I am the CEO of TiVo, one of the original participants in the Fix the Debt Campaign, and I voted for President Obama for reelection. But it’s clear to me that partisans on both sides are misinterpreting the current political dynamics surrounding deficits and the possibility and logic of compromise in Washington.
New York Times columnist Paul Krugman may find this difficult to believe, but I very much accept the proposition that unemployment remains the economy’s biggest issue, and that we need both smartly targeted short-term stimulus and a real plan for long-term debt reduction. I also categorically reject the Krugmanesque notion that all of the participating CEOs disfavor the idea of short-term stimulus spending and are “debt scrooges.” Meanwhile, I’ve noticed that on MSNBC’s Morning Joe, (which my company has sponsored) Republican host Joe Scarborough has repeatedly said that President Obama won a clear and convincing electoral victory last November. Internalizing this framing, in my view, has led to actions that make a useful compromise more difficult.
An appreciation of the position of CEOs like myself, combined with a more generous reading of the November election results than is common, should help inform how the president, Congress, and business address the challenge of short-term economic growth and long-term deficits. And it leads to the inescapable conclusion that people like me might be of some help in breaking the gridlock.
Consider the following inside-the-beltway observations from a former Congressional staffer and a current outside-the-beltway CEO.
First, it really is highly significant how many CEOs have joined the Fix the Debt effort—now more than 125. From my experience going back to my days as counsel to a congressional committee, CEOs get involved in the political process for one of only three reasons—to lobby for a company or industry-specific issue; to fund the campaign of a particular candidate they have interest in maintaining access to; or, to participate as political ideologues on one side of the spectrum or the other. This time it’s different. Many CEOs are coming forward without endorsing a particular political point of view, but simply to make abundantly clear we are at too perilous a point to avoid coming up with a serious long-term solution regarding the nation’s debt.
Second, when you really get behind the numbers, President Obama’s electoral win was, in a sense, by a hair. Democrats and the media need to have a more reasonable perspective on the Republican vantage point. You can ask CEOs who have done deals of any kind and they will tell you the best way to make sure you don’t get a deal done is to humiliate the other side. The congressional passage of the most recent tax package without any spending cuts was a total humiliation to House Republicans. Moreover, when I worked on Capitol Hill we had a saying that “Congress couldn’t make minute rice in less than 6 months.” Yet, there is some real urgency to being able to come up with the right package of near-term stimulus to get unemployment down (Europe has done the opposite and failed). But the political realities dictate that this can only be accomplished as part of a compromise over long-term debt reduction. Republicans are generally castigated in the media for even thinking about tying resolutions to deadlines like the debt ceiling and funding the government. But the only way to get urgent action is to have some kind of deadline that has some meaningful consequence if it’s not hit.
Third, the Republicans were defeated, not destroyed, last November. If only 300,000 voters in Florida, Ohio, Virginia, and New Hampshire had voted for Romney (or less than .3 percent of the total vote), he would have secured 270 electoral votes. Meanwhile, the Republican Congressional majority doesn’t care about the national vote. They’re mostly concerned with whether they will face challenges in Republican primaries in which a small minority of voters participate. Many rightfully view going along with any kind of compromise with the president as political suicide. Therefore, Republican congressmen are going to need all kinds of business constituencies to come forward and give them cover so they can credibly assess a path toward meaningful compromise without killing their political careers.
Fourth, execution often matters more than planning. Raising taxes on only the top 1 percent of Americans was not hard political work. And passing legislation today that reduces the debt over the long term but does not affect citizens immediately is also not necessarily politically difficult. What’s hard is enforcing those actual spending reductions, since it is very easy for a future Congress to overturn the work of a previous Congress— we are seeing this today with both parties' attempts to overturn sequestration. And so a lot more thought has to go into creating some kind of mechanism that makes it extremely politically distasteful for a future Congress to overturn a long term debt reduction plan when the time comes for those spending cuts to go into effect.
Finally, Washington should stop negotiating and start mediating. As many pundits have pointed out, the key Washington players today lack the kind of personal skills and political relationships necessary to effect a compromise. The parties have tried to come together and have shown each time they have done what the Fix the Debt CEOs most fear—that is, to continue to kick the can down the road and not address the fundamental issues. The most important one is how we deal with reforming a health-care system that is on a path to result in vastly more deficit spending then we can afford. Passing the buck to a blue ribbon commission like Erskine-Bowles was tried and has failed. So I’d suggest trying something new that takes advantage of the unique desire of CEOs who have come forward to drive compromise. When companies find themselves in seemingly irresolvable disputes with each other, they often bring in a mediator. We should do the same for the budget today. Only in this case let the mediators be a couple of CEOs hand-picked by each political party. These would be executives who understand the economic and political realities outlined above, whose job is coming up with practical ideas and solutions that are geared toward growing their own companies—just as any political compromise must ensure growth of the economy. CEOs as mediators behind the scenes, rolling up their sleeves to help get this done might be just the right fix. Let’s turn Fix the Debt into Fix the Political Process.
Tom Rogers has been the CEO of TiVo since 2005.