Oswald Letter

Only compromise will pull us from cliff’s edge

by Dan Oswald

Have you ever been in a meeting where two executives face off, each on the opposite side of a critical issue? You watch the debate like you would a tennis match, with each participant knocking the issue back to the other side. As they volley back and forth, the debate picks up in intensity, and neither side will back down. Suddenly it’s no longer about the issue and what’s best for the business; each executive just wants to win. To hell with compromise—it’s all or nothing!

To me, that’s what is going on in Washington right now with the all-too-famous fiscal cliff. Each party has its ideology, and somehow we’ve arrived at a place where neither side wants to compromise. They’re both taking an “it’s my way or the highway” attitude, and they’re playing this game of chicken with the American economy.

On December 11, the members of Business Roundtable published a letter to the president and Congress imploring them to take action—and in this case, action requires compromise. The letter was signed by the CEOs of more than 150 companies, including American Express, GE, Aetna, FedEx, and AT&T. These business leaders represent companies with more than $7.3 trillion in sales and 16 million workers.

In the letter, the business executives say they believe “the United States will suffer significant negative economic, employment, and social consequences for going over the fiscal cliff. In many cases the damage will be long-lasting, if not permanent.”

I know CEOs aren’t the most beloved people in our country, but you must assume they’re smart people who know how our current situation in Washington is going to affect their companies. And if the top executives in some of the most respected companies in this country—if not the world—tell you they’re concerned about the consequences of going over the fiscal cliff, do you think you might listen? These executives aren’t playing politics. They’re looking to avoid an economic disaster. They know the uncertainty surrounding what is going on in Washington prevents businesses from investing and hiring. And when businesses are afraid to invest and hire, it’s crippling to the economy.

The letter urges the president and Congress to compromise for the good of the country. There’s an interesting concept! The very definition of compromise is “a settlement of differences by mutual concessions.” The key here being two words: mutual concessions. As the letter correctly points out, in Washington, there is a propensity to want to declare victory—each side looking to claim its side won. To my mind, if the president and Congress can act to avoid the cliff, the American people win, and if they don’t, we all lose.

With the tax increases and spending cuts that would occur if no compromise is made, the nation will likely fall back into recession. We’re already seeing business confidence fall as the wrangling in Washington continues. The NFIB survey of business confidence fell to its lowest point since 2009, with 49 percent of the respondents expecting business conditions to get worse. The Congressional Budget Office says that if we go off the fiscal cliff, the unemployment rate will push back above nine percent. Who believes that’s a good thing for Americans?

The president and Congress can’t lose sight of the fact that the American people elected them to govern. At some point, they must compromise to raise revenues and cut spending. This can’t go on any longer. It seems to me that each party wants to win the battle, but do they know they’re going to lose the war? And it’s you and me and every other American who will end up paying the price.