msnbc.com news services
updated 2/7/2011 3:03:10 PM ET 2011-02-07T20:03:10

President Barack Obama is telling business leaders that despite some strong disagreements, "we can and must work together."

Obama spoke Monday morning at the U.S. Chamber of Commerce, which is so close to the White House that Obama was able to walk across the street to make his comments. His appearance comes as Obama aims to smooth his relations with corporate leaders and persuade major businesses to spend their cash, expand hiring and promote economic growth.

The president said the role of government is to support the economic foundation by spending public money to improve transportation, education and communications systems. He promised an effort to improve the tax code and regulations to give businesses more room to grow.

He added, though: "Businesses also have a responsibility to America."

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Obama also said he wanted to lower the corporate tax rate and eliminate tax loopholes to pay for that, requesting support from the business community to achieve that goal.

Obama promised to remove "a burdensome corporate tax code with one of the highest rates in the world."

After two years of vociferous conflict over health care and financial regulations, the president was offering a olive branch and a challenge to the nation's top business lobby — the U.S. Chamber of Commerce.

Obama's speech to the group was a first for him. Not four months ago, he had attacked the huge, Republican-leaning trade organization for failing to disclose donors to its $32 million congressional political campaign. "Their lips are sealed," Obama said at the time, "but the floodgates are open."

The White House and the Chamber now are highlighting areas of common ground and expressing a joint commitment to creating jobs. Obama has stressed his new economic agenda, featuring competitiveness, innovation, energy and entrepreneurship. Disagreements linger and are no less vehement, but they no longer are the subject of loud legislative battles and big-dollar advertising campaigns by the Chamber.

In his radio and Internet address Saturday, Obama said he planned to tell businesses they have an obligation to stay in the United States, hire American workers and invest in the nation's future.

The speech — part nudge, part courtship — is a message to business that is hardly limited to the Chamber of Commerce. Obama met with some of the nation's top 20 executives in December, gently prodding them to get cash off their balance sheets and use it to create jobs. Also in December, he negotiated a compromise with Republicans on tax cuts that won him some grudging boardroom support.

It wasn't always so. During his first two years as president, Obama was known to play a populist hand, referring to bankers as "fat cats," rebuking corporate lobbyists and casting the insurance industry as an antagonist in the health care debate. So bitter were the fights, they overshadowed areas of solid agreement, including the Chamber's support of Obama's 2009 economic stimulus plan and the bailout of automakers General Motors and Chrysler.

"What's changed now? I would use four words," U.S. Chamber of Commerce President Thomas Donohue said in an interview with The Associated Press. "The election has changed."

The Republican wave in the November election wrested control of the House of Representatives from the Democrats. It created a need for more compromise in the legislative process and for the type of outreach Obama did not seek — and Republicans did not offer — when Democrats were in total control.

Obama needs the centrist cloak that the business community offers. The Chamber can benefit by softening the sharp edges it developed fighting the health care overhaul and tighter financial rules.

Both sides need each other for policy, as well. The Chamber can help the Obama administration win congressional support of trade deals, particularly a recently renegotiated pact with South Korea. Both the White House and the Chamber face Republican opposition to increased spending on public works, from roads and bridges to wireless networks.

On trade, on infrastructure and — mostly — on regulations, Donohue said, companies want certainty from the government.

"The reason the companies are sitting on $2 trillion worth of cash is because of uncertainty," he said.

Private sector allies
Obama long has had allies in the private sector. He has given corporate CEOs advisory roles, and throughout his first two years, he held periodic lunches with executives at the White House. But until now, he had not brought them into his inner circle.

Last month, that changed. Obama named Bill Daley, a former commerce secretary and JPMorgan Chase executive, as his chief of staff. He promoted Gene Sperling, a known quantity to the business community, as his new chief economic adviser. He gave high-profile assignments to General Electric CEO Jeff Immelt and AOL founder Steve Case.

In one of his first calls in his new post, Sperling called Donohue, who welcomed him with characteristic bluntness: "Glad to have someone over there I'm comfortable sparring with at 10 a.m. and sitting down with at 2 p.m. to work on policy."

The story, confirmed by White House and Chamber officials, helps illustrate the 2011 version of this relationship.

Donohue also saw Daley's appointment as a positive signal.

"Daley is a big-time Democrat, but he's a sound guy," Donohue said. "He knows how the town works, he knows how business works. He knows how the system works."

Still, the Chamber can be a sharp-elbowed foe.

"The Chamber is an enormously sophisticated Washington insider organization and is run by very conservative Republican operatives, for the most part," said Matt Bennett, a vice president at the centrist but Democratic-leaning Third Way. "That relationship is always going to be more difficult than the broader outreach to business."

But the joint focus these days is jobs. In front of the 10 massive Corinthian columns that grace the front of the Chamber's building, Donohue has authorized the placement of giant banners that spell out J-O-B-S.

The letters are visible from the White House through the bare winter trees of Lafayette Square — offering both a sign of common purpose and a reminder to the White House occupant of the 9 percent unemployment rate that still bedevils him.

The Associated Press and Reuters contributed to this report.

Video: Obama presses Chamber of Commerce on jobs

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