Business Climbs Aboard

On their two top domestic priorities, President Obama and leading congressional Democrats this week executed pincer movements that allied them with traditional adversaries in business and potentially isolated congressional Republican opponents.

These maneuvers on health care and energy could signal a crucial shift in Washington's tectonic plates of power. Although disagreements remain on both fronts, each move suggests that key business interests have decided to cut deals with a dominant Democratic Party rather than bet on a weakened Republican Party that is hoping to ride uncompromising opposition to Obama back to power. "You've got business that has sometimes opposed everything Democrats have done lining up to help get it done," White House Chief of Staff Rahm Emanuel said.

The potential breakthrough on energy came on Tuesday when Democratic Reps. Henry Waxman of California and Edward Markey of Massachusetts introduced revised legislation to promote renewable energy and reduce the carbon emissions linked to global warming, but at a slower pace than they originally sought. The compromise, which Waxman's Energy and Commerce Committee is set to mark up next week, drew head-turning praise from the Edison Electric Institute, the utility trade association.

While stopping short of a full endorsement, the EEI indicated that it is now looking only for modifications, not a thorough redesign or an excuse to join congressional Republicans trying to derail the bill. "There are probably some things that different people want to see tweaked in the legislation, but ... we would like to see it get into the end zone," said Jim Owen, the EEI's media-relations director. Support from the U.S. Climate Action Partnership, an environmental-business coalition central to the negotiations, is also likely.

"They want to be on the train."

The parallel moment on health care came on Monday when a coalition of six key interest groups, including the Service Employees International Union and trade associations representing hospitals, doctors, drug manufacturers, and the insurance industry, pledged to Obama that they would take steps to reduce health spending by as much as $2 trillion through 2019. Critics correctly noted that the groups did not commit to specific actions that would generate anywhere near such savings. (The administration says they are coming.) But that missed the larger point: The announcement moved these groups, many of which furiously opposed President Clinton's universal coverage plan, significantly further toward embracing Obama's reform agenda. "They want to be on the train," one administration official said.

That could leave congressional Republicans alone at the station. To the extent that Obama can shear off support from businesses usually allied with the GOP, he will make it more difficult for Republicans to portray his agenda as a lurch to the left. Even if Hill Republicans continue to oppose Obama's health care and climate-change ideas en masse, backing from prominent business leaders would provide the president with tangible evidence that he is assembling inclusive coalitions that reach beyond traditional Democratic ranks. Support from utility and energy company executives, for instance, could help Democrats rebut GOP charges that global-warming curbs would sink the economy. "These CEOs are not about to preside over the destruction of their business," Markey said. "They are doing this because they believe they can make money ... even as they create this new clean-energy future."

On health and energy, Obama hasn't yet cemented alliances with business. Lingering differences with industry--over a public competitor to private health insurance, or over the pace of carbon reductions--could still crack these solidifying partnerships. And more-ideological business groups, such as the small-business lobby, will likely remain cool on most issues.

But in the energy and health sectors alike, important industry leaders are clearly growing more comfortable working with an administration that Republicans daily portray as an enemy of free enterprise. "What I really got excited about was [that] in every conversation we got the sense that [administration] folks from all levels wanted to hear what the stakeholders thought would [work]," said a key health official involved in the White House talks. One utility executive offered the same verdict on climate-change discussions with Waxman: By retreating to absolute opposition, congressional Republicans "almost completely" marginalized themselves.

Both the health care and climate-change proposals still face many obstacles before passage. But these early steps show that Obama's instinct for inclusion could allow him to expand his political coalition even while advancing two of his party's top priorities. That's how lasting majorities are built.

This article appears in the May 16, 2009, edition of National Journal.

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