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Bush's business support grows wary

THE BALTIMORE SUN

WASHINGTON - President Bush, working to gain support for his ambitious domestic agenda, is encountering increasing resistance from an unlikely place: American business, a usually reliable ally.

Many of these pro-Republican interests see little potential benefit for them in helping Bush win his two highest-stakes fights: shoring up Social Security and reshaping the tax code.

Business interests still enthusiastically support a number of items on Bush's wish list, including a new energy policy, expanded trade and legal reforms aimed at curbing costly lawsuits and court settlements.

But, "there is a much tougher row to hoe to keep the business community specifically supportive and united on the tax bill, on Social Security, and other parts of the agenda," said Jade West, top lobbyist for the National Association of Wholesaler-Distributors.

Companies have been downright hostile to some of Bush's plans, including a proposal for strengthening the private pension system, which could be costly for firms if they are required to pay higher premiums.

If the resistance continues, it could prove troublesome for Bush, who benefited from strong backing by business and industry in his first term.

Business groups are among the most effective advocates for policy changes. They have the cash for political contributions and to finance high-profile ad campaigns. And they can provide compelling spokesmen - corporate CEOs and local business leaders - to bring heavy pressure on individual lawmakers to take their side.

The White House says that business support is growing for the president's plans and that he is pushing forcefully for the corporate community's favorite initiatives, including an energy measure the Senate began debating this week - originally proposed by Bush in 2001 - and the Central American Free Trade Agreement.

"The president's coalition, on all fronts, is growing - not receding," said Trent Duffy, a White House spokesman, adding that Bush is "pleased" with the degree of support his agenda enjoys in the business community.

But the groups have brought little intensity thus far to the issues at the core of Bush's domestic agenda. One reason for the business lobby's reticence is that neither Bush's Social Security overhaul nor his promised tax reform measure has been translated into concrete proposals on Capitol Hill.

Efforts to spearhead a Social Security measure are proceeding haltingly, stymied by a solid wall of opposition by Democrats and a lack of consensus among Republicans about how to tackle the issue.

Bush and congressional Republicans are awaiting a report from a presidential panel on tax reform, due at the end of July, before proposing changes to the Internal Revenue Code.

"What bill am I supposed to lobby?" said R. Bruce Josten, a top lobbyist at the U.S. Chamber of Commerce. "They're totally abstract and totally undefined, and therefore the business community is going to focus on those issues that aren't abstract and are defined."

These include the broad energy measure, the Central American trade agreement, known as CAFTA, which faces steep obstacles on Capitol Hill, and measures to limit the cost to business of litigation, including one to settle asbestos liability claims.

All are priorities that Bush mentions frequently in speeches. He touched on them yesterday in an appearance at Pennsylvania State University, where he spoke to young people about Social Security, an issue upon which the president has spent far more time and effort this year.

"The business community is interested in the Social Security issue, but when you hear them talk, health care and energy costs tend to be right up there - those are, for them, larger items," said Margo Thorning, chief economist at the American Council for Capital Formation, a pro-business lobby group.

"You have to give the administration credit for getting the debate energized, but this is not necessarily a priority the business community shares. That doesn't mean the business community will not be supportive, but the urgency is much lower," Thorning added.

Many firms and business groups rank Social Security changes below other measures that are likely to have more immediate financial impact on them, said Derrick A. Max, a lobbyist at the National Association of Manufacturers who is heading the business coalition backing Bush on Social Security.

While few companies have expressed outright opposition to the Bush overhaul, he added, some contribute less money and fewer lobbyists to the effort, preferring to focus their resources on issues that have more direct impact on them.

"I don't begrudge associations or businesses that have immediate legislative concerns - energy prices, trade, asbestos, legal liability - those are all things that affect your bottom line now," Max said.

Still, the coalition has grown to more than 300 members active in 34 states, and is on track to raise and spend the $15 million to $20 million it planned this year to influence the Social Security debate.

"There's a growing consensus in the business community that this is a problem that gets more difficult to fix every year, and the current options for reform are not easy," Max said.

Business groups know, too, that the best way to achieve their objectives on their top issues is by backing Bush on his.

"I don't care what your issue is, if the president and the two key chairmen have made it a priority, you ought to make it a priority," Max said.

Many business groups worry, however, that when it comes to what they consider their most pressing issue - how, and how much, they are taxed - Bush may opt for a plan that costs them more.

Businesses are warily watching as the president's tax commission, led by former Sens. Connie Mack of Florida, a Republican, and John B. Breaux of Louisiana, a Democrat, considers alternatives for reshaping the tax code, including shifting the nation toward taxing what people consume rather than what they earn.

"We have certainly told the White House and the Treasury Department that the ability to hold together a unified business coalition in favor of any of these changes will depend, not surprisingly, on the content" of the measure, said West, of the National Association of Wholesaler-Distributors.

Her association's offices served as headquarters during Bush's first term for a business coalition of more than 1,000 members that enthusiastically backed - and helped the president push through - two major tax cuts.

Such a group could be hard to build again as Bush weighs a set of tax changes that some businesses fear will saddle them with higher costs and eliminate advantages they now enjoy.

"It is not clear to us yet, in terms of that coalition, whether we can hold it together," West said. "Until we see a bill, and until we know who the winners and losers are in any tax measure, it's hard to know whether the support will be there."

Without the determined backing of business groups, it could be much more difficult for Bush to build a sense of urgency across the country for the tax changes. That has been the case already with his Social Security proposal, which remains unpopular, polls show.

Garnering grass-roots support for such measures - a forte of the business lobby - is difficult without a specific plan to tout, said Donald A. "Dan" Danner, a senior lobbyist for the National Federation of Independent Business, a group representing small businesses.

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