State of the Debt - CEO Update
Thursday, February 07, 2013
Posted by: Rick Murray, CEO
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 their full potential. 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 in order 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
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” at
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 goes 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.