Leading chief executive officers of the Business Roundtable laid out their economic agenda for 2014 on Wednesday, including fiscal stability and business tax reform that they said would lead to much-needed economic growth.
Chairman of the Business Roundtable and CEO of AT&T Inc. Randall Stephenson laid out the group’s four-point action plan at a Christian Science Monitor breakfast in Washington, D.C. The Business Roundtable is an association of CEOs of companies that produce $7.4 trillion in combined annual revenues. The companies comprising the association—which includes representatives from Aetna, Bank of America, and Coca Cola—employ more than 16 million people.
"U.S. growth right now, we consider it not only substandard, but it’s just well below and kind of potential that the U.S. economy could be doing at this stage," Stephenson said. "The key source of this is a lack of investment."
"I cannot believe that it is coincidence that we’re experiencing this kind of long-term subpar growth and long-term significant unemployment consistent with the period of time when the amount of private sector investment going back into this economy is at its post-World War II low," he said.
Topping Stephenson’s "Invested in America" platform was business tax reform, which he said is the "number one thing" that can drive investment.
"I can think of no issue that would, in the short run, drive greater investment than getting our tax rates at a level that’s competitive with the rest of the global and developed world," he said.
The Business Roundtable favors lowering corporate taxes to make America competitive with other developed countries, and promised an aggressive push on the issue in 2014. At 39.1 percent, the United States has one of the highest corporate tax rates in the world, 14 percent higher than the OECD average.
The agenda also included fiscal stability, trade, and immigration reform. Stephenson said he is "very encouraged" by the recent bipartisan budget agreement crafted by Rep. Paul Ryan (R., Wis.) and Sen. Patty Murray (D., Wash.) for removing some uncertainty in Washington.
"I think it’s far from perfect but I would not be critical because it has for the first time in quite a period given us some degree of ability to look forward beyond one quarter at a time," he said.
Much of the discussion with the roomful of reporters at the St. Regis hotel revolved around income inequality, an issue highlighted by President Barack Obama in recent months.
Stephenson said the best method to fight inequality is growth.
"What’s really critical, what’s really relevant is get the U.S. economy growing—we think 4 percent [growth] is achievable," he said. "I just can’t think of anything else that would address this issue quite like that."
When asked about the fear that addressing income gaps would mean higher taxes for the rich, president of the Business Roundtable John Engler said taxes should not be the issue.
"Look, you take Warren Buffett on the one end, and let’s take millions of people who have left the workforce because they couldn’t find a job," he said. "The priority is not really Warren Buffett, and how much he’s making or not making. It’s the millions of people who’ve left the workforce and have had their hope and their future put on hold, or they feel destroyed. How do you get them back?"
A record 91.8 million people are not in the labor force, the lowest labor participation rate since 1978, according to the December jobs report. The unemployment rate declined to 6.7 percent last month, but only 74,000 jobs were added.
"You want to keep the focus where it ought to be, and that’s on the people who have left the workforce, and the people who’ve got very low incomes because the economy is not growing at 4 percent," Engler said.
The first mention of Obamacare came 45 minutes into the breakfast. Stephenson said he is seeking clarity amidst the numerous delays of the law by the administration.
"Clarity is the main thing we’re looking for, right?" he said. "As the rules move it’s kind of hard for companies to plan as to what their workforce costs are going to be. As soon as we can get clarity I think the better off we are."
Nearing the end of the event, and after six questions from reporters on income inequality, Engler responded: "I mean there’s income inequality around this table."
"I am very concerned that Bloomberg and the Wall Street Journal and USA Today probably pays a lot more than some of the bloggers get paid," he said. "And I don’t have a strategy to fix that."
"But I do know if there’s more newsprint and demand for television and radio, there’s more jobs and opportunity," Engler added. "And this has been an environment where there’s been some shrinking of those opportunities. Newsrooms have gotten smaller."
"It’s the same thing with the rest of the economy. It’s growth."