Business Groups to Congress, White House: Reach Deal on Debt Limit and Commit to Deficit Reduction Plan

Monday, July 11, 2011 - 8:00pm

WASHINGTON, D.C.—Congress and the White House must increase the debt limit and commit to a deficit reduction plan that is long-term, predictable, and binding, according to a letter sent to President Obama and every member of Congress by a number of business associations.

“Now is the time for our political leaders to put aside partisan differences and act in the nation’s best interests,” said the letter, which was signed by several associations including the U.S. Chamber of Commerce, the Business Roundtable (BRT), the Financial Services Forum, the National Association of Manufacturers (NAM), and the Partnership for New York City. “We believe that our nation’s economic future is reliant upon their actions and urge them to reach an agreement. It is time to pull together rather than pull apart.”

“An unprecedented default on the nation’s bills would have dire consequences for our economy, our markets, and Main Street Americans,” said U.S. Chamber President and CEO Thomas J. Donohue. “Businesses are interested in deficit reduction solutions that help unleash the investment potential of the private sector, leading to economic growth, job creation, and enhanced revenues.”

“The business community in large numbers is saying to our leaders in Washington, ‘Do your job,’” said Business Roundtable President John Engler. “Failure to raise the debt ceiling would strike an immediate and serious blow to any economic recovery, and failure to make significant progress on long-term debt reduction will continue the uncertainty which is hampering our investment climate. To invest and create jobs, business needs certainty; when our leaders step up to our nation’s obligations they signal that we choose to move forward. That can only mean more jobs for America.”

“Failure to raise the debt ceiling and the ensuing default and inability of our country to pay its bills as they come due would have harsh implications for the dollar, the international and domestic financial system, economic growth, and job creation,” said Financial Services Forum President and CEO Rob Nichols. “It is critically important that our leaders arrive at a deal to avoid both the negative consequences of a default and address our federal debt and large annual budget deficits in a responsible way.”

“Manufacturers are closely monitoring the administration and Congress in these negotiations because they understand the catastrophic, long-term impact that default would have on our economy, jobs, and the livelihoods of Americans,” said Jay Timmons, NAM president and CEO. “Manufacturers are urging our elected officials to work together to bring down our federal deficit by taking a hard look at government programs and making difficult decisions to cut spending, especially in the entitlement area, without increasing the tax burden on manufacturing or any individual manufacturing sector.”

“Failure of the U.S. government to meet its financial obligations would create further uncertainty about where this country’s economy is headed and run counter to the interests of all Americans,” said Kathryn Wylde, president and CEO of the Partnership for New York City.

The text of the letter is pasted below:

The President of the United States
The White House
Washington, DC 20500

Members of the United States Congress
United States Capitol
Washington, DC 20510

Dear Mr. President and Members of Congress,

We believe it is vitally important for the US government to make good on its financial obligations and to put its fiscal house in order. With our nation on a sound fiscal footing, we are confident that America’s businesses and entrepreneurs will foster generations of high value, well paying jobs and contribute to a prosperous future. To this end, we believe now is the time for our political leaders to act.

First, it is critical that the US government not default in any way on its fiscal obligations. A great nation - like a great company - has to be relied upon to pay its debts when they become due. This is a Main Street not Wall Street issue. Treasury securities influence the cost of financing not just for companies but more importantly for mortgages, auto loans, credit cards and student debt. A default would risk both disarray in those markets and a host of unintended consequences. The debt ceiling trigger does offer a needed catalyst for serious negotiations on budget discipline but avoiding even a technical default is essential. This is a risk our country must not take.

Second, our political leaders must agree to a plan to substantially reduce our long-term budget deficits with a goal of at least stabilizing our nation’s debt as a percentage of GDP - which will entail difficult choices. The resulting plan must be long-term, predictable and binding. As businesses make plans to invest and hire, we need confidence that, in the absence of a crisis, our government will not reverse course and return to large deficit spending.

Now is the time for our political leaders to put aside partisan differences and act in the nation’s best interests. We believe that our nation’s economic future is reliant upon their actions and urge them to reach an agreement. It is time to pull together rather than pull apart.

Yours sincerely,