Busi­ness lead­ers beg for ac­tion on com­ing fis­cal cri­sis

The Washington Times Weekly - - Politics - BY TIM DE­VANEY

KEELY BRAZIL With elec­tion-year pol­i­tics in the rearview mir­ror, the busi­ness community on Nov. 7 called for a “cease-fire” be­tween the White House and a di­vided Congress, in hopes that lead­ers of both par­ties will come to­gether to deal with the so-called “fis­cal cliff” be­fore it’s too late.

Busi­ness lead­ers say strik­ing a deal be­fore year’s end would give them the cer­tainty needed to in­crease hir­ing, but not do­ing so would slow growth and po­ten­tially send the econ­omy into an­other re­ces­sion.

“For the pres­i­dent, I think he can look for­ward to go­ing out on a pretty high note, if he can get this done,” Busi­ness Roundtable CEO John En­gler told re­porters. “We be­lieve strongly that with the elec­tion be­hind us, it’s time to roll up our sleeves and go back to work. We need to get busy right away and get this fis­cal cliff re­solved.”

The “fis­cal cliff” refers to a dou­ble-whammy of huge spend­ing-cut se­questers un­der an an­tid­eficit deal and the ex­pi­ra­tion of the Ge­orge W. Bush-era tax cuts, both of which are set to hap­pen au­to­mat­i­cally at the start of Jan­uary. All sides in Wash­ing­ton agree it needs to be avoided, but the Obama ad­min­is­tra­tion and Se­nate Democrats can’t agree with House Republicans about how ex­actly to do that.

This stale­mate has led to un­cer­tainty in the busi­ness community. Jay Tim­mons, pres­i­dent and CEO of the Na­tional As­so­ci­a­tion of Man­u­fac­tur­ers, warned that if the fis­cal cliff is not re­solved, the econ­omy would lose 12.8 per­cent growth of gross do­mes­tic prod­uct and nearly 6 mil­lion jobs by 2015.

“I don’t think there’s any­thing more ur­gent than the fis­cal cri­sis,” he said.

Mr. En­gler called for Congress to put aside its dif­fer­ences, with House Republicans re­al­iz­ing they’re now the “mi­nor­ity in Congress” and be­come will­ing to dis­cuss a rea­son­able deal, and the Obama ad­min­is­tra­tion tak­ing a “Bill Clin­ton-like” ap­proach of com­pro­mise to the ne­go­ti­at­ing ta­ble.

“House Republicans are in a po­si­tion where they’re go­ing to have to re­spond to the ini­tia­tives com­ing from the pres­i­dent,” Mr. En­gler said. “You get to have some say, but you’re not in charge of the whole gov­ern­ment. You can’t sit back and say, ‘It’s my way or the high­way.’ ”

On the other side, the AFL-CIO took credit for sev­eral of Pres­i­dent Obama’s key vic­to­ries in such bat­tle­ground states as Ohio, Wis­con­sin and Ne­vada and re­jected sep­a­rate cuts to So­cial Se­cu­rity, Medi­care and Med­i­caid, call­ing for higher taxes on the wealthy in­stead.

“We did de­liver those states, we did do a good job in those states, and I think with­out the ef­forts of or­ga­nized la­bor, those three states would have been dif­fer­ent,” AFL-CIO Pres­i­dent Richard Trumka told re­porters. “None of the three would have been in the pres­i­dent’s col­umn.”

The AFL-CIO said it used more than 65,000 vol­un­teers, who were re­spon­si­ble for the pres­i­dent’s re-elec­tion.

Ac­cord­ing to elec­tion night polling from the AFL-CIO, 65 per­cent of union mem­bers voted for Mr. Obama. In Ohio, he re­ceived 70 per­cent of the union vote — a con­stituency Mr. Trumka de­scribed as “83 per­cent white, 40 per­cent evangelical and 53 per­cent gun own­ers.”

Af­ter the vic­tory, Mr. Trumka called for higher taxes on the top 2 per­cent of Amer­i­cans and more spend­ing on man­u­fac­tur­ing and ed­u­ca­tion.

But busi­ness lead­ers com­plained that they al­ready face high tax rates. Mr. Tim­mons said it is 20 per­cent more ex­pen­sive to man­u­fac­ture in the U.S. than else­where, largely be­cause of high taxes and reg­u­la­tions.

“We haven’t al­ways had the high­est rates,” he said. “What’s hap­pen­ing is other coun­tries are get­ting smart and their re­duc­ing their taxes, be­cause they know that’s the way to at­tract in­vest­ment.”

Busi­ness lead­ers also called on Mr. Obama to re­con­sider some of the reg­u­la­tions his ad­min­is­tra­tion has levied, which they said makes it hard to com­pete. They have long com­plained about heavy-handed reg­u­la­tions, and with the pres­i­dent be­ing re-elected this con­cern also has con­trib­uted to a de­gree of un­cer­tainty.

“I think the pres­i­dent was elected on a pledge to grow the econ­omy and cre­ate jobs,” Mr. Tim­mons said. “There are a lot of reg­u­la­tions that are pend­ing right now that could have a sig­nif­i­cant fi­nan­cial im­pact on man­u­fac­tur­ers, and ul­ti­mately, im­pede their abil­ity to in­vest. My hope would be that the ad­min­is­tra­tion takes a fresh look at all of these reg­u­la­tions.”

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