The incoming president of The Business Roundtable, which was once President Obama’s strongest ally in the private sector, said Monday that much of the group’s work on health care over the next two years will be looking for how Obama’s health care overhaul might “threaten” the ability of employers to continue providing insurance.
“The health care reform bill that passed, there’s mounting evidence that it doesn’t deal with the cost of health care,” said John Engler, who will take the reins of the 170-member BRT in mid-January, following the departure in September of previous president John Castellani, who moved to become head of the Pharmaceutical Research and Manufacturers of America.
Engler, who was the Republican governor of Michigan from 1991 to 2003 and is now the head of the National Association of Manufacturers, spoke to The Daily Caller by phone Monday.
“Virtually every company that’s a member [of the BRT] already provides health insurance. And those companies are proud of that fact, proud of the quality of the benefits they provide, and want to be able to afford to continue to provide them,” Engler said. “So there’s going to be keen eye looking out for, ‘What are you telling me are the changes and what do they mean in terms of what are the cost obligations of those changes, and how do they threaten what I’ve been doing?’”
Engler, who has denied that his move to the BRT signals a more confrontational approach toward the White House, said the BRT will be “actively engaged in the health care debate. He did not take a position when asked whether Obama’s health care overhaul should be repealed.
“I don’t think there’s anybody who believes that President Obama – while there was a bipartisan deal on taxes and now there’s bipartisan work being done on trade – is going to sign the repeal,” he said. “It’s not going to be signed in the next two years. That means our focus on what’s happening at [Health and Human Services] and literally dozens of other regulatory hot spots that are out there is going to be real important.
“We’re going to pay attention.”
As for the president himself, Engler said Obama appears to be changing his approach toward the business community and on the best way to spur economic growth.
“You build on the December bipartisan tax agreement, the Korean trade agreement, the deferral of some of these really expensive and onerous regulations and say that there are some signs that there is going to be a lot more cooperation,” Engler said.
When Engler was named to the post last week, he said “one of the first people to call” him was Valerie Jarrett, a close personal friend of Obama’s and one of his top advisers in the White House.
“I think there’s a recognition that if we’re going to get this 9.8 percent unemployment rate down, we’re going to have to work together, not just have a conversation and either talk past each other or just have talks, but really think about the specific things we need to do,” he said.
The tax deal, Engle said, “is a good start,” but added that a two-year extension of tax rates and of certain tax deductions and exemptions is not long-term enough to get large-scale investment that he and many other free market economists say would create explosive growth.
“On the one hand, there’s got to be greater demand. At the same time, there has to be also greater certainty,” he said. “The CEOs of The Business Roundtable, when they’re making billion dollar, half billion dollar investment decisions, one or two years of certainty isn’t nearly enough.”
BRT chairman and Verizon CEO Ivan Seidenberg – whose speech last summer criticizing Obama’s policies for creating uncertainty was a public and dramatic break between the BRT and the White House – has called Obama’s work on the trade deal and the tax deal “extraordinary.”
Engler said that if the U.S. wants to recruit more investment from abroad, “you’ve got to fix your corporate tax rates.”
“We’ve just fallen further behind, not because necessarily we’ve been raising tax rates so high in this country. It’s because everyone’s figured out that the lower tax rates make them more attractive as an investment location,” he said.
The U.S. corporate rate of 39.2 percent became the highest in the world this month, after Japan announced a five-point cut in their rate of 39.5 percent.
The president’s deficit commission endorsed the idea of lowering the corporate rate as part of a broader tax reform effort that would reduce or eliminate tax loopholes and deductions, increasing the number of people and entities paying into the system by simplifying the code. Such a move would conceivably allow the government to drastically cut income and corporate tax rates.
But Engler expressed some caution about the growing talk of tax reform, hinting at conservative fears that such a debate becomes a vehicle for work on increasing taxes.
“There is a concern about how all this gets put together,” Engler said.
“You may need to have some spending reforms on the entitlement issues that are out there happening concurrently with your changes on revenue,” he said. “If you’re trying to bring spending and taxing into balance, you can’t just work on the taxing side. You’ve also got to be paying attention to the spending.”
Engler also said that double taxation of revenues – where businesses must pay foreign corporate rates and then U.S. corporate tax as well – must end.
He said that roughly $800 to $900 billion of the nearly $2 trillion in private capital that is currently not being used by businesses — because of uncertainty largely attributed to Obama’s policies — is off shore and might be brought back to the U.S. and spent on expansion if the double taxation was ended.
