Stephenson WSJ OpEd: It’s All About Growth: America's Future Depends On It | Business Roundtable


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This op-ed originally appeared in the Wall Street Journal

By Randall Stephenson

No matter the topic, the debate in Washington often comes down to whether we need more government funding for social programs or less spending to reduce the debt we leave our children. But this win-lose framing completely misses the one thing required to achieve both objectives: robust economic growth.  

The simple fact is, if we want to control the deficit, preserve key entitlement programs, educate our children, grow jobs, and offer upward economic mobility for everyone, we have to get our economy growing faster.

To that end, the Business Roundtable, whose member companies generate annual revenues of more than $7 trillion while employing 16 million workers, is embracing an agenda for 2014 centered on one thing – encouraging public policies that will return the U.S. to its full growth potential.

And make no mistake, economic growth does not happen absent private sector investment. This isn’t complex economic theory; it’s something we all know from our personal experience. Where there is investment – a new factory or distribution facility being built, a new store about to open, new software being installed – that is where new jobs are created. It is no coincidence that during this period of subpar growth, private capital investment as a percentage of our economy is at post-World War II lows.

A growth agenda designed to drive investment into the U.S has four basic elements. 

First is the necessity for fiscal stability. We have spent the past few years stumbling from one fiscal crisis to the next. As a result, businesses large and small find themselves with no ability to plan beyond a single quarter. Is the government shutting down?  Will the U.S. actually default on its debt? What are the implications to interest rates?  This isn’t exactly an environment conducive to investment.  That’s one of the reasons the two-year Murray-Ryan budget deal approved last month – while not perfect – is a breath of fresh air. It offers some predictability for businesses to invest over a longer planning horizon.  It also provides some breathing room for Congress to now tackle the other three elements that are vital to get our economy growing faster: tax reform, expanded trade and immigration reform.

Nothing will drive investment and growth like business tax reform. Today’s capital markets are global.  Investment flows freely and easily across borders to its highest returns. It should not be surprising that investment in the United States is running at such low levels when the rates at which we tax capital through profits are the highest among all OECD countries. Fortunately, there is broad, bipartisan consensus that current tax rates on businesses of all sizes are too high. Tax reform also means removing barriers to bringing overseas earnings back to the U.S. A study published recently by economists Karel Mertens and Morten Ravn in the June 2013 American Economic Review, for example, shows that a one-percentage-point decrease in the average corporate tax rate would result in an increase in real U.S. GDP of between 0.4 to 0.6 percent within one year. Any serious agenda for economic growth must begin with reforming taxes for all businesses – large and small. 

Expanded trade is also key. Today, one of every five U.S. jobs is supported by international trade. To protect these jobs and grow more, we need to expand global trade and investment. So, Congress should enact updated Trade Promotion Authority legislation – giving President Obama authority as every President has had since Franklin D. Roosevelt to negotiate trade agreements. Twenty years ago, the North American Free Trade Agreement became a reality. The work by Presidents Bush and Clinton resulted in dramatic growth in trade in our hemisphere. Today, we need to ensure that consumers, workers and businesses can all benefit from opening more foreign markets in Asia and Europe for U.S. goods and services.

The final pillar of this growth agenda must be fixing our nation’s broken immigration system. America’s unique competitive advantage has always been its ability to attract the best talent. We can’t turn back on that now, not at a time when high-tech innovation is more important than ever. A successful overhaul of immigration law would create a larger pool of visas for higher-skilled workers, enact a new visa system for lower-skilled workers, offer a path forward for undocumented workers already living in the U.S. and allocate greater resources to strengthen enforcement and secure our borders. Done right, immigration reform can increase our economic growth rate, reduce our deficit and contribute significantly to America’s future.

It’s time to get focused on this short list. Economic growth isn’t a Blue State/Red State issue – it’s an American issue. It’s within our power to create the investment, the jobs and the opportunities our country needs. If we seize the moment, and enact policies to put our economy on track for faster growth, I believe we will once again show the world that America’s best days lie ahead.

Randall Stephenson is Chairman and CEO of AT&T Inc. and the newly named Chairman of the Business Roundtable, an association of chief executive officers of leading U.S. companies.

Find the original op-ed at the Wall Street Journal.

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