Businesses large and small have much at stake in the debate over the so-called fiscal cliff and are organizing advertising and lobbying efforts in a bid to prevent the Obama administration and Congress from further damaging the U.S. economy.
Through radio ads, email campaigns and outreach to lawmakers, the business community is warning that the economy will suffer if there isn’t compromise on tax cuts that are about to expire and automatic reductions in federal spending that’ll occur absent a budget deal.
A high-profile group of CEOs will make their case face to face Wednesday, meeting at the White House with President Barack Obama. Among those attending: the heads of Chevron, Ford, General Electric and Wal-Mart.
The nonpartisan Congressional Budget Office said last week that failure to address most components of the fiscal cliff could send the unemployment rate from its current 7.9 percent to 9.1 percent or higher. And, the CBO warned, a recession would be likely next year.
“Is that what America voted for last Tuesday . . . recession and a return to 9.1 percent unemployment? I don’t think so,” said Thomas J. Donohue, the head of the influential U.S. Chamber of Commerce.
The chamber has clashed repeatedly with Obama, and it isn’t among the business leaders from whom the president is soliciting advice. “We have not been contacted by the White House,” Donohue confirmed in a news conference Tuesday with journalists at the chamber’s headquarters.
That hasn’t stopped Donohue and colleagues, whose membership includes more than 300,000 businesses, from weighing in on the pending fiscal cliff. The chamber supports the Fix the Debt campaign, a partnership between the private sector and budget watchdog organizations.
Spearheaded by the Committee for a Responsible Federal Budget, campaign organizers said Tuesday that they’d already collected more than 300,000 signatures calling on Congress to get debt and deficits under control. The Fix the Debt campaign touts a CEO Council, including signatures of support that range from the heads of Boeing, GE and Dow Chemical Co. to banking moguls Jamie Dimon of JPMorgan Chase and Brian Moynihan of Bank of America Corp.
Small business also is onboard the campaign.
“The growing debt and lawmakers’ failure to address it is adding to the growing insecurity many small businesses feel,” Todd McCracken, the head of the National Small Business Association, said Monday in a statement announcing its support for the Fix the Debt campaign.
Other business lobbies have joined the fray. The Financial Services Roundtable, the powerful lobby for Wall Street financiers, circulated a memo in Washington last Friday titled “Post Election: It’s Time to Bridge the Fiscal Cliff.”
“Even now, uncertainty about the fiscal cliff is negatively impacting the economy. Economists from member companies … have reported a negative drag on business lending, hiring, spending and investment,” the group warned. “These forces will accumulate until the fiscal cliff is addressed.”
The Business Roundtable, a trade association for CEOs of major corporations, began running radio ads in the nation’s capital Tuesday for the “It’s Time to Act” campaign. The ad features calls for action from 13 CEOs. The group also published an ad in The Wall Street Journal.
“The CEOs believe that at a minimum Congress should extend expired and expiring tax provisions until comprehensive tax reform can be enacted, prevent automatic spending cuts through sequestration, address the debt ceiling and approve permanent normal trade relations with Russia,” the Business Roundtable said in a statement.
The last item is telling. Trade relations with Russia haven’t been an issue tied to debt and deficits, but it’s indicative of what’s in store in the weeks and probably months ahead. If Congress and the Obama administration decide on negotiations for a comprehensive overhaul of the tax code and a reworking of the financing for Social Security and Medicare, all sorts of businesses will be seeking to protect their parochial tax interests.
Several defense contractors already have announced that they’re scaling back hiring plans pending resolution of fiscal-cliff negotiations, and financial markets have been sliding over the past week on concerns about Washington dysfunction.
With Europe mired in a debt crisis and big emerging markets such as China and Brazil slowing, a tax and budget deal could boost American competitiveness versus the rest of the world., business leaders say.
“If we get this right, this is a huge deal for this country,” said Bruce Josten, the U.S. Chamber of Commerce’s chief lobbyist.