal to Emanuel, saying it would cost IBM about $700 million over 10 years. “You got to understand how we work,” he explained. “My role is to maximize profits. Yours is to get your guy reelected.” The $700 million in increased cost would mean he would have to lay off some 20,000 employees out of his workforce of 426,000 to offset the new costs and keep profits steady.

“What the fuck!” Emanuel shouted. That’s not going to happen. Jobs were a sensitive subject. What the fuck are you talking about? He continued to drop F-bombs over the phone.

“It’s just math,” Palmisano replied. “Don’t get yourself crazy. Economics is not politics.”

The phone call then ended abruptly.

Reports quickly circulated among CEOs that Emanuel had hung up on Palmisano. But the IBM chief later said that he thought Emanuel just had to leave the call in a hurry.

Palmisano, nonetheless, believed the Obama White House had a bigger problem. Obama had no chief operating officer, no COO to implement his decisions. He had people like Emanuel whose primary focus was Congress. And Obama had Valerie Jarrett and David Axelrod but they were advisers, and in Palmisano’s view “political hacks” and “B or C players” who did not know how to get serious about fixing problems and following through. There was no implementer. Thus the country was adrift and was not serious about its most fixable problem—becoming and staying competitive.

Whatever the analysis, however, it was clear the Obama business outreach program needed work.

• • •

On December 8, 2010, Ivan Seidenberg released another Business Roundtable manifesto called “Roadmap for Growth.”
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It covered “the
deep recession and weak economic recovery,” high unemployment, the federal deficit and “unprecedented” debt.

Seidenberg said publicly, “I think the president has shown a willingness to learn.”
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Jarrett immediately phoned Greg Brown of Motorola.

“The president is learning?” she asked. “Is Ivan the teacher and he’s the student? This is offensive.”

She emailed Seidenberg directly just one word: “Learning?” Then she called him and expanded on her outrage.

Valerie, Seidenberg wrote back, that was an extreme compliment. Wasn’t everyone, the president and the CEOs, always supposed to be learning?

Unappeased, Jarrett continued contacting other members of the Business Roundtable to say that Seidenberg had insulted the president of the United States.

• • •

The bottom line for Obama, as best Seidenberg could tell, was that the president did not trust that anything he did with the business leaders would ever work out for him. If he cut a deal with business, he was going to look bad. Business’s interests were not his. And whenever Obama was cornered, out would tumble the “fat cat” language.

Seidenberg felt that the president just didn’t think it was important to address the complaints of the business leaders. That was a mistake, he told Jarrett. He had been the CEO of Verizon throughout the entire Clinton and George W. Bush presidencies.

“With all due respect,” he said, “we will be here when you’re gone. I’m a perfect example of that. So you have to realize that this very progressive agenda, and this once-in-a-lifetime moment for this man in this world can be lost because guys like me can hunker down and wait you out.”

So, the theory of the business case shifted. If Obama was going to be a pain in the ass, Seidenberg calculated that maybe they should turn to the GOP. “The best way to check them is McConnell and Boehner.”

Word of this soon reached the House minority leader, and it was not long before Ivan Seidenberg’s phone rang.

“I’d like you to do a fundraiser for me,” Boehner said.

Seidenberg said he’d be delighted.

Two weeks later, at an event in New York City, the business community raised $1.5 million for Obama’s main Republican opposition. It was only the beginning.

• • •

After 16 months on the job as OMB director, Peter Orszag wanted out. Obama and the other senior staff—Emanuel in particular—agreed it was time for him to go. Emanuel thought Orszag was leaking to the media and said he had too cozy a relationship with congressional Democrats.

Orszag delivered his final speech as a cabinet member at the Brookings Institution on July 28, 2010.
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Responding to a question, he affirmed that it was the administration’s policy to push for extension of the Bush administration’s tax cuts for middle-and lower-income taxpayers, but to allow the cuts for the wealthy to expire.

“That’s the administration’s position, period,” he said.

But privately, Orszag was increasingly concerned that the administration was going to move to make the Bush tax cuts permanent. “A disastrous course,” he warned, because the Treasury needed more revenue.

His last day as OMB director was to be July 30, and with his time in the cabinet waning, Orszag had his good-bye session with Obama. His kids had their photo taken with the president, and Obama made one last request of Orszag.