Obama is wrong on how to make jobs

* NOVEMBER 30, 2009

White House, Business Leaders Split on How to Create Jobs



By NEIL KING JR. and GARY FIELDS

WASHINGTON -- The Obama administration and U.S. business leaders will meet at the White House this week to ponder ways to boost employment. Their ideas, though, don't overlap much.

Businesses of all sizes are brimming with proposals they say would spur economic growth. The most commonly voiced are tax cuts and boosting access to credit.
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The White House, for its part, wants to discuss job growth in the clean-tech sector and shifting some stimulus spending to infrastructure projects. Obama aides are also eyeing a limited range of incentives for small businesses to create jobs.

A 10.2% jobless rate, the worst since 1982, is emerging as the administration's biggest domestic challenge, a threat to the weak economic recovery and Democrats' hold on Congress. But many of the nostrums floated by business would increase spending or reduce tax receipts, unpalatable moves for the White House as the nation's huge deficit becomes a political liability.

Another point of contention: A number of chief executives say the government should clear up uncertainty over health care, energy prices and financial regulations. "Companies large and small are saying, 'I am not going to do anything until these things -- health care, climate legislation -- go away or are resolved,' " said Dan DiMicco, chief executive of steelmaker Nucor Corp.



Across the spectrum, business owners say tax cuts would be the best fuel for job growth. "The first thing they should do is lower the corporate tax rate," said Michael Klayko, chief executive of network supplier Brocade Communications Systems Inc., one of the few companies, even in Silicon Valley, that continues to hire.

Mr. Klayko said big tech companies and other multinationals would jump at the chance to bring billions of dollars in overseas earnings back to the U.S., if the Obama administration offered a tax holiday on repatriation similar to a move the Bush administration made in its second term.

Bill Rys, tax counsel at the National Federation of Independent Business, said his trade group is pushing for a payroll tax holiday.

The U.S. Chamber of Commerce is pitching an even longer list of tax breaks, including a reduction of the corporate capital-gains tax and a permanent elimination of the estate tax.

Write to Neil King Jr. at neil.king@wsj.com and Gary Fields at gary.fields@wsj.com