High-tech CEOs warn that inaction on ‘fiscal cliff’ is unacceptable
WASHINGTON -- The chief executives of Dell Inc., Intel Corp., IBM Corp. and six other leading high-tech companies warned Tuesday that inaction on the so-called fiscal cliff is unacceptable and urged President Obama and Congress to work together to solve the problem and “implement a pro-growth framework.”
“Failure to act will undermine our economy and make the challenge or restoring growth and fiscal sustainability that much more difficult,” the executives, who make up the Technology CEO Council, said in a letter to the White House and lawmakers.
“Employers are already making plans for 2013 hiring and investment, and they cannot assume that the gridlock will end and Washington will suddenly start working again next year,” the nine-member group wrote. “Our experience in business has taught us that progress is only made through compromise.”
In sending the letter, the high-tech chief executives joined a growing list of business and outside groups pushing Washington politicians to act quickly to halt the large tax increases and federal spending cuts looming at the start of next year.
Business leaders have been preaching compromise in hopes of avoid the fiscal cliff’s economic shock, which analysts say would knock the U.S. into another recession.
“Insanity has been defined as doing the same thing over and over, expecting different results,” said Bruce Mehlman, the tech group’s executive director and a former Commerce Department official in the George W. Bush administration.
“America’s economic strategy -- temporary tax rates, unsustainable entitlement programs, inconsistent investment priorities and globally high corporate tax rates riddled with politically popular loopholes -- is therefore insane,” he said.
The executives specifically called for strategic government spending cuts, rather than the across-the-board slashing automatically coming on Jan. 2 if Congress and the White House don’t act.
And the tech leaders said they want corporate tax reform that includes lower rates, a broader base and a so-called territorial system that allows companies to bring back foreign earnings without paying U.S. taxes.
Those changes are similar to the ones proposed by the bipartisan fiscal commission headed by Alan Simpson and Erskine Bowles.
The council, a public-policy advocacy organization founded in 1989, also includes the heads of Xerox Corp., Motorola Solutions, Inc., Qualcomm Inc.. Applied Materials, Inc., EMC Corp., and Micron Technology. Its members said the difficult decisions facing Washington policymakers are similar to those that tech companies deal with in their competitive marketplace.
“For U.S. businesses and workers to remain competitive in a global economy, U.S. lawmakers need to move beyond election-to-election thinking and deliver long-term reforms that drive economic growth, job creation and investment,” said Michael Dell, chief executive of Dell Inc. and chairman of the tech group.
“Other nations are competing harder and smarter, while our tax, immigration, education and infrastructure policies fail to keep pace,” he said. “Today, lawmakers can lay the groundwork for a decade of growth and expansion while bringing down the deficit. I look forward to our political leadership seizing this opportunity to act.”
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