By Joseph Weber; Washington Times

The head of the U.S. Chamber of Commerce Tuesday praised what he called a "new tone" in the Obama administration's dealings with the business community but warned that rising energy prices, the new health care law and a "regulatory tsunami" continue to hurt businesses and slow the drive to create more jobs.

"We begin 2011 in a lot better shape than we found ourselves last year," Chamber President Thomas J. Donohue said during his annual State of American Business address in Washington. "The state of American business is improving."

Despite Mr. Donohue's optimism, including a projection that the economy will create at least 2.4 million new jobs this year, he urged Congress to repeal President Obama's signature health care law and threw his support behind the efforts of the Republican-controlled House to lead the way.

"We see the upcoming House vote as an opportunity for everybody to take a fresh look at health care reform and to replace unworkable approaches with more effective measures that will lower costs, expand access and improve quality," Mr. Donohue said.

In his roughly 30-minute speech, Mr. Donohue largely focused on the chamber's top priorities for 2011 but also struck a conciliatory tone in the contentious relationship with the White House.

He praised Mr. Obama's decision to appoint former Clinton administration officials Gene B. Sperling to be director of the president's National Economic Council and William M. Daley as the new White House chief of staff.

"Bill Daley is a real pro," Mr. Donohue said. "We've worked with him before."

In what is widely seen as an olive-branch offering, Mr. Obama is scheduled to walk across Lafayette Square to address the chamber leadership on Feb. 7.

Mr. Donohue also lauded the president for the recent tax package, which includes the two-year extension on George W. Bush-era lower tax rates and the clinching of a tentative free-trade deal with South Korea.

Mr. Donohue also voiced optimism that Mr. Obama would improve trade relations with Chinese President Hu Jintao when they meet next week in what he called a "very important, geopolitical visit."

Still, Mr. Donohue expressed concern about what he calls a "tsunami of regulations" and the need for comprehensive federal tax reform.

"We'll continue to have our differences with the White House on some issues," he said, "but we'll work together on other issues."

Mr. Donohue said the Obama White House is finally "beginning to understand" that it must address trade and regulatory issues "to get people back to work."

He also made clear the chamber would not automatically support the Republican agenda, including a change in House rules that would steer money away from the federal highway-building trust fund.

"Our approach in Washington will be to call them as we see them," Mr. Donohue said. "We'll support the new House leadership on may occasions, and we'll work with Democratic legislators as well. But no one should expect the chamber to march in lock step with anyone."

He also said the chamber would continue to accept campaign money from donors anonymously despite rising criticism of the practice during the 2010 midterm elections, including that some of the chamber's money came from its foreign-based branches.

"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.

He also cautioned against premature celebrations of a U.S. economic comeback.

"While the recovery may be picking up steam, it is fragile and uneven," Mr. Donohue said. He said, for example, that the chamber made its forecast of 3.2 percent growth of gross domestic product next year when fuel was "half-a-buck cheaper" at gas stations.