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Business leaders: Obama earned mandate but has to lead

Barack Obama won a mandate in his reelection as president and his top priority must be addressing the "fiscal cliff" the U.S. economy is sliding towards. Those were two of the overriding themes laid out by business leaders in a press conference held roughly 12 hours after Obama officially won reelection, defeating former Massachusetts Governor Mitt Romney, who had put himself forward as friendlier to business than the incumbent.

Barack Obama won a mandate in his reelection as president and his top priority must be addressing the "fiscal cliff" the U.S. economy is sliding towards. Those were two of the overriding themes laid out by business leaders in a press conference held roughly 12 hours after Obama officially won reelection, defeating former Massachusetts Governor Mitt Romney, who had put himself forward as friendlier to business than the incumbent.

"The president, I believe, has won a mandate; that's what elections are all about," said John Engler, president 
of the Business Roundtable (BRT) and former Republican governor of Michigan. "When you win, you have a mandate, and it's not the margin, it's the victory." Asked if that mandate is to raise incomes on high earners, Engler said plainly, "I think the mandate is to lead."

NAM President John Engler
Greg Casey, BIPAC
NAM Jay Timmons
Top to bottom: John Engler, president Business Roundtable; Greg Casey, president and CEO of BIPAC; and Jay Timmons, president and CEO of NAM.

Greg Casey, president and CEO
 of the Business Industry Political Action Committee (BIPAC), echoed Engler and stated a hope that the seemingly permanent campaign mode, which has polarized Washington, will give way to something more constructive.

"There was a time not long ago when we would divide time this way: there was a time for politics and a time for governing," Casey said, "and over the last few years, we've not seen that time for governing. It's been a permanent time for politics. There is a mandate, and that mandate is to come together to solve these problems. The time for politics is over; it's time now for governing. I think the business community is ready to participate in that."

Business antagonizer in chief?
The positions of BIPAC, the BRT, and the National Association of Manufacturers (NAM) have been at odds with the president's stances at times, particularly regarding regulation and tax policies. Business and the administration, however, have also found some common ground, including the pursuit of free trade agreements and a more expansive energy policy.

As president and CEO of NAM, Jay Timmons has found himself and his association in opposition to some of the Obama administration's policies, a fact he alluded to in his opening comments.

"I really don't think it's any secret that the business community has had some reservations about the agenda in Washington over the course of the last four years," Timmons said, "but today, that is now history. The election is over, and I think folks in the business community believe it's time to unite our country because America's competitiveness is truly at stake and our ability to grow as an economy and to create jobs are paramount."

Asked later if the business community was disappointed in Obama's reelection or if he felt negotiations over matters like the fiscal cliff would be easier if Romney had won, Timmons called the question immaterial.

"It is what it is," Timmons said. "The American people have chosen so that's irrelevant. The bottom line is that businesses have to operate in an environment of certainty, and we are concerned about what our competitors are doing to attract investment and growth and jobs in their countries."

Fiscal cliffs, grand bargains, and hitting the reset button
The fiscal cliff, a combination of $440 billion in expiring tax cuts and forced spending reductions of $108 billion that come due January 1, was at the forefront of the business leaders' minds, with some hope that all or part of the issues could be addressed in the current "lame-duck" session of congress.

For its part, Engler said that the "business community is pledging its support to work with [Obama]" on the cliff, specifically in the lame duck session. Timmons noted that according to a study released by NAM in late October, the fiscal crisis has already had a deleterious economic impact.

NAM's report showed a 0.6% loss in GDP growth by the end of 2012 due to the fiscal cliff, and forecast greater economic impact should no action be taken. If the U.S. were to fall off the proverbial cliff, NAM posited that more than 6 million jobs would be lost, pushing unemployment to more than 11% and plunging the U.S. into a recession in 2013 and dramatically slowed growth in 2014.

Regarding how to address the fiscal cliff, the leaders did not seem overly interested in allowing tax cuts to expire, particularly those for the highest income earners.

"I don't think there's support in either party on raising taxes on small- to medium-sized businesses," Engler said. "I understand the desire to go after the 1%, that's been made pretty clear, but the 1% is not normally defined to include the job creators." According to Timmons, two-thirds of manufacturers file taxes at an individual tax rate, with many of those breaking the $250,000 threshold that would subject them to a rate increase.

Engler argued that the "path of least resistance" might be to extend everything into 2013, when a grand bargain could be ironed out without the pressure to ram through a hurried agreement in a lame-duck session. "It's not like the economy is so strong that [extending all the tax breaks] isn't justified," Engler said. "I think it is justified and then the grand bargain, those are complex negotiations."

Manufacturing makes it into the stump speech
Romney, Obama, and many others who ran for office in the 2012 election cycle made manufacturing a plank on their campaign platforms, whether it was there simply as a talking point or not. "The thing for the manufacturing community that was heartening from this campaign is that everybody was talking about manufacturing," Timmons said, "and it didn't matter what political party they were."

Timmons also noted that if the first four years of his administration were any indication, Obama will continue to engage the manufacturing community, even now that campaign season is over.   

"I do give high marks to the administration for engaging the business community over the course of the last four years," Timmons said, "but I think we've got to do that even more then we have because it's not really just a matter of discussing the problems, it's a matter of agreeing on a blueprint and a strategy to move forward."

That blueprint could be the foundation for something longer lasting. Engler and others noted that a president's second term is often about creating a long-term legacy, perhaps one that includes a rejuvenated U.S. manufacturing sector.

"The first term is often about getting the second term," explained Engler, who was governor of Michigan from 1991-2003, "but the second term is only about: what is the history book going to say?"

"I think that's really the challenge for the administration this time around," Timmons said. "This is the president's legacy, and his legacy can be growing a thriving economy and putting the right people in place for him to do that."

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