Before I became Chairman of the Business Roundtable (BRT), I spent a great deal of time listening to our members, who represent 200 of the largest U.S. employers. We all agreed that our #1 priority had to be economic growth.
We're now five years beyond the financial crisis and still growing below 2% -- unheard of coming out of a major recession. The business community believes nothing should trump growth. Without economic growth, safety nets and health care aren't affordable, and retirement benefits aren't sustainable. So, we view everything through a lens of growth.
Private-sector net capital investment as a percentage of our economy is at post-World War II lows in this recovery. Those of us who run businesses understand a couple of basic economic truths: you cannot grow without investing; and if you aren't investing, you aren't hiring.
So we asked ourselves: What public policies are distorting markets and hindering our growth and investment?
The answer became the four pillars of the BRT's growth agenda: Fiscal stability; business tax reform; expand global trade; immigration reform.
Let's start with fiscal stability. Businesses evaluating multi-year capital investments can understandably be cautious when they don't know if the government is going to default on its debt or shut down essential services. While it might be a radical idea to some, the BRT believes it makes sense for the largest institution on earth-- the U.S. Government -- to operate within a budget passed by both houses of Congress and the Administration, as a matter of course.
That is what is meant by stability. And the Ryan-Murray plan has gone a long way toward achieving it. We believe strongly this must become the "new normal."
We also believe nothing will stimulate investment in the US like business tax reform. Capital markets are incredibly liquid. Capital flows freely to the highest returns. So, when the U.S. taxes profits more than any other developed country, it should be no surprise that the investment driving those profits is moving to lower cost countries.
How do we address that? It starts with closing loopholes and eliminating special exemptions. Then we need to drive down rates to competitive levels. In February, House Ways and Means Committee Chairman Dave Camp introduced a measure to accomplish this. It would cut the top corporate rate to 25% over five years, tax income earned abroad in much the same way as the rest of the world and reduce the top individual rate to 35%. The BRT's analysis is that this sort of approach would significantly improve growth in the short and long term.
There is broad bipartisan consensus around business tax reform. Now, we need to get it done.
Next, expand global trade. The US has the world's best-run businesses with the highest-skilled workforce. We should not, and cannot, be afraid of free trade. Consumers and workers all benefit from opening more foreign markets.
So we are calling on Congress to enact Trade Promotion Authority legislation … and give President Obama the authority every president has had since FDR.
Finally, we need immigration reform. Immigration has always been a source of strength for us – we have always welcomed people who work hard, pay taxes and contribute to our prosperity. Immigrants or their children have founded more than 40% of the companies in the Fortune 500. They have historically filled entry-level jobs, and used them as a stepping stone to climb up the ladder.
We can't afford to turn our back on that now. Polls consistently show that 70% of Americans, from both parties, support fixing our broken immigration system. That's why the BRT is pushing Congress and the Administration to deal with it.
Overall, it seems that a lot of people believe that the US has lost a step.
But I believe the opportunities in front of us are game-changing. We lead the world in the industries that matter: energy, telecom, tech and healthcare, to name a few. Those industries will drive the world's next big productivity and prosperity boom.
But our economic leadership is far from certain. You hear people saying that gridlock in Washington is a good thing because it prevents our government from digging a deeper hole. That's wrong. Gridlock on the most important policy matters is exactly what's preventing our economy from achieving its true potential.
The fact these are difficult issues is no excuse. We call on Congress and the Administration to get busy addressing the barriers that are holding us back.
Randall Stephenson is chairman and chief executive officer of AT&T Inc., a global leader in mobile Internet services and IP-based business communications solutions. On January 1, 2014 he was named chairman of Business Roundtable,an association of chief executive officers of leading U.S. companies working to promote sound public policy and a thriving U.S. economy.