higher taxes on the rich takes a bit of the sting out of the idea of raising rates, for both Democrats and Republicans. Indeed, by appealing to both camps and enlisting their support, Obama hopes to neutralise potential critics, according to allies of the president on Wall Street.
Obama’s supporters cited the example of Frederick W Smith, the chief executive of FedEx. Last week, Smith signalled he was not angered by higher tax rates for the wealthiest individuals, a centrepiece of Obama’s plan to reduce the deficit and a key sticking point for Republicans in Congress.
“If people who didn’t support the president believe the president is acting reasonably, they’re going to put pressure on the other side,” said Marc Lasry, a longtime supporter of the president who runs Avenue Capital. “You need both sides to be reasonable.”
For example, Lasry invited the real estate tycoon Barry Sternlicht, a onetime Obama supporter who raised money for Mitt Romney in the last poll cycle, to the White House last week. Lasry, who has $13 billion under management, including $1.3 billion of his own money, is among a small group of Wall Street figures who stuck with Obama before the election, even as those like Sternlicht deserted him.
This core group met with Obama on November 16, and included Tony James, president of the Blackstone Group, as well as Roger Altman, a Democratic stalwart who is executive chairman of Evercore Partners, and Robert Wolf, a longtime UBS executive who recently began his own firm, 32 Advisors.
Also in attendance were Blair W. Effron, co-founder of Centerview Partners, and Mark T. Gallogly, a Blackstone veteran who founded Centerbridge Partners in 2005.
To be sure, most executives genuinely fear the consequences of the automatic spending cuts and tax increases if a compromise is not found by Jan. 1, but the efforts by big business to press politicians in Washington could also pay large dividends in the future.
While most business leaders now say they are willing to support increases in tax rates for individuals as well as cuts in entitlement spending, their stance in favor of lower corporate tax rates could