President Obama’s decision to tap General Electric Co. Chief Executive Jeffrey Immelt to lead an initiative on jobs and U.S. competitiveness highlights two key White House focuses: Obama wants to convince corporate America that his administration is not anti-business, and he wants to show average citizens that the economy is no longer on life support.
Immelt will replace former Federal Reserve Chairman Paul Volcker as head of a reconstructed White House panel of business, labor and academic leaders that has offered periodic economic advice to Obama since early in his presidency.
For months Obama has faced criticism that his senior staff was filled with academics and political appointees who had no real-world business experience. Senate Minority Leader Mitch McConnell (R-Ky.) recently said he wondered whether anyone at the White House had ever even run a lemonade stand.
By tapping Immelt to head the new board, Obama sent a signal to the corporate world that he wants to mend a strained relationship.
“At least now the White House is acknowledging that advice from people who actually work in the private sector would be helpful in developing sound private-sector pro-growth policies,” said a top House Republican, Rep. Tom Price of Georgia. But, he added, “the Obama administration needs to rework its policies, not just its staff.”
With the two-year mandate of the panel — the President’s Economic Recovery Advisory Board — expiring next month, Obama decided to change its makeup and mission.
He rechristened the panel the President’s Council on Jobs and Competitiveness to underscore the administration’s focus on the next steps of recovery — bringing down the nation’s persistently high unemployment rate, now at 9.4%, and reversing the huge U.S. trade deficit.
“The past two years were about pulling our economy back from the brink,” Obama said Friday in announcing the move during a visit to a GE plant in Schenectady, N.Y. “The next two years, our job now is putting our economy into overdrive.”
The choice of Immelt as the new chairman puts the leader of one of America’s iconic corporations out front in the administration’s effort to boost the sluggish economy.
“There is always a healthy tension between the public and private sectors,” Immelt wrote in an opinion article Friday in the Washington Post. “However, we all share a responsibility to drive national competitiveness, particularly during economic unrest. This is one of those times.”
But Obama’s move appears to be as much symbolism as substance.
The earlier panel, on which Immelt also served, met with the president just four times in two years. Asked about the infrequency, White House Press Secretary Robert Gibbs said Obama would probably meet more regularly with the new group.
The economic recovery board helped shape administration policies on expanding exports and incentives for energy efficiency. But if the past is a guide, the council won’t have real sway over the day-to-day decisions by Obama’s full-time economic policy team.
Still, the new effort, aimed at expanding the U.S. manufacturing base, increasing exports and boosting research and development, could help the economy in the short and long term, said Sarah Rosen Wartell, executive vice president of the liberal Center for American Progress.
“One of the most powerful things the president can do is convene and organize people around ideas … and send powerful signals about investment priorities,” she said.
But the biggest short-term effect could be political.
Just like the economic recovery, Obama’s presidency has entered a new phase. After historic Democratic losses in November’s midterm elections, Obama has moved aggressively to appear more business-friendly as he tries to persuade U.S. companies to spend some of their more than $1 trillion in cash to hire more workers.
Obama has softened his rhetoric, invited Immelt and other business leaders to a private meeting last month and appointed banking executive William Daley as his new chief of staff. Just this week Obama ordered his administration to weed out regulations that “stifle job creation and make our economy less competitive.”
Accelerating the economic recovery will be a key theme of Obama’s State of the Union address Tuesday. And early next month, Obama will give a speech at the home of one of his sharpest critics, the U.S. Chamber of Commerce.
Chamber President Thomas Donohue called Immelt’s appointment “a promising step.” And the National Assn. of Manufacturers also praised the move.
“Jeff Immelt gets it,” said the trade group’s president, Jay Timmons. “He understands that our country needs a strategy for sustained economic growth and competitiveness if we are going to succeed in the international marketplace.”
But GE’s history of moving some of its manufacturing operations overseas didn’t sit well with some liberals. Sen. Bernie Sanders (I-Vt.) said he hoped that Immelt’s appointment “indicates a transformation in his thinking.”
In Schenectady, Immelt touted products that GE is manufacturing in the U.S. He said 4,000 employees at the plant there were building wind-power-generation machinery and other renewable-energy equipment.
“I know that despite the fact that 60% of GE’s revenues are outside the United States, I personally, this company, share in the responsibility and the accountability to make sure that this is the most competitive and productive country in the world,” Immelt said.
Immelt, 54, who took over as GE’s CEO from corporate legend Jack Welch in 2001, is a self-described Republican. Just $13,550 of the $73,800 Immelt has given in federal campaign contributions since 1990 went to Democrats, according to the Center for Responsive Politics. None went to Obama.
In fact, in 2007 Immelt contributed $2,300 to the Democratic primary campaign of Obama’s chief rival, Hillary Clinton.
Immelt and Obama got to know each other through the economic recovery board, White House spokesman Gibbs said. Immelt was among a group of U.S. CEOs who met with Obama during his trip to India last year. And Obama invited Immelt and his wife, Andrea, as guests at Wednesday’s state dinner for Chinese President Hu Jintao.
“Jeff is somebody who brings a wealth of experience to the table,” Obama said. “He is one of the nation’s most respected and admired business leaders.”