Reducing debt should be Obama’s top priority
Published: February 11, 2013 at 4:07 pm
Small businesses in Arizona employ 46 percent of the private-sector workforce. They are an important economic engine to the state, and to the nation. But the uncertainty in Washington makes it difficult for them to live up to the full potential that we all know small business can be. When I was voted CEO of the Arizona Small Business Association (ASBA), I made it a priority to engage our more than 11,000 member-companies to lead and educate them on a number of factors that are vitally important to their businesses, including the ever-changing policy and fiscal environment. But now I find myself at a loss for answers to questions about the future of the nation.
That is why, on Tuesday, when I listen to President Obama deliver the State of the Union, I will be careful to listen for him to discuss one issue in particular: “the State of the Debt.” To small businesses here in the Grand Canyon state, and across the country, the national debt is the most pressing issue. It is our hope that the president will directly address the debt, the deficit and the looming “sequestration” spending cuts that will devastate our state’s economy.
As a member of the business community, it is clear to me that policy instability and economic uncertainty have caused companies and organizations to be apprehensive about future growth opportunities. Businesses are simply unable to determine if it’s a sound investment to open a new facility in Phoenix or hire more workers in Flagstaff.
On Tuesday, the President needs to discuss and push for a deal that addresses the main drivers of this $11 trillion (and counting) calamity, and demonstrate a willingness to work with both Houses of Congress and both parties. They must forge a deal that tackles the deficit, reforms entitlement programs to make them solvent, revamps the broken tax code and creates a comprehensive solution to bend down the dangerous trajectory of our national debt.
Though we avoided going over the so-called “fiscal cliff” on the first of the year, our nation’s economic problems are far from solved. The eleventh-hour deal may have resolved the issue of income tax rates – for now, at least – but it did little to solve our spending addiction. In fact, it merely delayed the across-the-board sequestration cuts until March 1. Then, just a few weeks ago, the House and Senate approved a measure to temporarily suspend the debt ceiling, the amount of money Congress is legally allowed to borrow, until May 19.
Because Republicans and Democrats working together for the common good might as well have been political kryptonite for so long, it seems that Congress’ motto was, “Just say no,” and then pass a last-minute Band-Aid to avoid making the tough decisions. Now, because of their inability to work together, our lawmakers in Washington will face a series of self-inflicted crises over the next couple months.
The most rapidly approaching manufactured crisis is sequestration. While sequestration would at the lowest level reduce the deficit, it is an ill-conceived policy that many economists warn is too much deficit reduction, too fast, and could plunge our nation back into a recession. The nearly $500 billion in cuts to the defense budget alone could cost Arizona up to 50,000 jobs if it go into effect. Many of our state’s small businesses rely on contracts with the Department of Defense and companies like Boeing that support our military.
Rather than allow the sequester to be implemented, Congress needs to devise a calculated plan that makes rational spending reductions to less vital programs. Our leaders in Washington must find a way to once again forge an agreement that will address our short-term fiscal challenges, but to do so while also securing our fiscal footing over the long-term.
As a representative of more than 11,000 small businesses, I urge our elected officials in Washington to use these same tactics when addressing our national debt. Instead of working together and sharing resources they seem to only be interested in political posturing, which usually results in inaction. If the country is going to rein in this massive burden of debt, we must work together and leverage our strengths to solve this problem.
– Rick Murray is the CEO of the Arizona Small Business Association.