Up to now, the corporate executives behind “Fix the Debt” have been reluctant to take on their own business lobby, at least in public, downplaying these differences. They also have not made it clear to business organizations such as the Chamber or NAM, to which they pay significant dues, that their continued participation is contingent on getting behind a grand bargain that balances spending cuts with tax increases. Without such a strong and unified push from business, the Republican right will remain intransigent and no deal will be struck.
Part of the challenge confronting the corporate chief executives is that they are being subtly undercut here in Washington by their own lobbyists, whose primary focus remains on preserving existing tax breaks, winning new subsidies and reducing the impact of new laws and regulations. Their personal success depends not on whether the nation’s long-term fiscal problem is fixed but whether they are successful in protecting the narrow short-term interests of their companies. And that is not easily accomplished by jeopardizing long-standing relationships with allies in Washington or Republicans on Capitol Hill.
Steven Pearlstein is a Pulitzer Prize-winning business and economics columnist at The Washington Post.
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I don’t mean to suggest that the only thing standing in the way of a budget deal is the intransigence of Republicans and their enablers in the business community. Right now, any bipartisan compromise will involve sizable cuts to Social Security, Medicare or Medicaid that would be unacceptable to Democratic leaders of the House and Senate, along with sizable contingents in their caucuses. Only President Obama has the incentive, the instinct and the freedom to negotiate such entitlement cuts and only he has the political standing to get a sufficient number of Democrats to follow.
How might he negotiate such a deal? Surely not by inviting leaders of both houses and both parties for a meeting at the White House, as is scheduled for next week. Not only will nothing be accomplished, but also to the degree that it results in a replay of the usual posturing, such a meeting will be detrimental.
The negotiations that need to happen are between the president and Republicans leaders in Congress. That means Speaker John Boehner and Senate Republican leader Mitch McConnell, both of whom are practical pols who enjoy deep respect in their caucuses. It also means Paul Ryan, who knows budget issues cold, is now a national figure and can lend legitimacy to any deal in the eyes of die-hard conservatives. For his part, the president should bring along his chief of staff and top budget expert, Jack Lew, along with Bruce Reed, the vice president’s chief of staff who headed up the Simpson-Bowles commission staff.
This small crew should meet privately at different locations at least three times a week between now and the end of the year. The early emphasis should be on building mutual trust and personal relationships, the missing ingredients in the failed negotiations last summer between the president and Boehner. They should agree that nothing is decided until everything is decided, and to say nothing in public until a deal has been struck, even as they consult privately with key allies. Their aim should be to lay a budget resolution before the new Congress when it convenes Jan. 2, with final votes prior to the inauguration.
The process won’t be pretty, the final votes will be close. If it succeeds — and I think it will — one factor will be the strong support from a business community that finally comes to understand that what’s good for America is also good for business — and not the other way around.