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U.S. Chamber of Commerce says economy is improving, but healthcare law must go

January 11, 2011 | 10:11 am

Donohue The head of the U.S. Chamber of Commerce struck an optimistic tone Tuesday about the direction of the economy and the Obama administration's approach to the business community. But he warned that Washington must do more to expand trade, cut the deficit and reduce regulations -- including repealing the controversial healthcare overhaul.

"The state of American business is improving," Chamber President Thomas Donohue said in his annual speech on the topic before a Washington, D.C., crowd of executives, lobbyists and journalists. "Last year, we worried about a double-dip recession. Today, we are cautiously optimistic that the recovery will continue and pick up steam as the year progresses."

The chamber, the nation's largest business organization, predicted that the economy would expand by 3.2% in 2011 and create about 2.5 million jobs. But such job growth still would only reduce the current 9.4% unemployment rate by 1 percentage point, highlighting the need for more pro-business policies "to turn an economic recovery into a jobs recovery," Donohue said.

To do that, Donohue took aim at two of his favorite targets -- the healthcare and financial regulatory overhauls passed by Congress last year. Both major White House priorities must be scaled back to reduce uncertainty among businesses and get them to use some of their record corporate profits to hire workers, he said.

"We cannot allow this nation to move from a government of the people to a government of the regulators," Donohue said.

The chamber supports the attempt by House Republican leaders to repeal the healthcare law, even though the group doesn't expect the effort to get past opposition by Democratic Senate leaders and the White House. The chamber also would like to see the process of writing hundreds of new financial rules slowed down.

The chamber led the charge against healthcare and financial reform, drawing the ire of administration officials and their allies in Congress. The group was a major factor in helping Republicans win big in November's congressional elections, spending millions of dollars to help mostly GOP candidates.

But since the election, President Obama has tried to tone down his often-sharp rhetoric about the role of Wall Street and big corporations in the financial crisis and the sluggish recovery. He made a business-friendly move last week in naming JP Morgan Chase executive William Daley, a former Commerce secretary, as his chief of staff.

Obama also accepted an invitation to give a speech to the chamber next month as both sides try to mend relations. . . .

"It's never been personal with us," Donohue told reporters after his Tuesday speech, noting that the chamber also supported many administration initiatives, including the $814-billion stimulus package in 2009.

Donohue said the "new tone coming out of the White House," along with progress on a trade deal with South Korea and the temporary extension of the Bush-era tax cuts, has helped address some of the immediate concerns of U.S. businesses. But he said more aggressive efforts were necessary by the White House and Congress, such as more spending to improve the nation's highways and airports to facilitate the flow of goods.

The chamber is willing to work with both parties, Donohue said in dismissing suggestions that his organization will simply be an ally of the Republican House majority it helped elect.

"We'll support the new House leadership on many occasions, and we'll work with Democratic legislators as well, but no one should expect the chamber to march in lock step with anyone," Donohue said.

The Republican-led effort to repeal the healthcare law will be "an opportunity for everyone to take a fresh look at healthcare reform -- and to replace unworkable approaches with more effective measures," Donohue said.

The chamber will keep its grass-roots and advocacy programs "fully mobilized, funded and fired up throughout 2011" to push its agenda in Washington, Donohue said. And he ended his speech with a warning for anyone taking on the powerful organization.

"We will not allow the business community to be intimidated and we will use every tool at our disposal to challenge those who try to silence our voice," he said.

-- Jim Puzzanghera

Photo: U.S. Chamber of Commerce President Thomas Donohue delivering his annual "State of American Business" remarks. Credit: Getty Images.