On Thursday morning, more than 80 executives of leading American corporations signed a statement calling for a deficit reduction compromise that would “include comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises revenues and reduces the deficit.”
Several members of the group, which includes highly paid chief executives of financial and industrial corporations who will stand to pay more if President Obama succeeds in his effort to raise taxes on the wealthy, then helped ring the opening bell at the New York Stock Exchange to draw attention to their coalition, Fix the Debt. The group has raised $37 million for a nationwide education and lobbying effort.
Alarmed last year by Washington’s brinkmanship over raising the nation’s debt ceiling, these executives are now mobilizing to avert another such crisis at the turn of the year. After the November elections, they plan to press the two parties to compromise on a long-term substitute for the “fiscal cliff” — the immediate across-the-board spending cuts and tax increases that would affect nearly all Americans on Jan. 1, potentially sending the economy back into recession.
The business leaders’ goal contrasts with the campaign messages of both parties. While the executives seem to answer Mr. Obama’s call for “economic patriotism” by their tentative embrace of higher personal taxes, in interviews many of them have rejected his “pay your fair share” talk as class warfare, and a good number oppose his re-election.
But the business leaders’ position also contradicts the stand of Mitt Romney and other Republicans, who say that all tax increases are “job killers,” that the federal budget can be balanced with spending cuts alone and that any overhaul of the tax code should be “revenue neutral,” neither raising nor lowering the government’s total tax collection.
“To say that you can solve this without increases in taxes is ludicrous,” said David M. Cote, the chief executive of Honeywell, a Republican and a member of Mr. Obama’s Bowles-Simpson fiscal commission in 2010. “Most wealthy people get it. They just don’t want to be put in the position, though, where you pay more in the taxes and the profligate spending continues.”
The Wall Street event on Thursday was just the latest, if the highest profile, of near daily developments in recent weeks in which prominent figures have stepped out of corporate suites to back a deal that would generate more revenue and, by implication, raise taxes on themselves. They support those moves if they are part of a bipartisan compromise that also reduces the long-term costs of entitlement programs, chiefly Medicare and Medicaid, that are the biggest factors driving projections of unsustainable federal debt.
Lloyd C. Blankfein, the chief executive of Goldman Sachs, who is a Democrat, said, “The people, including myself, who are willing to give more revenue don’t want to take on the moral hazard” of sending more money to Washington unless the White House and Congress “deal with the pressing need to cut the budget.”
On Monday, Jamie Dimon of JPMorgan Chase hosted a Wall Street lunch for about 75 other chief executives to hear from budget experts, including Senator Mark Warner of Virginia, a Democrat, and Senator Lamar Alexander of Tennessee, a Republican, about what the business leaders could do to promote a bipartisan deal. How, for example, could they persuade Republicans to drop their antitax position?
Business leaders “think it’s just really important that we fix this,” said Mr. Dimon, an early backer of Mr. Obama whose relationship with him later frayed. “They’re not into whether the tax rate for higher-paid individuals is 35 percent or 39.6 percent.” He was referring first to the top Bush-era tax rate, which high-income taxpayers now pay, and then to the Clinton-era rate, which they face after Dec. 31 if the Bush tax cuts expire as scheduled. Mr. Obama supports ending the cuts for high incomes, and Republicans oppose it.
On Tuesday, attendees at the national conference of the Securities Industry and Financial Markets Association met in New York with Mr. Warner and Senator Saxby Chambliss, Republican of Georgia. The two belong to the Senate’s bipartisan “Gang of Eight,” which has struggled for nearly two years to draft a spending and taxes deal.
“I’m talking to everybody in this room,” Mr. Chambliss told his audience. “If you like the package that we ultimately come up with, then we haven’t done our job — because everybody is going to have to ultimately pay a price in this.”
Like others who have privately lobbied lawmakers, Mr. Blankfein and Mr. Cote reject suggestions that the philosophical chasm between the parties is unbridgeable.
“There are very conservative Republicans in the House who sit there and say, ‘I would agree to a revenue increase if there was significant entitlement reform,’ ” Mr. Cote said. “And then you’ll run into Democrats who say there won’t be any entitlement reform unless there’s revenue increases. For most of us in the business community, we say: ‘It sounds to us like you’ve got a deal. You just need to sit down and flesh out the details.’ ”
That, as members of the Simpson-Bowles commission can attest, is easier said than done.
The panel’s dissenters, who opposed the majority’s recommendations of a $4 trillion, 10-year package to reduce annual deficits with a combination of spending cuts and new revenue, included all three House Republicans. Among them was Representative Paul D. Ryan of Wisconsin, the House Budget Committee chairman, who is now Mr. Romney’s vice-presidential running mate.
The Fix the Debt campaign’s inspiration is the dormant Simpson-Bowles framework, and the group’s formation is due in large measure to nonstop proselytizing of business leaders by the commission’s chairmen, Erskine B. Bowles, a businessman who was a White House chief of staff to President Bill Clinton, and Alan K. Simpson, a former Senate Republican leader from Wyoming.
According to the group’s president, Maya MacGuineas, the money raised is financing a growing staff of about 35 at a Washington “war room,” chapters in up to 35 states and ultimately, perhaps, television ads and other help for politicians — members of Congress or even the president — who would need support in taking unpopular positions on tax increases or spending cuts.
Mr. Dimon, speaking for JPMorgan Chase, said: “You know, we’re in 1,900 hamlets in America. I’d — we’d — be calling them all up, literally we’d start flying people in. It would be a whole different ballgame, I think, if we had something to support, and with the president supporting it.”
Link to the original article on The New York Times