Seven private-company CEOs, most from the Philadelphia area, sent a letter today to members of Pennsylvania's U.S. Congressional delegation urging both sides to compromise in the tax and budget debate.
The group includes "Republicans and Democrats," says Richard Phillips, CEO of Pilot Air Freight, who drafted the note. "The majority of us lean conservative. Party affiliation did not come up in the conversations. We need the moderate center to take control again." Text follows.
Our leaders in Washington:
You now have the opportunity dramatically to improve the nation’s economy while stabilizing the government’s fiscal crisis, through spending cuts that include responsible entitlement reform and the closure of certain wasteful and inefficient tax loopholes.
Our representatives in Washington should set aside partisan disputes and ideology and seize this opportunity.
We are writing here as job creators. We collectively employ thousands of people and generate over a billion dollars in revenue.
Our message is simple. The threat of a reasonable increase in the effective tax rate, particularly one that combines the closure of tax loopholes and a reduction in applicable tax rates, does not slow economic growth and will not prevent us from creating more jobs. Rather, a greater impediment to job growth is our continued failure to invest properly in the things that drive our economy, like education, our transportation and information infrastructures, and basic research.
In our private endeavors, we recognize that certain amounts must be reinvested every year in order to fund future growth. We understand the need for the nation to do the same. Thus, as part of a larger package of entitlement reform and other spending reductions, tax reform can benefit our economy by encouraging investment and growth.
Rather than helping, the tax loopholes and expenditures currently being discussed often act to the detriment of sound economic development because they incentivize economic activity in accordance with government mandates rather than market fundamentals.
We welcome the closure of these loopholes and targeted tax expenditures. We believe that cuts to certain tax expenditures, coupled with an overall reduction in the corporate tax rate, will make the nation more competitive, and freer from government interference in the market, while allowing the government to collect the additional revenues needed to invest in the programs that the private sector cannot do alone.
Much has also been written lately of the need for entitlement reform. Bipartisan studies have shown that, even with the deep cuts to discretionary spending on which it seems everyone agrees, reform to Medicare, Medicaid and Social Security is necessary. Moreover, those studies show that entitlement reform can be done without imposing new burdens on our elderly.
Such reform should be undertaken now, when reform need not mean damage to the financial security of the most vulnerable Americans. The longer we wait, however, the more drastic those reform measures will need to be. We should act now to reform these programs and make other reductions in spending to reflect both our values as a nation and our current fiscal situation.
This kind of reform is very difficult for many in the Democratic Party to support, but those Democrats who oppose it must understand that the short term benefit of having opposed reform at this time will be far outweighed by the detriment to these programs from continued inaction. If you truly care about these programs, you will act to preserve them by rendering them sustainable.
We write this letter not as Democrats or Republicans. We have come together as Americans, as business leaders and as job creators. We ask our leaders in Washington to behave similarly, and to act now to solve our nation’s fiscal crisis.
To this end we propose a truce, in which Democrats are given the leeway to do the right thing with respect to entitlement reform, in return for the cover Republicans need to do the right thing with respect to taxes.
We will support such a truce through concerted political action and continued communication on this important subject. More particularly, in the coming election cycle we will not contribute to efforts to demonize either side for compromising on this important subject.
We will speak out on behalf of those who are willing to take the courageous steps necessary to embrace both entitlement reform and tax reform and we will stress the importance of the moderate middle ground that has supported American prosperity for centuries.
Peter Blommer, President and CEO, Blommer Chocolate Company, East Greenville PA
Court Cunningham, CEO, Yodle Inc., New York
Kurt Herwald, President, Commercial Foodservice Repair, Inc, Greenville, S.C.
Farid Naib, CEO, Document Depository Corp., Philadelphia
Richard G. Phillips, Jr., CEO, Pilot Freight Services, Media, Pa.
Gregory W. Piasecki, CFO, Dragonfly Pictures, Inc., Essington, Pa.
Dennis F. Willson, President and CEO, Cytokine PharmaSciences, Inc., King of Prussia, Pa.