Thomas J. Wilson is chairman and chief executive of Allstate Corp.
The Senate voted Thursday to suspend the debt limit, meaning Congress has effectively kicked down the road the threat that the United States would default on its obligations.
Consider some of the steps that preceded this move and a similar House vote last week: The American Taxpayer Relief Act, which averted the “fiscal cliff,” would have more accurately been named the Broken Promises Act. The legislation raised taxes on nearly every individual in America without fixing the long-term debt problem. Where is the relief? And the legislation was necessary because a dysfunctional political system produced in summer 2011 the Budget Control Act, which also postponed the hard choices about how the United States would deal with its obligations.
Washington’s actions keep telling the world that our country might not honor its debts, which negatively affects economic confidence and growth. Our “leaders” keep promising they will come to agreement on how to address our country’s debt addiction. Unfortunately, they continue to disappoint.
Our political system is failing for a number of reasons, some self-inflicted, some the result of macro trends. Globalization, foreign competition, technology improvements and aging populations are just some of the challenges vexing populations across the world. But businesses are coping with and adapting to many of these challenges. They can provide advice and resources to the public sector on how to do the same.
Taking a more active role in the political system requires business leaders to be more vocal, engage on a broader range of issues and support solutions that benefit the country, not just their own interests.
In Chicago we have a model that works. The Commercial Club, a group founded more than a century ago, brings business expertise to bear on issues such as education, transportation infrastructure, violent crime and government finances. For nearly a decade it has helped start charter schools that now educate more than 40,000 children. It helped determine in 2001 how to expand O’Hare Airport, one of the nation’s busiest traffic hubs. I was the business lead on a team of city, county, nonprofit and religious leaders that in October put forward a comprehensive plan to address the unacceptable murder rate of young black men in Chicago.
Last year, a group of CEOs came together to form the bipartisan organization Fix the Debt. I joined this effort because businesses were chastised for being too silent during the partisan debate on the federal debt ceiling in 2011. This group, following the prescription of the Simpson-Bowles commission, supports a balanced approach to lowering the deficit, including raising revenue, reforming entitlement programs and reducing spending. While business’s voice is louder than before, politicians are more interested in using us for media posturing than in leveraging our collective resources to help America.
If we expect to have a larger role in shaping the future, business leaders must become better citizens by supporting balanced solutions that may conflict with short-term special interests. Embracing the philosophies of equitable taxation and replenishing common goods would help our voices be heard. Equitable taxation means paying an amount of taxes that represents the value received from the public sector. Companies that pay no taxes but get free access to roads, ports, emergency response and educated employees are not good citizens. This is fundamentally unfair. Businesses also utilize common goods such as air and water without charge and should have the philosophy of making better what they get for free and use to make a profit. This is good corporate citizenship.
Businesses have the people and resources necessary to create jobs and adapt to a rapidly changing world so that our companies and country have a brighter economic future.
That brighter future begins with insisting that Congress raise the debt ceiling for several years, not four months, since developing a thoughtful plan to create jobs won’t be done by May 19. In the business world, an entity that ignored the legal obligations of a prior management team would not be tolerated. Congress should attack this problem in pieces since lawmakers have been unable to reach a grand bargain.
Next, we should call on the president to lead the country in a balanced, adult conversation about reforming entitlements with a 10-year phase-in period as the next step in the process to restore fiscal sanity. An estimated 55 percent of Americans receive some form of entitlement, a level that is unsustainable but that requires political courage to reform. We also need to insist that Democrats and Republicans make ideological compromises. No business leader would tolerate this type of dysfunction in our organizations. We must not accept it in the public sector. If politicians can’t work together, we should use our voices, employees and resources to elect politicians who can. After Washington fixes entitlements and moves on to spending cuts and broader tax reform, businesses should accept the negative economic consequences of reduced pork-barrel spending and stop lobbying for special advantages.
Business leaders should not listen to political advisers who tell us speaking out is too risky. We need to commit to providing fair and balanced advice. It is time we do more to help America.