At testy town halls and heated street corner encounters, members of Congress from both parties are hearing from voters like us who are frustrated by the partisan gridlock in Washington. We are tired of hot air and want to see action to heat up our economy, whether it's on immigration reform that will create new jobs or on the ongoing government shutdown and debt ceiling showdown that Congress must find a way to solve.
The two of us run businesses based in Maryland. At first glance, you might think that's where the similarities end: Arne's company, Marriott International, operates in more than 70 countries and territories worldwide and counts its number of employees in the six figures. Martin's company, Knott Mechanical, provides HVAC and plumbing services to over 50 million square feet of space throughout 10 counties in central Maryland and counts its employees in the two digits. While we are in different industries and operate on completely different scales, we are 100 percent on the same page when it comes to knowing what our political leaders must do to improve this country's business climate: They must create the kind of policy certainty and economic stability that will only come after truly confronting our exploding national debt.
Simply put, high levels of national debt are bad for businesses large and small, bad for the economy and bad for Americans in all stations in life. Large debt burdens have been associated with higher levels of interest, inflation and unemployment, not to mention slower economic growth. And our debt burden certainly is large — larger as a share of the economy than it has been since the immediate aftermath of World War II — and, by decade's end, it will be growing yet again.
Our elected leaders' ham-handed approach in dealing with the debt thus far has left a lot to be desired. Instead of dealing directly with the true drivers of our debt — namely our outdated, inefficient tax code and the ever-increasing costs of our entitlement programs — Congress has proceeded to cut needed short-term investments and quashed businesses' confidence that we'll know what tomorrow's policy landscape will look like. Simply put, it's hard for a business of any size to commit to a big new investment in equipment, technology or personnel without knowing what regulations, tax incentives or our economy will look like in the near future.
Fortunately, our leaders in Washington can deal with all of these problems in one fell swoop by crafting a comprehensive plan to stabilize and start reducing our debt relative to the economy. A first step would be to undertake structural, deficit-reducing, pro-growth tax reform. Though small businesses and multinational corporations may disagree about the exact provisions we would want to see in a revamped code, we share the same desire of wanting a tax code that is simpler and fairer, with a broadened base and lowered rates. Such a code would allow businesses of all sizes to concentrate more on their core business, and less on developing economy-distorting arrangements to reduce their tax liabilities.
A reformed tax code, however, is just one component in the kind of comprehensive deficit-reduction package businesses around the country all know that we need in order to give our economy a jump-start. Our political leaders must also figure out how to reform our entitlements in order to make them more efficient and ensure they will be there for generations of Americans to come. They also must rein in spending on wasteful or low-priority programs but do so in a way that doesn't bring about damaging short-term austerity.
While our deficits have indeed shrunk in recent years, businesses from coast to coast know that we need to do more in order to put us in the best possible situation for long-term economic predictability and prosperity. And that means making necessary deficit-reducing changes now instead of waiting until market forces demand that we take action in a much more drastic manner.
However, acting now means getting our elected leaders to do something not in a moment of crisis — as is their M.O. of late — but rather to confront our debt before it truly starts damaging our economy. That's why we are both members of the Campaign to Fix the Debt, a national, bipartisan organization that is advocating that our leaders in Washington compromise on a deficit-reduction agreement before it is too late.
Fixing the debt is good for businesses large and small, good for Maryland and good for America. We hope that you join us in letting our elected leaders know just how important this issue is.
Arne Sorenson is President and CEO of Marriott International, which is based in Bethesda. Martin Knott is CEO of Knott Mechanical in Hunt Valley.