PhillyDeals: Seven top executives "propose a truce" to Democrats and GOP over budget fight

Seven private-company executives, most from the Philadelphia area, wrote to Pennsylvania's members of Congress on Monday, urging an end to the federal budget fight before it sinks U.S. credit and boosts borrowing costs.

The executives told Republicans to stop blocking tax reform and Democrats to curb future Social Security, Medicare, and Medicaid deficits.

The group of bosses includes "Republicans and Democrats," said signer Richard G. Phillips Jr., chief executive at Media-based Pilot Air Freight, who has done business with some of the other executives. "The majority of us lean conservative. Party affiliation did not come up in the conversations. We need the moderate center to take control again."

Here are the highlights of the message they sent to Sens. Bob Casey and Pat Toomey and members of the House of Representatives:

"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, [will] 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.

"Reform to Medicare, Medicaid and Social Security is necessary. 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.

"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."

Along with Phillips, the signers were Peter Blommer, president and CEO, Blommer Chocolate Co., East Greenville; Court Cunningham, CEO, Yodle Inc., New York; Kurt Herwald, president, Commercial Foodservice Repair Inc., Greenville, S.C.; Farid Naib, CEO, Document Depository Corp., Philadelphia; Gregory W. Piasecki, CFO, Dragonfly Pictures Inc., Essington; and Dennis F. Wilson, president and CEO, Cytokine PharmaSciences Inc., King of Prussia.

As the CEOs went to the post office, Casey and Pennsylvania Reps. Pat Meehan, Chaka Fattah and Allyson Schwartz rallied with health-industry lobbyists at the University City Science Center to talk up their new bill pushing tax breaks for biotech.

Casey and Meehan agreed it's tough to get their leaders' attention amid the budget fight. But they both said that most in Congress don't want a default, that a deal will get cut - and that their bipartisan campaign (Meehan is a Republican, the others Democrats) sets an example for broader and much-needed tax reform.

Their proposed Life Sciences Jobs and Investment Act of 2011 would double, to 20 percent, the tax credit for life-sciences companies on their first $150 million of research-and-development spending. It would also cut, to 5.25 percent, U.S. income taxes on the first $150 million a company sends home each year from foreign affiliates - to hire scientific staff, fund university research, or invest in new corporate labs in this country.

Fattah called the bill a way to compete with foreign drugmaker subsidies. Meehan called it a way "to bring back foreign investment" and "give us the chance to grow the next big company in Pennsylvania."

Industry brought the parties together. Backing the bill are Pennsylvania Bio, the trade group run by Christopher Molineau, who reminded everyone how 80,000 Pennsylvanians work in health-industry jobs, and more in related or dependent jobs. Supporters on hand to cheer the bill included, for example, Julie H. McHugh, chief operations officer of Chadds Ford-based Endo Pharmaceuticals Holdings Inc., and Duane Morris pharma lawyer Richard P. Jaffe, who walked out arm-in-arm with Fattah.