Debt Ceiling Deadlock

Negotiations break down as America's business titans express unprecedented fears.

Amidst the ongoing negotiations in the budget ceiling debate it is easy to lose sight of the bigger picture, which is all about maintaining the ongoing health of the economy itself. Two prominent businessmen, speaking independently, came to the same conclusion regarding that picture last week. Home Depot founder Bernie Marcus and hotel and casino operator Steve Wynn have both determined that the greatest impediment to job creation is the current administration, and its combination of stifling regulations and re-distributionist ambitions. Even more disturbing, both men revealed that many of America's job creators share one other sentiment as well: they fear president Obama.

Marcus made his feelings known in an interview with Investor's Business Daily. Asked what the single biggest impediment to job growth was today, Mr. Marcus was blunt. "The U.S. government," he answered. "Having built a small business into a big one, I can tell you that today the impediments that the government imposes are impossible to deal with. Home Depot would never have succeeded if we'd tried to start it today. Every day you see rules and regulations from a group of Washington bureaucrats who know nothing about running a business. And I mean every day. It's become stifling."

And lest anyone thinks Mr. Marcus was referring strictly to large corporations, he made it clear that he was not. "If you're a small businessman, the only way to deal with it is to work harder, put in more hours, and let people go. When you consider that something like 70% of the American people work for small businesses, you are talking about a big economic impact," he said. He further noted that while the president's speeches are "wonderful," his actual results are "incredibly bad," and that even as the president speaks about cutting regulations, "they are now producing thousands of pages of new ones. With just ObamaCare by itself, you have a 2,000 page bill that's probably going to end up being 150,000 pages of regulations," warned Marcus.

With respect to the ongoing budget ceiling debate, Marcus was equally blunt. "If we don't lower spending and if we don't deal with paying down the debt, we are going to have to raise taxes. Even brain-dead economists understand that when you raise taxes, you cost jobs."

Perhaps brain-dead economists do. The president? Not so much. Budget talks with House Speaker John Boehner broke down on Friday over what was described as a package of $3.5 trillion in spending cuts, coupled with $800 billion in increased tax revenue. Mr. Boehner walked away when he said the president "moved the goal posts," by attempting to add an additional $400 billion in taxes to the deal. Taxes the speaker characterized as "nothing more than a tax hike on the American people."

Mr. Obama countered with his now-familiar populist rhetoric, contending that such taxes were necessary to protect those "who are least able to protect themselves, who don't have lobbyists in this town, who don't have lawyers working on the tax code for them...working stiffs out there, ordinary folks who are struggling every day, and they know they're getting a raw deal...because they know somehow that no matter how hard they work, they don't seem to be able to keep up."

No doubt Mr. Obama's concern for "working stiffs" is genuine. Yet it would appear he has lost sight of the fact that there are more than fourteen million non-working stiffs in this country, who undoubtedly think that they too are "getting a raw deal."

Why aren't new jobs being created? Las Vegas businessman Steven Wynn, who calls himself a "Harry Reid supporting Democrat," was as blunt as Bernie Marcus. Noting that there was "a host of opportunities to create tens of thousands of jobs in Las Vegas,...I could do 10,000 more myself," he explained that he was "afraid to do anything in the current political environment in the United States" due to "a total lack of leadership from the President[.]" And like Mr. Marcus, Mr. Wynn said that "this administration is the greatest wet blanket to business, and progress and job creation in my lifetime. And I can prove it and I could spend the next 3 hours giving you examples of all of us in this market place that are frightened to death about all the new regulations, our healthcare costs escalate, regulations coming from left and right."

Fearfulness of government animated both men to a striking degree. When Bernie Marcus was asked why more businessmen don't speak out, he said those businessmen "are frightened to death--frightened that they will have the IRS or SEC on them. In my 50 years in business, I have never seen executives of major companies who were more intimidated by an administration," he said. Mr. Wynn, who noted that the president "keeps making speeches about redistribution," unabashedly echoed that sentiment. "Everybody's afraid of the government, and there's no need soft peddling it, it's the truth. It is the truth. And that's true of Democratic businessmen and Republican businessmen... I support Democrats and Republicans. And I'm telling you that the business community in this country is frightened to death of the weird political philosophy of the President of the United States."

Then Mr. Wynn zeroed in on the big picture. Until Mr. Obama leaves office, he contended, "everybody's going to be sitting on their thumbs."

Where does the public sit? A CNN/Opinion Research Corporation poll conducted last week revealed that 66 percent of Americans supported the Cut, Cap and Balance Act approach to reining in government excess, and 74 percent favor a balanced budget amendment. Yet despite being passed by the House, Cut, Cap and Balance was blocked from being brought to vote in the Senate on Friday. A "motion to proceed" was tabled by a 51-46 vote along party lines.

Senate Majority Leader Harry Reid, who called CC&B “perhaps some of the worst legislation in the history of this country” had originally scheduled a vote on the proposal for Saturday, but moved it to Friday at the last minute. This had many Republicans upset. “Senate Democrats should stop hiding behind a procedural vote to block a plan with two-to-one support from the American public," said Rep. Jim Jordan (R-OH). “The Senate and the president are in meltdown,” said Rep. Jason Chaffetz (R-UT). “They have not figured out what they’re going to do. They have no plan, they haven’t put anything on a piece of paper. And the clock is ticking.”

Senator Jim DeMint (R-SC) was furious. "It is outrageous that every Senate Democrat voted against even allowing a debate on balancing the budget within 10 years, a plan supported by two-thirds of Americans with wide support across all party lines," he fumed. "Why are Senate Democrats so afraid to debate a balanced budget?" He then reiterated a position proposed by this columnist last week. "I urge Republican leaders to stop letting the President drag you back like children into secret meetings where he pretends to do something constructive...No more closed door meetings, no more phony compromises that don’t solve the problem, no more useless commissions."

Unfortunately, such openness isn't likely. On Saturday, the president held another private meeting, this time with Boehner, Reid and Senate Minority Leader Mitch McConnell. It went nowhere. Another meeting took place in Boehner's office late Saturday. It included Sen. Reid, House Minority Leader Nancy Pelosi (D-CA) and Sen. Mitch McConnell (R-KY), all of whom were reportedly trying to reach a deal before the Asian stock markets opened late Sunday. 50 minutes later it was over. No deal was reached.

Afterwards, Harry Reid spoke with reporters. "I am deeply disappointed in the status of negotiations with my Republican colleagues," he said. "I hope that Speaker Boehner and Leader McConnell will reconsider their intransigence. Their unwillingness to compromise is pushing us to the brink of default." That's a rather remarkable statement from the leader of the Senate, where no budget deal has been passed for over 800 days, and nothing in writing has been proposed by any Democrat in either chamber of Congress to date.

The second meeting was driven by fears of a worldwide stock market selloff. Why Monday in particular? That scenario was promoted by the president himself on Friday. "I think it's very important that the leadership understands that Wall Street will be opening on Monday, and we better have some answers during the course of the next several days," he said late that afternoon. The president's inference of possible market chaos is reminiscent of his remark regarding the possibility that Social Security checks might not go out unless the dispute is resolved. Both statements reflect the "never let a crisis go to waste" fear-mongering that is rapidly becoming this administration's M.O. An M.O. which has business leaders like Bernie Marcus, Steve Wynn and countless others "sitting n their thumbs."

As of late Sunday, bipartisan talks had broken down, and both parties were in fallback mode. On the Democrat side it was being reported that Senate Majority Leader Harry Reid was working on a $2.5 trillion deficit reduction package that would extend the debt ceiling until 2013. No tax increases were part of the deal. House Speaker Boehner reiterated his support for Cut, Cap and Balance, but with a two-stage process likely to include dollar-for-dollar spending cuts tied to commensurate raises in the debt ceiling. The backdrop for all the partisan maneuvering? As always, the 2012 election.

Will a deal get done? Undoubtedly. And while that's a good thing, almost irrespective of the details, compromises and political one-upmanship, it is little more than the proverbial tree in a forest of uncertainty -- and fear -- elucidated by Bernie Marcus and Steve Wynn. In the final analysis, it is the steadfast dedication to big government solutions that will continue to impede job creation, regardless of whatever deal is reached on the debt ceiling. The August 2nd deadline will come and go. But the commitment to Keynesian economics, a weak dollar facilitated by QE2 (and possibly QE3), and massively burdensome regulations will remain.

Unless something unforeseen happens, one can expect the economic status quo to remain largely unchanged. A status quo that is essentially a hiring freeze driven in large part by fear of these economic forces. That's the big picture. One that has been largely lost in the debt ceiling shuffle.

Arnold Ahlert is a political contributor to the conservative website