The fiscal cliff is looming, and many of us are looking to our elected officials for answers. While Washington’s action is required to address the combination of tax increases and spending cuts expected to hit in the new year, we need to look elsewhere for real leadership.
Rampant partisanship has crippled Washington. Both parties have dug in their heels, thinking their stubbornness shows leadership. It has become virtually impossible for political leaders to come to the kind of compromise necessary to address our economic woes.
Democrats refuse to rein in entitlement programs, preferring to raise taxes on the so-called “wealthy” rather than make the tough choices to cut unsustainable spending. President Obama’s policy has always been to let the Bush tax cuts expire for those who make more than $250,000 a year. He argues that the extra money from the highest earners will prevent him from having to cut government services and programs. In truth, there aren’t enough rich people to pay for all these programs.
Republicans want the tax cuts to remain in place for all Americans, fearful of a Tea Party reprisal if they are perceived as even thinking about a tax increase. They argue that an increase in taxes will hinder economic growth. While they seem more ready to enact spending cuts, Republicans won’t touch sacred cows like defense spending.
Business leaders concerned about a hostile regulatory environment, unpredictable taxes, new burdens and an economy weakened by government are faced with two bad choices when they look at Washington. It’s time for businesses to stop following and start leading. Business owners, the ones most directly affected by government’s dysfunction, have to propose solutions, even if it means sacrifice. And they need to pressure political foot-draggers to act for the public good.
Some are already stepping up to the plate. Recently, 80 corporate CEOs supported a deficit reduction proposal that played off the bipartisan Simpson-Bowles Commission proposal organized by Republican Alan Simpson and Democrat Erskine Bowles. The original plan, projected to cut $3.8 trillion from the federal deficit, would have lowered individual and corporate income taxes while raising others and closing loopholes, and would have reduced Social Security, Medicare and discretionary spending. Some proponents of the plan on Wall Street said that the economy would have boomed if Congress had approved it.
Recently, business leaders convened with President Obama in Washington to voice their concerns and offer advice. CEOs are even launching ad campaigns designed to influence members of Congress to come to a bipartisan agreement quickly and resolve the fiscal cliff crisis.