Private sector fretting over logjam

Private sector fretting over logjam

After riding the Washington roller coaster through the 2011 debt limit fight and the "fiscal cliff," the business community finds itself in a familiar place yet again: with policymakers throwing up roadblocks to the struggling economy.

Groups representing all sizes of the private sector are ramping up calls for Washington to do something — anything — to help the economy, rather than hurt it.

Instead, businesses are watching Washington hurtle toward a potential government shutdown or, even worse, a debt default, and wondering why policymakers keep playing politics while the economy teeters.

 “It’s exasperating because there are real consequences,” said David French, top lobbyist for the National Retail Federation. “The business community sometimes feels like it’s a hostage situation, and they prefer not to have a front row seat.“

“Both sides of the political aisle will be trying to figure out unfortunately what will give them maximum political leverage instead of worrying about what would be maximum leverage for the country to be able to compete and succeed,” said Jay Timmons, president and CEO of the National Association of Manufacturers.

Business groups are ramping up efforts to push Congress toward some sort of resolution and are sounding increasingly irritated about the latest round of deja vu.

But while those groups aren’t shy about picking on Washington, they are much more reluctant to pick sides.

President Obama sought to bring the Business Roundtable to his corner on Wednesday, arguing that Republicans were using the debt limit debate to “extort” concessions and urging the executives gathered to bring pressure to bear on the GOP.

In its latest survey of members released that same day, the Roundtable found that roughly half were planning on trimming hiring plans due to drama emanating from Washington.

They urged Congress to promptly raise the debt ceiling but refused to call one party out over another.

“The best way to avoid that is for the two sides to get down to it and find a solution," said Jim McNerney, the group’s head and the CEO of Boeing.

The Chamber of Commerce dipped into the debate earlier this week, sending a letter to lawmakers urging them to fund the government and raise the debt limit, and then tackle difficult policy matters.

In the letter, the Chamber noted that Democrats and the GOP weren’t ready to solve their differences on major issues like the debate over ObamaCare, implying that House Republicans should step back from efforts to demand a defunding of the law to avoid a government shutdown.

But the letter also doesn’t single out a party specifically, and the Chamber has expressed frustration over Congress’s inability to reform entitlement programs — an area where many Democrats are resistant to changes. And while businesses are not happy about a messy debt limit fight, Republicans are looking to tie many business priorities to a borrowing boost, such as tax reform and other regulatory reforms.

“There’s more than enough blame to allocate in both directions. Look, the notion of defaulting on our obligations in an attempt to extract concessions you know the other party is not willing to make is politically suicidal,” French said.

“On the other hand, I think Republicans are right when they say what’s driving is an entitlement crisis that’s going to consume federal resources," French added. “They’re both right, and we’d like to see both sides find a way to compromise."

While businesses across the board are eager to see the debt limit boosted, the heartburn is particularly high on Wall Street, where a failure to boost that limit could completely upend markets and thrust the financial sector into unprecedented chaos.

A vote to raise the debt limit has always been politically fraught, but recent editions have been especially frightening for investors. One senior financial industry executive said he believed the 2013 fight could be the worst one yet.

“There’s a significant chance that this one will be even messier than the summer of 2011,” the executive said. “The financial sector generally just looks at the inability of Washington to do their very basic governance as perplexing and befuddling. It’s so counterproductive.”

The executive added that while most of Wall Street does not place most of the blame on one party, the upsurge in conservative Republicans openly discussing not raising the debt limit at all is a particular concern.

“When Tea Party members talk about debt default as a viable thing, that does not sit well with members of the financial community,” he added.

The concern for the economy driven by Washington politics was underscored earlier this week, when the Federal Reserve stunned markets by deciding not to start trimming its economic stimulus. Fed Chairman Ben Bernanke said the decision to hold off on removing economic support was driven in large part by Washington.

"Upcoming fiscal debates may involve additional risks to financial markets and the broader economy," Bernanke said at a press conference. "In light of these uncertainties, the committee decided to wait for more evidence."

But like the outside business groups, Bernanke and the nonpolitical Fed also steered clear of picking sides.

“It’s extraordinarily important that Congress and the administration work together to find a way to make sure that the government is funded, public services are provided, that the government pays its bills,” he said.

In the meantime, the business community is hoping Congress will eventually find a way to govern without regular crises, but they aren’t holding their breath.

“I haven’t seen any indication out of either side that they’ve solved the bigger problem,” said French. “In some ways, it’s only getting worse.”

Some House Republicans, meanwhile, say that Washington groups are getting more worked up about the looming fiscal deadlines than small businesses back home.

Rep. Mark Meadows (N.C.), one of the GOP lawmakers pushing more of a hard line on defunding the healthcare law, said he too was queasy about playing chicken over the debt limit.

But Meadows also told The Hill that many small businesses in his district “see the effects of ObamaCare being so undesirable that they’re saying please do something about it, even if you’re having to negotiate a little bit harder on stuff that we’d prefer you not touch.”

— Ben Geman contributed to this story.