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.
Initiatives like this highlight the importance of focusing on solutions rather than party bickering. It makes sense that business leaders are better equipped for this task. Unlike today’s political leaders, businessmen and women have to compromise in order to survive in the marketplace. That’s why many business leaders, including me, supported the creation of the No Labels movement, which puts the national interest over party loyalty. Focusing on policies instead of parties will help prevent our nation from spiraling downward into more unsustainable entitlements and even larger debt.
Our economy is in trouble and compromise is needed for entrepreneurs and business leaders to create growth. With the national debt exceeding $16 trillion and new business regulations coming out at a rate of 68 per day, uncertainty is making job creation and innovation impossible. Business leaders must continue to press elected officials to engage in an active, bipartisan debate to solve our nation’s problems.
President Obama wants results. He can get them by welcoming voluntary action and compromise. If he fails to reach across the aisle and come to an agreement, our economy will tumble over the cliff, exposing all Americans to hardship. For the sake of our children and future generations, business leaders must continue leading the call for compromise.
Gary Shapiro is president and CEO of the Consumer Electronics Association (CEA)®, the U.S. trade association representing more than 2,000 consumer electronics companies, and a New York Times best-selling author. His views are his own. Shapiro’s latest book, Ninja Innovation: The Ten Killer Strategies of the World’s Most Successful Businesses, will be released in January. Connect with him on Twitter: @GaryShapiro.