Eighty major company CEOs tell DC to deal with deficit now

Thank goodness! A loud voice of reason has stated the obvious. Congress, we must act now. As reported by Marcy Gordon of the Associated Press, CEOs from companies like Aetna, Dow,  Honeywell, JP Morgan Chase, Merck, Microsoft,Time Warner Cable and Verizon,e.g. have come together behind an advocacy group called “Fix the Debt”  stating we must deal with this issue while we still can as the failure to act is “dampening business hiring and investment and stifling the fragile economic recovery.”

Dave Cote, chairman and CEO of Honeywell said in a statement, “What it really comes down to is if we still have the political will to be a great country.” The CEOs said the solution requires a combination of higher taxes and reduced government spending including entitlement programs such as Medicaid and Medicare. They also seek federal investment in infrastructure and math/ science education. The group endorses the proposals of a special bipartisan commission that called for about $3 in spending cuts for every $1 in tax increases. It did not specifically reference Simpson-Bowles, but the concept to increase revenue and cut spending is similar.

Many of my fellow bloggers have been a broken record on this subject. We see the US as one of the least taxed countries in the world, ranking 32nd out of 34 countries in tax revenue/ GDP per the Paris based Organization for Economic Cooperation and Development (OECD). The OECD also shows we are 10% below the average of the tax/ GDP ratio for the 34 countries and were 5% below the average in 2000, when our budget last had a surplus. The fact eighty CEOs have said we must have tax revenue increases as well as spending cuts is supported by this OECD data.

Yet, it also flies directly in the face of Governor Romney’s 20% tax reduction proposal, the one he and Paul Ryan refuse to explain. It also flies directly in the face of the Tea Party led GOP congress and Grover Norquist’s no tax increase pledge. As I mentioned in my last post, Jeb Bush called the failure to act on the deal struck last summer by Speaker Boehner and President Obama (as it included tax increases) was voting down a “no brainer” proposal. The CEOs would agree with this assessment by the former Florida governor. I would add Obama has only discussed tax increases on the top of the house, but that is not enough. We need more tax revenue than that. At least, he is presenting a proposal that includes tax increases, to some extent, which is unlike his opponent.

I go back to Governor Romney’s assertion that “I know how to fix this.” From what I have seen and what these CEOs have stated very clearly, we would disagree with that assertion. For some reason, the American public is buying this fallacious self-testimonial. It is not ironic at the “other presidential candidates” debate, they spoke of raising taxes and cutting spending. It has to be both, otherwise, the math will not work. Instead of listening to the GOP and Governor Romney and telling the President you are not going far enough, I would listen to the CEOs, Simpson and Bowles. They seem to get it. The guy who says he does, who says I can fix this, does not appear to understand the problem, so how can we trust him to find the solution.

I hope Congress and the President will listen to these CEOs. I hope the American public does as well and understands that we cannot cut taxes and balance this budget. And, I hope people understand more fully what Governor Romney is proposing. He and Ryan cannot explain it as it won’t work.

7 thoughts on “Eighty major company CEOs tell DC to deal with deficit now

  1. I hope so too. If they are going to listen to anyone, this would be the group. But I wonder about the “math and science” education. We need to educate the whole mind, not just part of it. This smacks of training followers. Don’t get me started….

    • Thanks Hugh. I am glad they included education. I think the math and science is a point of emphasis due to a lack. I am all for well rounded education as well.

  2. …”Dave Cote, chairman and CEO of Honeywell said in a statement, “What it really comes down to is if we still have the political will to be a great country.”…

    I think the answer is no. And why would companies like Aetna, Dow, Honeywell, JP Morgan Chase, Merck, Microsoft,Time Warner Cable and Verizon care? They are multinational non-breathers whose sole goal is profit and market share. If anything these corporate giants are the problem rather than the solution. They call for… “reduced government spending including entitlement programs such as Medicaid and Medicare”.. but increased spending on “infrastructure and science & math education”. So, they are for more squeezing the last drop out of an overpopulated, polluted planet while spending less on suffering children and adults. Great plan.

    You know what I would like to read? I would like to read their definition of a “Great Country”. Why do I get the feeling that it has nothing at all to do with human happiness?

  3. I believe the point of the article about the 80 CEO’s is one that should embarrass the likes of Mittens Romney, the RepubliCANT congress, and Grover Norquist. These are the guys who are actually sitting behind the desks today and running companies on an on-going basis. Not guys who made their millions taking companies apart, not politicians who’s pockets are cash lined by lobbyists, and not pompous, wind-bag lobbyists who’ve never run a business in their lives.

    Having said that, Mrs. Neutron has a wonderful point. Corporations today are global, and couldn’t care less about the individual beyond what they might contribute as customers. Proof? These hypocritical CEO’s, making millions in salary and bonuses, while happily cutting jobs and freezing wages of their employees. Their self-serving messages come from speaking out of both sides of their greedy faces. On the one hand, this country cannot continue on the path of deficits of cuts to education that we are on. The government needs to fix this. On the other hand, don’t look to business to help out with the problem by providing jobs, living wages, health care or other benefits.

    • Barney and Mrs. Neutron, great comments and thanks for reading. I was away visiting one of my son’s at college, so I did not see your responses until today. I took away three major thrusts from the 80 CEOs banding together. I do like Mrs. N’s search for the elusive definition of what constitutes a great country, as we may have a totally different one from business leaders and extreme conservatives and liberals (and likely from each other as we all possess unique perspectives). The three thrusts are: 1) we have to do something about the deficit and debt, 2) we must include revenue increases which one party has off the table and actually wants to cut, and 3) we do need spending cuts. Mrs. N’s point about the global customer base is a good one as companies need people to buy their products and the market is bigger than just the US. Yet, we are still a huge chunk of buying power, so as we evolve more to a two class economic society, the ability for people to buy here is lessened. And, that is a problem. In my view, we need a scalpel not an axe to cut. One of the things I mentioned in my last post on “The Rich and the Rest of Us…” is the comment that 70% of food stamp recipients are white. There is an element of racism that exist in some members of the GOP and it is not quieted by the more reasonable parts of the party, so I wonder if this statistic if it were more known, would impact those who want to cut, cut, cut. I have found people like cutting something until they realize we are talking about your benefits. Great discussion. Thanks for following. BTG

  4. I have come to the conclusion that it’s better to buy MUCH less and have as little to do with corporations as possible. Even if you do it as a game. My wife and I are playing that game.

    I’m far more concerned with having a good time with whatever time I have left. Don’t care about the deficit or the debt, the stock market or the price of gas. I have pretty much excepted the decline of American civilization and already moved on. I don’t see the middle class as having much of a future. Who needs them? History shows us that the rich did just peachy before there was a middle class. I bet they are thinking they could do just fine again.

    Sometimes I ask myself….. “What do we deserve?” The answer I come up with is nothing. Since half the voters in America are female and one party, of a two party system, believes that females shouldn’t be paid as much, or have the same rights as males, one would expect NO females to vote for that party and against their own interests. The fact that they DO means that, as a culture, we are screwy and will no doubt end up the same way other screwy cultures did. You know, like Easter Island and the Cargo Cults of the South Pacific. Perhaps we have become SO dysfunctional that we deserve to fall apart.

    • I am in full agreement on buying less. We mistake wants for needs. America flourished with a vibrant middle class and we need to try and return to some of that. We may never get there, but we need to avoid two economic classes. Not every one wants a Lexus, but they would like to live a decent life. There is a great NY Times article this Sunday, that at some point the rich will realize they need that middle class and infrastructure and are not getting the ROI on the funding of politicians. I think we are a long way off from that, but it was an interesting piece. Thanks for your thoughts. Best regards, BTG

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