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Get Four
|  | NOVEMBER 5, 2004
By Paul Magnusson Corporations Come Collecting from Bush With business groups claiming much credit for his win, they're asking for plenty in return: Trade deals, tax reform, deficit reduction... Corporate America is smiling today. At the President's first post-election press conference on Nov. 4, a relaxed and jocular George W. Bush, basking in his popular majority win, dropped talk of cooperation with the depleted Democrats on Capitol Hill and instead vowed to press ahead with his conservative policy goals. "I earned capital in the campaign, and now I intend to spend it," said Bush. "I'm going to spend it for what I told the people I would spend it on." Bush repeated several of his major campaign themes, as he promised to simplify taxes, shift Social Security toward a partially private system, and cut the budget deficit by half during his second term. Bush pointedly promised to reach out to "everyone who shares our goals." Looking toward a lame-duck session of Congress that will have to wrestle with the past-due federal budget, Bush also warned Congress to keep spending down (see BW Online, 11/15/04, "The Next Four Years"). "OUR MOMENT." That was all welcome news to Bush's business supporters, who hoped that fixing economic and budget problems, cutting and simplifying taxes, and partially privatizing Social Security would be at the top of the President's agenda. Indeed, business groups are already busy claiming considerable credit for Bush's win. Their wish lists now are extensive. Says John Engler, president of the National Association of Manufacturers: "This will be our moment, I believe." On NAM's agenda: A new round of free-trade agreements, an end to any more litigation involving asbestos exposure, getting conservative nominees on the federal judiciary, tax reductions and shifting the tax burden from business income taxes to sales and consumption taxes, relaxed regulation, and more oil and gas drilling domestically to reduce business' growing energy costs. But amid the chest-pounding, some business leaders remain worried that the U.S. may be veering off track in fiscal policy, health care, and even the war in Iraq. "DO NO HARM." Among the most critical problems bedeviling the second Bush Administration: The $415 billion -- and growing -- federal budget deficit. Execs are split on how to staunch the red ink. "All Americans look at it as, 'Are we going to leave the country better off for future Americans,'" says William J. Teuber, CFO of EMC (EMC ), based in Hopkinton, Mass. His solution: Let the 10 years of tax cuts passed in Bush's first term sunset or raise revenues in some other way. "We're going to need to be creative and understand what the war on terrorism is going to cost. We've got to bite the bullet on that," Teuber adds. Not so fast, says John J. Brennan, chairman of Vanguard Group. While he believes the deficit "creates an overhang on the economy, it's a spending problem in many ways." On what Brennan favors, he says, "Savings incentives have been good for the economy." Cutting spending is clearly more popular with businesses than tax increases are. "I think the economy is doing fine.... We just have to do no harm at this stage" in order to reduce the deficit over the long haul, says Richard Kovacevich, chairman and CEO at Wells Fargo (WFC ). Spending cuts are in order, first and foremost -- and he looks to the White House. "I don't think the President has done a very good job on spending -- that's something he and Congress will have to get done," adds Kovacevich.
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