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.