The clout and cover of Tom Donohue
Unlike a politician, Thomas Donohue -- CEO of the US Chamber of Commerce -- doesn't have to worry about the next election. He can provide cover to politicians who might get scared off by tough decisions on the economy and spending.
This is particularly useful right now because the country faces tough economic and budget choices that could scare off political action. Unlike a pol, Mr. Donohue doesn't need to watch his backside or worry about the next election. Now, when the government has pretty much run out of stimulative options for the economy and is depending on the private sector to revive jobs, Donohue has maximum clout. He can use it to provide cover for those in Washington who need to make difficult policy decisions.
Plain-spoken and fair-minded, Donohue talked about several of the tough choices ahead in his annual "State of American Business" address this morning. (The headline: He predicts 3.2 percent growth for the year; 2.4 to 2.6 million new jobs – more bullish than many forecasts but a prediction that's also loaded with caveats, such as rising oil prices.)
In two areas in particular, he can provide a much needed push to Congress and the White House. One is rebuilding America's infrastructure. The other is cutting its federal deficits and debt. Note how both of these involve significant, painful costs: one is in build-out (investing in roads, rail, air, and so on); the other is in build-down (cutting government spending, i.e. services, which the public is sure to find painful).
The country loses its competitive edge when it can't move goods and services, either physically or electronically. And yet lawmakers don't want to spend the money on infrastructure. They keep delaying important pieces of legislation, like reauthorizing the highway bill, because of the price tag. But this means states can't plan. It means projects don't get done. Jobs aren't created.
No politician wants to hear this, but Donohue is willing to say it: User fees that fund these projects – such as the federal gas tax that hasn't been adjusted since 1993 – must be raised. If the government finally commits to a higher, steady source of funding, the private sector will be willing to join in on projects. But nothing will happen if Washington just keeps extending current funding a few months at a time, afraid to ask users to pay their fair share.
Donohue talks frankly about reducing deficits and debt, too. It can't be done by nibbling around the edges. Anything that excludes reforming entitlements (Medicare, Medicaid, Social Security) "is doomed to fail," he said today. As experience shows, though, entitlement reform is a third rail in politics. Touch it, and you're zapped.
But Donohue must be as specific with solutions here as he is in other areas. He would do Congress and the White House a big favor by touching the third rail with them, not just pointing them to it.