Biz Leaders to D.C.: It's Time to Compromise
An influential bloc of CEOs is telling Congress and the White House that they will have to stomach politically uncomfortable compromises to avoid falling from the fiscal cliff.
In other words, the business community has walked up to the edge of the fiscal cliff and its knees have gone wobbly. Executives want to know that Washington can get a deal done.
So, today, the Business Roundtable circulated a letter signed by more than 150 executives to congressional leaders and President Obama calling on them to "turn political swords into governing plowshares."
The letter sanctions higher tax rates, which are anathema to congressional Republicans who oppose raising revenues that way, but they may still be pressured to vote for such a plan. The letter also calls on the White House to consider entitlement reform, which Republicans favor but Democrats disdain.
"Compromise will require congress to agree on more revenue--whether by increasing rates, eliminating deductions, or some combination thereof--and the administration to agree to larger, meaningful structural and benefit entitlement reforms and spending reductions that are a fiscally responsible multiple of increased revenues," the executives wrote.
Some Republicans are disagreeing with the suggestion that lawmakers should consider raising rates. In a direct response to the letter, Ways and Means Committee Chairman Dave Camp rejected higher rates.
"Big business may support raising tax rates on small businesses, but I do not. The solution to the fiscal cliff isn't higher tax rates, which economists agree will destroy hundreds of thousands of jobs for middle-class families," Camp said in a statement.
Read the letter below:
As CEOs of companies representing more than $7.3 trillion in annual revenues and more than 16 million employees, we write to express our belief that the United States will suffer significant negative economic, employment, and social consequences for going over the fiscal cliff. In many cases the damage will be long-lasting, if not permanent. But it does not have to happen.
We urge you to step forward and demonstrate that principled compromise is once again possible and that the American political system that underpinned the economic success of our nation and others can function as designed. For far too long, political paralysis has fueled global uncertainty that discourages businesses from investing and hiring new workers. This paralysis must come to an end, and in a way that resists the temptation to declare winners and losers.
We pledge our active support for a compromise that includes comprehensive and meaningful tax and entitlement reforms that result in market-credible spending reductions and revenue growth. The deal should be a balanced solution to the fiscal cliff and long-term deficit and debt issues. To address these challenges with the scale of response required, no options should be precluded from a potential solution.
Compromise will require congress to agree on more revenue--whether by increasing rates, eliminating deductions, or some combination thereof--and the administration to agree to larger, meaningful structural and benefit entitlement reforms and spending reductions that are a fiscally responsible multiple of increased revenues. By initiating these reforms simultaneously, and without undermining the broader reforms both parties believe should be pursued, you can rebuild the trust needed for our political system to function and the confidence needed for businesses to invest in new factories, equipment, and employees.
For most of our careers, the American system of governance earned global respect and emulation. Politicians put aside partisan rancor and ideological purity to deal with major challenges. This was a significant asset for the country, a source of confidence with respect to investment, trade, and commerce.
This hard won asset has been tarnished over time, albeit unintentionally.
You now have an opportunity to turn political swords into governing plowshares. This opportunity must not be squandered. The U.S. economy has been stalled on the road to greater prosperity. We believe it is primed for strong and sustained expansion. American businesses know how to create jobs and compete in a diverse global market. We are poised and ready to do so if the conditions for growth are set in a comprehensive agreement on the fiscal cliff.
When all is said and done, Americans are interested in solutions. Winston Churchill once said that "Americans can be counted on to do the right thing after exhausting all other alternatives." We just need to do so before it is too late.