Correction to This Article
This article about a labor leader and a chief executive working together on a plan to reduce the federal budget deficit inaccurately represented, because of a punctuation error, one idea for bolstering Social Security. The article said the idea was "to have state employees, who currently do not contribute to Social Security, join into the program." It should have said that the idea was "to have state employees who currently do not contribute to Social Security join into the program." Many state employees already contribute.

Labor leader, chief executive team up to reduce the U.S. deficit

(Andrew Harrer/bloomberg)
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By Edmund L. Andrews and Eric Pianin
The Fiscal Times
Sunday, June 20, 2010

Andrews and Pianin work for The Fiscal Times, an independent news organization that specializes in fiscal and economic matters. It is funded by Peter G. Peterson, who separately supports groups that advocate for long-term debt reduction.

Until two months ago, Andy Stern and David Cote seemed to embody the Beltway view that the bipartisan commission President Obama created to tackle the nation's budget deficit was doomed to fail.

They seemed an unlikely duo, after all: Stern was the firebrand labor leader who had channeled millions of dollars into Democratic election campaigns. Cote was a Fortune 500 chief executive, and a Republican, who made more than $12 million last year.

Today, though, they have teamed up and are working closely together toward what they hope will be a politically viable, long-term plan for reducing the deficit, which last year totaled $1.4 trillion. They talk and e-mail at least once a week, swapping ideas and information. They sit together at commission meetings and arranged a field trip for a tutorial with experts on the tax code. Cote tries to soften his peers on the Business Roundtable. Stern is pressing union officials about ways to tinker with Social Security.

Both men know the odds are long, given the pitched power struggles in Congress, the lack of consensus on ideas and even the premise that the deficit needs addressing now.

Twelve of the panel's 18 members are lawmakers, six from each party, and both parties are fixated on the upcoming midterm elections. But Stern and Cote insist that they have a chance, and both have a history of political bridge-building. In pushing for health-care reform, Stern formed alliances with business lobbying groups and even teamed up with Wal-Mart Stores -- a longtime foe of organized labor.

Now Stern argues that deficit reduction isn't simply a conservative issue. "What I keep saying to the progressive community is that when the crisis hits, it's students, workers and poor people who pay the price," said Stern, who recently stepped down as president of the Service Employees International Union, the nation's fastest-growing labor union.

Cote, chairman and chief executive of Honeywell International, a global technology company, is proselytizing among his own corporate fellow travelers. "Even in the business community," he says, "there is little understanding of the magnitude of the looming problem.''

In a bid to promote more trust among members, Cote and Stern even invited the others to an informal dinner last Tuesday at Honeywell's D.C. office. Erskine B. Bowles, the commission chairman and onetime aide to former President Bill Clinton, said it was hard to exaggerate the importance of such gestures.

"When you spend time with people, they can no longer be caricatures," Bowles said. "You talk about your personal lives, family stuff, and you build trust. When you form a bond like that, you seem to find ways of bridging differences, and I think that's what those two guys have done."

Cote and Stern describe themselves as pragmatists who grappled with hard choices while running large organizations.

"Running a company, you learn that the needs always exceed the resources," said Cote, a former top executive at General Electric. "There's only so much you can do, and you gotta pick the places you're going to work on."


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