News / Economy

CEOs Take Familiar, Frustrating Path to Washington on Budget Woes

FILE - Maya MacGuineas, president of the Committee for a Responsible Federal Budget, and David Cote, (C) CEO of Honeywell International and part of the steering committee of the Campaign to Fix the Debt, are joined by supporters to ring the opening bell at the New York Stock Exchange, Oct. 25, 2012.
FILE - Maya MacGuineas, president of the Committee for a Responsible Federal Budget, and David Cote, (C) CEO of Honeywell International and part of the steering committee of the Campaign to Fix the Debt, are joined by supporters to ring the opening bell at the New York Stock Exchange, Oct. 25, 2012.
Reuters
Some of America's leading CEOs are beating a familiar path to Washington to support a stopgap bill to raise the U.S. borrowing limit and avert a government shutdown, warning lawmakers that the specter of the first debt default in the country's history and a credit downgrade is damaging the economy.

The business leaders, all members of a group called “Fix the Debt,” said they went to Capitol Hill last week with a simple message for Republicans and Democrats, but it is the same as the one they delivered in budget standoffs of 2011 and 2012.

“Engage in whatever political machinations you wish, but do not default,” said Honeywell International Inc Chief Executive David Cote. “Don't throw away a credit history built up since George Washington.”

For these corporate leaders, it's a bit like the movie “Groundhog Day,” where the main character lives the same day over and over, wondering whether there is a way out of the scene.

What Does a U.S. Government Shutdown Mean?

  • Large parts of the federal government need to be funded each year to operate
  • If Congress cannot agree on how to fund them, those parts of the government shut down
  • During a shutdown, federal workers are separated into excepted and non-excepted employees
  • Excepted must continue to work, and will be paid when Congress funds the government again
  • Non-excepted are furloughed and not guaranteed to receive back-pay
  • Parts of the government dealing with national security and public safety and those with independent funding like the Postal Service continue to operate
  • Other parts shut down, including National Parks, the EPA and the processing of visa and passport applications
  • The last government shutdown lasted 21 days and ended on January 6, 1996
The U.S. government faces the possibility of a partial shutdown of operations on Oct. 1 as Congress struggles to pass an emergency spending bill. Republicans in the U.S. House of Representatives want a one-year delay in the Oct. 1 start of the Affordable Care Act, or Obamacare, President Barack Obama's signature healthcare legislation, in return for raising U.S. borrowing authority by enough to let the Treasury borrow through the end of 2014.

Even though many of the CEOs believe federal spending is excessive and the deficit puts U.S. economic health at risk, they want Congress to pass an emergency measure.

On Friday, the U.S. Chamber of Commerce and 235 other business groups joined the push. In a joint letter to Congress, they urged lawmakers to fund the government past the deadline and to “act expeditiously to raise the nation's debt limit.”

The letter also said, “It is not in the best interest of the employers, employees or the American people to risk a government shutdown that will be economically disruptive and create even more uncertainties for the U.S. economy.”

Dysfunction

The “Fix the Debt” group calls for any short-term debt deal to be followed by fiscal reform to reduce the deficit. The CEOs insist that avoiding a shutdown cannot be the final goal and say a comprehensive bipartisan agreement on politically sensitive tax and spending reforms is needed.

They concede it will be tough to achieve in the deeply divided and gridlocked Congress.

“There's plenty of different plans; what we haven't done is land on one that everybody buys into,” said Bob Moritz, chairman of PricewaterhouseCoopers LLP.

Honeywell's Cote, Tenneco Inc. CEO Gregg Sherrill and Paul Stebbins, executive chairman of World Fuel Services Corp., plan to take an even bigger group of chief executives to Washington in October.

“It's not for us to articulate precisely what the negotiated settlement should look like,” Stebbins said. “But we're telling them that the dysfunction is doing deep damage to the country and to the world's perception of us.”

With current funding scheduled to expire at the end of September and the government fast approaching the $16.7 trillion debt limit imposed by Congress earlier this year, Stebbins said the group urged lawmakers to pass the continuing resolution and not delay Obamacare.

“It's just reckless to try to hold it hostage - to hold the whole country hostage - because you don't like a law,” Stebbins said.

Separately, Goldman Sachs Group Inc's CEO Lloyd Blankfein said that although he was optimistic an agreement to raise the debt ceiling would ultimately pass, concerns that Congress would fail to act in time were hurting markets and the economy.

“Saying we'll blow up the credit rating is not responsible,”  Blankfein said on Wednesday on a panel of the Clinton Global Initiative in New York.

NYSE Euronext CEO Duncan Niederauer, however, said markets have so far taken little notice of the debt ceiling debate.

Niederauer said that anxiety over a potential government shutdown is “the only thing that's stopping the U.S. economy from really being unleashed in a positive way.”

The last close-call on a government shutdown in December 2012 and early 2013 dealt a blow to small-business confidence, hurting lending and job growth, said Richard Hunt, head of a trade group called the Consumer Bankers Association.

Hunt told reporters on Wednesday that experienced lawmakers understand the implications of shutting down the government, but some newer members do not seem to realize how wide-ranging the effects could be.

“Some of these people who just got elected believe they are here to save the country, and they're not worried about a two- or three-day shutdown,” Hunt said. “So we need to make sure we have adults in both parties right now.”

You May Like

China Announces Corruption Probe into Senior Ex-Leader

Former security chief and member of Politburo Standing Committee, Zhou Yongkang, being probed for suspected 'serious disciplinary violation' More

India, US Look to Reset Ties During Kerry Visit

This week's talks will be first high level interaction between two countries since Prime Minister Narendra Modi took charge More

Video Young African Leadership Program Renamed to Honor Mandela

YALI program, launched by President Obama in 2010, aims to build skills in business, entrepreneurship, public management and civic leadership More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Students in Business for Themselvesi
X
Mike O'Sullivan
July 26, 2014 11:04 AM
They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.