Opinion: Manufacturers feel weight of national debt

In Missouri, manufacturing contributes more than $30 billion to the state’s economy and employs nearly 290,000 people statewide. Nationally, 11.5 percent of our country’s gross domestic product can be attributed to the manufacturing sector – that’s $1.6 trillion each year. Manufacturers in Missouri and across the country are an important economic engine for America, but the industry is losing steam because of Washington’s inability to get its fiscal house in order.

As CEO of the Missouri Association of Manufacturers, I know the skyrocketing national debt negatively affects our businesses. That’s why I traveled to Washington, D.C., in early February to attend the Common Ground Summit, an event hosted by the Campaign to Fix the Debt, a nonprofit, bipartisan advocacy organization. The summit brought together leaders from around the nation with backgrounds ranging from civil rights, government and policy to business, health care and religion.

I was very impressed with all that was accomplished in such a short amount of time. With more than 70 organizations represented, and such a complicated and critical issue at hand, it was amazing that we were able to identify a number of common ground areas. We were all assigned seats at tables of eight and were paired with representatives from very different backgrounds. We were then given topics of discussion and tasked with finding common ground on how to best approach the issues. Despite our differences, we all found common ground and agreed that the national debt was something that was hindering all of our goals.

Severity of sequestration
Each of us in attendance agreed the current trajectory of national debt is simply not sustainable and that if Washington is unable to get our country’s fiscal house in order, our status as a world leader could be in jeopardy.

Regardless of political affiliation, we all agreed reforming our entitlement programs to ensure their solvency for years to come should absolutely be a priority. We also agreed the broken tax code needed to be reformed, because the national debt is not a one-sided problem, but rather one that needs solutions on both sides of the ledger.

And what we all agreed on most is that the automatic “sequestration” spending cuts scheduled to go into effect March 1 if a deal is not reached would do nothing but harm every one of our individual goals – be they financial, educational or personal – and that they must be replaced with a real, sensible plan that reduces spending in a responsible and calculated way.

Here in Missouri, sequestration could force 50,000 people out of work and cause businesses to close their doors. Our state’s robust defense industry and the small businesses that support it would be particularly affected.

Unintended consequences
Our political leaders consider many policy options to deal with our fiscal problems as “sacred cows” – there will be no solution that satisfies everyone. We all need to be willing to sacrifice to some extent. The end result should provide a long-term sustainable plan that includes comprehensive tax reform as well as measures to make our entitlement programs solvent for future generations.

We also need to evaluate the impact and any unintended consequences of the proposed options. If left unchecked, the national debt could truly devastate businesses, including those in the manufacturing sector. The threat of a credit downgrade and higher interest rates, coupled with increasingly more limited access to capital, will make it more difficult and costly for folks to do business in Missouri and across the country.

Furthermore, the inability for businesses to plan ahead is increasingly becoming a hindrance to economic growth. Time after time, I hear business owners say they are reluctant to hire more workers, invest capital in new equipment, or build a new factory because they just can’t predict what is going to happen in Washington. While job growth is stagnant, we cannot afford inaction.

Our economy is chugging along, but if Washington were to get its act together, manufacturing could put it in overdrive.

I was honored to bring the voice of Missouri’s manufacturers to the debate about our nation’s fiscal health.  I am positive if Congress and the White House worked in the same spirit that we did to find common ground, they would be able to solve this economic mess.
 
Rita Needham is the CEO of the Missouri Association of Manufacturers and a steering committee member of the Missouri Chapter of the Campaign to Fix the Debt.[[In-content Ad]]