February 7th, 2011
09:23 AM ET
By CNNMoney Staff Reporter Charles Riley
NEW YORK (CNNMoney) - President Obama made the case Monday to business leaders that ramping up spending on education and infrastructure will promote economic growth and put the economy back on track.
"We need to out-innovate, out-educate and out-build our competitors," Obama told the U.S. Chamber of Commerce. "We need an economy that's based not on what we consume and borrow from other nations, but what we make and sell around the world."
Obama spoke before 200 members of the U.S. Chamber of Commerce, a group that hasn't always been on friendly terms with the administration.
The president acknowledged the tensions, telling members of Washington's most powerful business lobby that "we've had some pretty strong disagreements." But the president also sought common ground, noting that the Chamber supported the 2009 Recovery Act.
The federal government will work to improve transportation and communications networks, invest in education, provide research incentives, rebuild crumbling infrastructure and reform the corporate tax code, Obama said.
At the same time, Obama said Washington will keep spending under control, and that he will work with both parties to "take additional steps across the budget to put our nation on sounder fiscal footing."
Obama also said the government needs to reform its own structure, starting with the 12 different agencies that deal with America's exports.
"In the coming months, my administration will develop a proposal to merge, consolidate and reorganize the federal government in a way that best serves the goal of a more competitive America," Obama said.
Monday's meeting is seen as another sign of the thawing relationship between the Obama administration and the business community. It took months to materialize after first being floated by the administration in November.
"I'm here in the interest of being more neighborly," Obama said. "Maybe we would have gotten off on a better foot if I had brought over a fruitcake when we first moved in."
For Obama, it means playing nice with a group that opposed many of his signature policies, and supported Republican candidates with gobs of cash during the midterm elections.
While the Chamber was playing hard nose politics, so was Obama. In the final days of the campaign, Obama used the Chamber as a political punching bag, and accused the group of funneling money from overseas to support Republican candidates.
But shortly after the election, both sides began to sing a different tune. Obama invited 20 CEOs to the White House for a conversation about the economy. And the Chamber supported free trade deal with South Korea forged by Obama.