Coalition of businesses and politicians aims to pressure Congress on deficit reduction
The Colorado Statesman
A coalition of Colorado business leaders and politicians have joined a national campaign asking Congress to put aside its partisan differences and work on long-term solutions for solving the nation’s ballooning deficit and looming so-called “fiscal cliff.”
The Campaign to Fix the Debt launched last Thursday in Colorado after a similar effort on the national level brought together chief executives of more than 80 U.S. corporations — including Goldman Sachs, Cisco Systems and Boeing — to pressure Congress to reach a deficit reduction deal by the end of the year. If Congress cannot do it in less than three months, it will automatically trigger what is being described as “draconian” spending cuts and tax increases.
Congress reconvenes after the election.
The campaign has already raised more than $37 million to support its efforts, which will include digital, print and TV ads. The Colorado chapter is being led by former state Senate Majority Leader Norma Anderson, a Republican, and former Gov. Dick Lamm, a Democrat. Heading up the steering committee for the business community is John Brackney, president and chief executive of the South Metro Denver Chamber of Commerce.
The gridlock in Washington, D.C. comes down to two fundamental differences on how to control the nation’s out-of-control deficit, which will top $1 trillion this year for a fourth straight year, pushing the national debt past $16 trillion. Democrats say the deficit cannot be fixed without revenue enhancements, including marginal tax rate increases on the wealthiest Americans. Republicans have for the most part adopted the philosophy of Grover Norquist and the conservative Americans for Tax Reform, which calls for spending cuts and entitlement reform, rather than tax hikes.
But the Campaign to Fix the Debt appears to be open to a balanced solution that includes “bold and fair” proposals that draw from the ideologies of both parties. The group believes that recommendations from the bipartisan Simpson-Bowles Commission provided the framework for moving forward with a harmonious fiscal plan. The proposal included such options as trimming tax rates, slashing tax deductions and making spending cuts that equal about $3 in spending cuts for every $1 of tax increases.
“If you think back — I served in the legislative body for 19 years — I worked with Democrats and I worked with Republicans, and not all Republicans agreed, and not all Democrats agreed. But we got work done, and that was sitting down and talking, and everybody gives a little,” said Anderson. “If enough pressure is put on Congress, it can get done — that’s what we’re all about.”
Lamm agreed, stating, “That’s what we’re about, to try to put enough pressure on the fact that it’s unthinkable not to come to a compromise… We’ve got to try. I’m not fooling myself; I’m not saying this is not uphill all the way. But I feel that we’re heading toward a real fiscal catastrophe, and I want my kids to know that I tried.”
Politics as usual
Even though the campaign is being billed as nonpartisan, politics immediately came into play as Colorado political leaders discussed how to get Congress to the table. Lamm pointed to an unwillingness by Republicans to compromise on the tax issue, suggesting that many are being held at the mercy of Norquist, who has gotten the vast majority of House and Senate Republicans to sign the “Taxpayer Protection Pledge” promising to oppose any and all efforts to increase the marginal income tax rate.
“You’ve just got to hope that the new election will give us some more rational people, some more mature people, because this Grover Norquist problem still hangs over Washington like a dark cloud, and it’s not going to be easy,” said Lamm.
Laura Chapin — a local Democratic strategist who has been watching the Campaign to Fix the Debt unfold — also pointed to issues with the Republican Party, suggesting that there will be no fix until Republicans are willing to compromise on the tax issue. She says a so-called “grand bargain” had been reached, in which lawmakers had come to an agreement on major deficit reduction that included both tax increases and spending cuts, but that Republican leadership walked away from the table.
“It’s not the Democrats that are the problem here, the Democrats have more than indicated their willingness to come together and work on this,” said Chapin. “But you have a Republican Party that’s so beholden to the hard right wing Republicans. Democrats are more than willing to work on this, Republicans are just sticking their chin out and being unrealistic about how to solve problems.”
Dick Wadhams, a local Republican strategist and former chairman of the Colorado Republican Party, disagrees. He blames Democrats for using the issue to “viciously” attack Republican presidential challenger Mitt Romney and his running mate, U.S. Rep. Paul Ryan of Wisconsin, while scoring points for President Barack Obama.
Obama added fuel to the fiscal cliff fire in the last presidential debate when he said sequestration “will not happen.” Sequestration is the budgetary measure that on Jan. 2 will automatically cut $1.2 trillion over 10 years, nearly half of which comes from defense accounts. Republicans say that with his comment, Obama has given away leverage in any budgetary discussion. Defense cuts are a significant sticking point for Republicans, which could force an agreement on a deal that raises taxes.
But Wadhams says the problem is not forcing Republicans to compromise. He says the issue is with Democrats and their unwillingness to reform the nation’s entitlement programs.
“I’m amused that that would be the response from Democrats since their own congressional leadership and their president is just burying their heads in the sand regarding entitlement,” said Wadhams. “The fact is that the fiscal cliff cannot be dealt with without dealing with entitlements.”
Also adding to the drama is a “lame duck” session of Congress after the election, in which many members of Congress will be approaching the end of their tenure. Anderson and Lamm disagree over whether this will intensify the difficulty of reaching a compromise.
Anderson says that in her experience, it is possible to accomplish significant policy issues during a lame duck session: “I worked as a lame duck… and got things done… I think this is a big enough of a problem that [lawmakers] won’t want to go home and face their next door neighbor if they don’t get something done.”
Lamm, however, says the lame duck session will only complicate matters: “It obviously hurts… But we are trying to show that there’s a lot of people who care about the debt and deficit; that the hour is late, the issue is important, and we’re doing our best.”
Imperative for business community
Brackney says that for the business community, Congress had better show its best effort or else there could be a ripple effect that causes direct damage to businesses and collateral damage to the entire nation.
Economic data has already indicated that business investment stalled in September, a sign that if there is no fix to the deficit issue, then the nation could be headed back into another recession, or even worse, a depression.
Going over the cliff could result in a sharp drop in stocks, as well as a downgrading of the nation’s credit rating. And a recent report by the National Association of Manufacturers suggests that nearly 6 million jobs could be lost, causing the unemployment rate to skyrocket, if Congress doesn’t act.
For all these reasons, Brackney has joined the effort to pressure Congress to reach a deal. “In the business world, generally you don’t just lay off your employees because you don’t have enough money to spend on payroll. We realize that’s a longer term problem… and so just to have a draconian sequestration … we don’t do that in the business world.”
“What we’re looking for is a long-term solution,” he continued. “Not just a short-term political answer that is generally made to make the other side look bad.”
Colorado congressional delegation reacts
Colorado’s two U.S. senators, Mark Udall and Michael Bennet, both Democrats, say they are willing to come to the table.
“One of the most important things we can do in Washington is reach a comprehensive, balanced fiscal ‘grand bargain,’” Udall said in a statement. “This is one of the most serious issues facing Congress, and the stakes are too high not to act.”
Bennet agreed, and in a statement added, “In my town hall meetings across the state, Coloradans have told me they want a plan that materially reduces the deficit, shows that we’re all in it together and is bipartisan.”