Goolsbee Defends Obama’s Policy

Austan Goolsbee, head of the White House Council of Economic Advisors, defends President Obama’s working relationship with the business community. Watch the video.

CEO Council: Rep. Cantor on the New Congress

Republican Whip Eric Cantor comments on the priorities of the incoming freshman class of Republicans in Congress, including the creation of jobs and curbing spending. Watch the video.

Global Trade, White House Advocacy Top Issues at CEO Council

Aggressive promotion for global trade, presidential backing for business and medical tort reform are top priorities needed bolster economic growth and confidence in business, according to a group of business leaders at the annual Wall Street Journal CEO Council.

The executives on Tuesday also supported factors to make U.S business more competitive by cutting various taxes and a push to reduce the U.S. budget deficit. The executives’ focus on getting their ideas heard and recognized by President Barack Obama’s administration, and also on clarity they feel could boost economic stability, were repeated areas of focus during the conference.

“The president and his administration needs to articulate what he expects of business,” and business leaders “need to rally around what he said,” said Ivan Seidenberg, chief executive of Verizon Communications Inc., during the conference.

Rep. McCarthy: House Freshmen Wary of Raising Debt Ceiling

Rep. Kevin McCarthy (R., Ca.), likely the next House whip, said the House of Representatives incoming freshmen will remain wary of increasing the U.S. debt ceiling until lawmakers reverse current trends. “The House freshmen are very concerned about the debt ceiling right now,” Mr. McCarthy said on the sidelines of The Wall Street Journal CEO Council.

“The debt ceiling is going to come up for a vote in a number of months. We have to be able to show that we are changing the direction of the way the debt is going.”

Many conservative candidates ran campaigns criticizing their opponents for voting to lift the debt ceiling earlier this year, and promised to vote against another increase when federal borrowing hits the current cap. Failure to extend the ceiling above its current limit of $14.3 trillion could shake the bond market and the dollar. “I don’t think our party sees where debt is going to keep going up, and we’re going to keep raising the debt (ceiling). We want to see a fundamental change in behavior,” Mr. McCarthy said. “The feeling I get from freshmen now is that they are not there. So we’ve got a lot of work cut out for us.”

Goolsbee: Economy Needs to See Tax Cut Extension

One of President Barack Obama’s top economic advisers on Tuesday brushed aside suggestions that the White House is giving industry a cold reception, saying the business community had a “direct influence” on series of administration policies to cut taxes for small businesses and boost exports.

Austan Goolsbee, who chairs the White House Council of Economic Advisers, told a group of corporate titans that he is “puzzled” that the community thinks the Obama administration is anti-business.

“I think that’s a bit unfair,” Mr. Goolsbee said, speaking to chief executives at The Wall Street Journal CEO Council.

Mr. Goolsbee said the most pressing economic issue for the U.S. is to remove uncertainty and the best way to do that is to extend Bush-era tax cuts for the middle class. Not extending the tax cuts, which require congressional approval, before the end of the year “would be a major negative shock to consumer demand on the economy.

Kindred Health Sees ‘Choppy’ Environment for Health Services

The environment for patient volume in the health-care services sector, under recent pressure from economic forces, could remain “choppy” for years, the CEO of Kindred Healthcare Inc. said Tuesday.

Like other health-services companies, the operator of long-term acute care hospitals and nursing and rehabilitation centers has felt a pinch in recent quarters from a general slowdown in patient traffic linked to economic turbulence.

“Until there’s more economic certainty overall in the macro economy, and until the extension of benefits under health-care reform in 2014 actually kick in, it could be a choppy volume environment over the next few years,” Kindred Chief Executive Paul Diaz said. He spoke in an interview on the sidelines of the Wall Street Journal CEO Council conference.

Murphy Oil CEO: Gulf Drilling Delays Will Weigh on 2011 Offshore Output

Murphy Oil Corp. Chief Executive David M. Wood said that the company’s Gulf of Mexico production could shrink by as much as 30% in 2011 amid continuing uncertainty over U.S. deepwater drilling.

The U.S. government’s moratorium on deepwater drilling that was lifted last month “still has a long shadow that’s cast over our business,” Wood said, speaking on the sidelines of the Wall Street Journal’s CEO Council conference.

Enacted in the wake of BP PLC’s (BP, BP.LN) deadly Deepwater Horizon oil spill and the subsequent 4.9-million-barrel oil spill, the deepwater drilling moratorium shut down for five months. And despite the ban’s lifting, government approval to drill new wells in depths greater than 500 feet has been slow to resume.

Murphy removed one of its two deepwater rigs from the Gulf of Mexico – a Diamond Offshore Drilling Inc. owned rig that was moved to West Africa – and the other remains unable to work off the U.S. coast. Wood said the company has applied for permits to restart drilling with its remaining rig but has so far not been granted permits.

“We were fortunate to be able to relocate” one of the rigs, Wood said. And though Murphy has said it will concentrate U.S. efforts on the oil-rich Eagle Ford shale formations in south Texas, 80% of the El Dorado, Arkansas company’s energy production efforts will take place abroad.

The company plans to hire in 2011, but those employees will “invariably” work outside the U.S. or on a project beyond the country’s boarders, Wood said.

Earlier this year Murphy announced plans to shop its three refineries, each located in the U.S., but Wood said those deals won’t likely be completed until 2011.

Duncan: Education System Must ‘Reward Excellence’

Education Secretary Arne Duncan asked business executives to pressure policymakers at every level of government to improve an education system that’s falling behind the rest of the world.

The U.S., in a single generation, fell from first in the world in college graduates to ninth, Duncan told The Wall Street Journal’s CEO Council. Too many students are dropping out of high school, he said. And in math and science education, at least 20 countries beat the U.S.

“We’re simply not producing the citizens, the workers, that you guys need,” Duncan said. “We have not had enough passion, enough push from the business community, and your collective voice is extraordinarily powerful.”

Duncan led the Chicago Public Schools for more than seven years before taking his post in January 2009. Since then, the Education Department has led new programs, such as Race to the Top, to encourage changes in K-12 education.

“We’re going to confront everyone, and have been,” including unions, parents, politicians and school board members, Duncan said. “We’re going to continue to challenge the status quo. And we have to look into the mirror and challenge ourselves” at the Education Department, he said. “All of us have to move outside our comfort zones.”

Duncan said education policy before he arrived was “very punitive,” leading states to dummy down standards and water down their curricula. “We need to reward excellence and growth. We’re now raising standards. We’re breaking through on that.”

The nation’s best educators should be rewarded early in their careers, without having to wait decades for higher pay, he said. “I think our great young teachers should make $100,000,” he said. To address a shortage of math and science teachers, he suggested picking a higher salary — perhaps $15,000 to $20,000 above current levels — to draw people into those jobs.

“If you poll teachers, teachers want to be rewarded,” Duncan said. “The last thing they want is to be teaching next to a bad teacher.”

WPP CEO Backs Recently Raised Optimism For 2011

WPP PLC Chief Executive Martin Sorrell said Tuesday he maintains his recently heightened optimism for advertising markets in 2011.

The Dublin-based marketing giant, owner of advertising agencies including Ogilvy & Mather, Young & Rubicam and JWT, reported last month a third-quarter sales surge of 12%. The U.S. recovery was a big catalyst, and the company issued an upbeat forecast for the rest of the year.

At the time, Sorrell also said he was “slightly more optimistic” about 2011 than he was three months earlier. That remains the case, he said, speaking on the sidelines of the Wall Street Journal CEO Council conference.

Sorrell doesn’t think the U.S. market can maintain the recent rapid pace of growth–which has been four times the rate of gross domestic product growth, he said–but emerging market growth should fill the breach.

“I think we’ll get that counter-balance,” Sorrell said.

Bloomberg Calls for Carbon Tax

New York Mayor Michael Bloomberg told a group of chief executives that he’s in favor of a carbon tax — a view not shared by many political leaders of either party in Washington.

Mr. Bloomberg, speaking to the Wall Street Journal CEO Council, said the U.S. needs to reduce its dependence on foreign oil if “you want to stop sending your money to … terrorists.”

The answer, he said: “We need a carbon tax.”

Mr. Bloomberg, an independent, criticized the now-moribund Democratic proposal to develop a nationwide “cap and trade” system for limiting U.S. carbon dioxide emissions by requiring companies to buy tradeable permits for the right to emit greenhouse gases under a steadily declining economy wide cap.

“Cap and trade is filled with so many special interests,” he said.

Mr. Bloomberg downplayed speculation that he may consider a run for President, saying he had a great job already. He more forcefully dismissed the idea of an independent candidacy.