WASHINGTON (AP) — During the election campaign, President Joe Biden likes to attack the American economy harshly.
The Democrat is urging voters to make corporations pay more taxes and is blaming many companies for driving up prices by fueling “greedflation” and “shrinkflation.”
But in recent months, senior Biden administration officials have also increased their outreach to CEOs and other business leaders to hear about their needs, encroaching on the business world terrain that former President Donald Trump, the likely Republican nominee, considers his home turf.
Both candidates want to send the message to their voters in November that they can work with employers, even though many companies are reluctant to publicly take political sides because of the deep divisions in their electorate.
The Biden team’s pitch to business leaders went something like this: “We believe the economy is doing well, but we want to hear from you how we can stimulate investment.”
“They know they will always be heard,” says Lael Brainard, director of the White House National Economic Council. “We are pragmatists. We solve problems for them.”
Biden and Trump are both vying for the economy
On Thursday, Trump will tell the Business Roundtable, an association of more than 200 CEOs, why the economy would be better off if he returned to the Oval Office.
Biden has also been invited to attend the conference, but will be in Italy to attend a summit of G7 leaders. White House Chief of Staff Jeff Zients, himself a former CEO, will be there to present the president’s vision to the group.
Biden has long sought to balance the interests of business and labor, tempering his criticism of corporations by pointing out that, as a former senator from Delaware, he comes from the “corporate capital of the world.”
Trump, for his part, has burnished his reputation as a billionaire real estate developer, marketing everything from educational courses to steaks and ties, and has publicly traded his namesake Trump Media & Technology Group.
After Trump cut corporate taxes and promised massive regulatory cuts during his time in office, he was able to secure the support of Wall Street billionaires such as Stephen Schwarzman, who called him a “voice for change.”
The Washington Post reported that Trump asked oil industry executives for assist in financing his campaign because his administration would bring them profits. The Trump campaign team called this report false.
Trump has called the U.S. economy terrible this year, despite the low unemployment rate of 4% and the rising stock market. His argument resonates with voters because the rise in inflation in 2022 has left many American adults negative about the economy.
Karoline Leavitt, a spokeswoman for Trump’s campaign, said that “business leaders and working families alike are waiting for a return to common sense policies,” such as tax cuts, deregulation and increased oil and natural gas production.
WHAT CEOS ARE TELLING THE WHITE HOUSE
Biden’s top advisers heard a different view of the economy than Trump’s during their discussions with economists. Administration officials say the CEOs they met with are generally pleased with the performance of the stock market and the overall economy, as inflation has eased without the recession some feared.
According to Biden’s team, American business leaders are looking for ways to sustain growth: There aren’t enough skilled workers to fill the open jobs, government approval processes need to be simplified, and they generally agree with the administration’s push to renew a corporate tax break for research and development costs.
Several Biden administration officials said business leaders have also raised concerns with Trump, although the talks between the White House and CEOs were explicitly not about the November election. The tariff increases promoted by Trump could jeopardize relations with trading partners and hurt corporate revenues. Stocks and bonds could crash if Trump tries to gain control of politically independent agencies such as the Federal Reserve or undermine the rule of law that is a bedrock of American capitalism.
The increased outreach by Biden’s team came at Zients’ behest. The chief of staff gathered six other top officials for a dinner in February to implement a strategy that includes talking more with CEOs and their predecessors.
Each official agreed to speak with 10 CEOs. By the end of April, the group members had chatted with more than 100. The contacts led to Biden meeting with eight CEOs in May, including the heads of United Airlines, Marriott, Xerox, Corning and Citigroup.
Deputy Finance Minister Wally Adeyemo said the talks made him more aware of the overlap in issues, saying the government’s renewable energy policy, for example, is crucial to the expansion of data centers used for artificial intelligence.
Adeyemo said the administration has had some success in reducing the federal paperwork required for approval and shortening processing times that could otherwise take up to two years. And as some job creation programs lose funding that was tied to pandemic-era federal aid, the administration is looking into whether businesses can take over funding.
Overall, the government argues that its plans are better for overall growth, which will have a positive impact on profits in the long run.
“We don’t pretend to agree with the business community on everything,” Adeyemo said. “We want feedback and we will continue to talk to you.”
The race to improve workers’ skills
At the meeting with Biden, Brendan Bechtel, CEO of the Bechtel Group, a leading construction company, emphasized the shortage of skilled workers, according to people familiar with the talks. Because companies cannot hire all the workers they need, some are having to forgo contracts, limiting their revenue.
Figures from the Labor Department show that there are currently about 1.5 million more job openings than unemployed people looking for work. And as job openings went unfilled last year due to labor shortages, companies have cut back on job postings. In the manufacturing industry, for example, there are 516,000 job openings, compared to 647,000 a year ago.
The shortage is a reflection of both the sturdy labor market and decades of education policies that favored universities and often neglected the need for skilled tradespeople such as electricians, plumbers and welders. The share of men aged 25 to 54 in the labor force has been degenerating for decades, and reversing that trend could bring millions of them back into the job market.
“In the United States, a college-for-all mentality has developed and other forms of skills development have been degraded,” says Harry Holzer, an economist at Georgetown University.
Commerce Secretary Gina Raimondo has made it her mission to bring more women into the construction industry. The success of her department-funded efforts to revive domestic computer chip production could depend on a gigantic pool of trained workers. She said solving the problem depends on closer partnerships with the companies that hire the workers.
“You have to start with the employers – which may sound counterintuitive,” Raimondo said. “You go to the company and find out who they are hiring, at what wage, and with what skills.”
Raimondo looks at the problem from an economic perspective, since growth would be slower if companies lack skilled workers. But she also sees it as a cultural and political problem. Voters need to be positive that they have a path to the middle class, one of the promises Biden made when he ran for a second term.
“People start to lose hope when they feel like there is no place for them in the economy,” Raimondo said.
