The Obama Administration and the US Chamber of Commerce, America’s largest business lobby, are at odds and now it appears that the it will escalate this week with the group’s plan to host a “Jobs Summit” highlighting where the Chamber believes Washington is Wrong.

The “Chamber” is accusing President Barack Obama of following a pro-union agenda that is burying US businesses in a new generation of regulations, Tom Donohue, president of the Chamber, whose imposing headquarters stands opposite the White House, said Washington’s trajectory is creating more uncertainty for businesses that will mean more job destruction. Donohue cited Obama’s failure to move the trade agenda forward at a stage when much of the rest of the World is moving ahead.
Interesting facts: Check this number out: US$450M. That’s what the labor unions spent in the elections 18 months ago,” Mr. Donohue said recently. “I think the Obama administration has demonstrated in more than many ways that they are concerned about a union agenda…The unions paid a deep price for it and they want some return.”

Mr. Donohue, whose organization plans to spend at least US$50M in the run-up to the mid-term elections in November, mostly on Republican candidates, also attacked the recently passed financial re-regulation bill (FINREG), which Democratic leaders pushed through Congress last week.

He said that the bill has 357 “rule makings”, 74 studies and 47 reports, compared with just 14 in total for the controversial Sarbanes-Oxley bill passed following the financial scandals at Enron and WorldCom in Y 2001. This, in addition to the regulatory costs of March’s healthcare bill, was stopping businesses from investing, he said.

US corporations have almost US$2,000B in cash in their treasuries, according to estimates. “Look at the tax cost in the healthcare bill and the tax cost in the capital markets bill and they add up to hundreds of billions of dollars,” said Mr. Donohue. “It is a fundamental uncertainty that is holding businesses back today.”

The defenders of the Obama administration say that businesses have benefited from the recovery at a stage when joblessness continues at close to 10% nationwide and about 12.5% in California.

US corporate profits have risen by 36% this year, and profit margins as a share of Gross Domestic Product are at/near post-war records.

Corporate analysts say that most of the gains in US profitability came from cutting jobs, with more than 7M shed since the start of the recession in December 2007.

Many economists say it is the lack of demand, rather than fear of regulatory change, that constrains US businesses. Consumer spending typically accounts for 70% of US GDP.

But Mr. Donohue points out that the Chamber has backed Mr. Obama on a number of areas, including last year’s US$787B stimulus, and he denies there is a bad relationship with the White House. “Look, my job is not to run around and agree with him and his job is not to run around and agree with me,” he said. “I’m pretty comfortable with where we stand and maybe some of those Chicago guys, aka Obama advisors, are learning a little bit about Washington.”

One lesson is on the bill on climate change, which Democratic leaders hope to revive in the next few weeks, having stripped it of measures to introduce a carbon price. The Chamber strongly opposes cap and trade.

Last year, several companies, including Apple, quit the Chamber over its stance. “If we do not create the jobs there’s not going to be any appetite for Green energy or Green anything,” said Donohue. —Paul A. Ebeling, Jnr. www.livetradingnews.com

Posted by Shayne Heffernan on Jul 19th, 2010and filed underEquities, Latest News, Limelight, Markets, News & Events.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site