Chamber emphasizes growth agenda, “modest increase” in fuel tax to spur infrastructure spending

Amid the nation’s sharpest political divide in decades and the specter of a polarizing figure like Donald J. Trump positioned to be the nation’s 45th president, the nation’s top business lobbyist has called for conciliation around a theme that both Republicans, Democrats and logistics experts should embrace—stronger and faster economic growth.

Thomas J. Donohue, the ever-energetic 78-year-old president and CEO of the U.S. Chamber of Commerce—emphasizing he is “not here to offer a retirement speech”—urged the new Washington to forge ahead on a new path of sustainable, higher economic growth.

And in bucking from Republicans anti-tax dogma, Donohue is again calling for a “modest” increase in the federal tax on motor fuels to help pay for what Trump has promised will be up to $1 trillion in infrastructure spending over 10 years.

“We are fundamentally optimistic about the year ahead,” Donohue said before adding, “We are optimistic, but realistic about the hard work that will be required to make our optimism a reality.”

He said businesses are optimistic that the Republican-controlled government  “has a once in a generation opportunity to enact major reforms that could transform the American economy from low growth to a high growth economy.”

   “Uncertainty is always a factor in business,” Donohue said. “And there is plenty of uncertainty today—not just at home, but abroad.”

Chief among those uncertainties are details of the new administration’s promises of a big boost in infrastructure spending. Mostly it appears to consist of tax breaks for private-public partnerships—but Donohue is urging more.

“We should seize the opportunity created by bipartisan support for infrastructure,” he said. “But it would be a mistake to do more of the same old thing.”

He said projects must be “determined by our nation economic need for growth—not parochial politics.” The former head of the American Trucking Associations for 13 year said this means “taking on large-scale projects—airports, seaports, pipeline, expanded power grid, broadband, air traffic control, secure and efficient borders, and intermodal transportation links—projects that help the entire country.”

While private sector funding “should play a much greater role in infrastructure,” Donohue urged lawmakers to find “a sustainable, long-term funding source that must be part of the equation.”

Speaking directly to tax-abhorrent Republicans, Donohue repeated the Chamber’s backing of a “modest increase” – say a nickel a year for five years – in the federal tax on fuel. That tax increase– 24.4 cents on diesel, 18.4 cents on gasoline, unchanged since 1993 – is the “third rail” of Republican politics.

“For years, the Chamber has put an idea on the table – a modest increase in the federal gas tax, which hasn’t been raised in 24 years,” Donohue said. “It happens to be the simplest, fairest, and most straightforward solution. Maybe that’s why it hasn’t passed! We’re open to other ideas. Put them on the table. Let’s have the tough conversations.”

The Chamber’s economic forecast is 2 to 2.5 percent economic growth this year with inflation “subdued,” perhaps just above 2 percent. Donohue predicted the Federal Reserve would raise interest rates twice this year. A rising dollar may hamper exports, he added, while helping consumers at home.

“That level of growth is nothing to celebrate,” Donohue said of his 2-to-2.5 percent economic growth forecast. “It is not enough growth to make even a dent in the funding shortfalls in our economic entitlement programs or slow the growth of the national debt.”

Such entitlements and interest payments make up 70 percent of discretionary spending by the U.S. federal government, Donohue estimated. “And this number is going to increase and increase over the coming years.”

“Our nation’s top priority must be to expand economic growth,” Donohue said. And he set a goal of a 50 percent increase in economic growth from 2 to 3 percent.

 “Growth is not just a proposal or a bill – growth is a philosophy,” he said. “Growth is a choice—and not always an easy choice. It’s time we all rally around and choose growth.”

Donohue promised to “pull every political lever we have to achieve the growth we need.”

Among the priorities the Chamber is backing in 2017:

• Regulatory relief and reform. “No one has been hurt more by this overkill than small companies,” he said. “The regulatory branch (of government) is holding our small businesses back.” Donohue singled out Obamacare and the Dodd-Frank banking laws to be gutted or replaced.
• Increased domestic energy production. “We’ve got to prudently develop the abundant natural resources this country has been blessed with,” Donohue said. “We can unleash more growth.
• Major tax reform. “It only comes once in a generation. But if we’re lucky, we might get it done,” Donohue said. “We need to lower the business tax, which is the highest in the industrialized world, if you count state taxes.”
• Increase international trade, which supports 40 million U.S. jobs. Donohue wants greater exports, tougher enforcement on intellectual property laws and more “efficient, seamless and safe movement of goods across borders.” The 23-year-old North American Free Trade Agreement (NAFTA) needs to be modernized. “If we’re going to hire Americans, we’re going to have to sell American—sell our goods and services to the 95 percent of the world’s customers who don’t life in the United States.”
• A well-education and well-trained U.S. work force. “We need new thinking when it comes to training U.S. workers for jobs of the future,” he said. “You can make a damn good living doing many of these jobs.”
• Fix the “broken” U.S. immigration system through “sensible” reforms. Improving security and enforcement would help economic growth and businesses.
• Reducing excessive litigation. The Chamber’s legal arm is opposing what Donohue called “legal extortion” through what Donohue called frivolous lawsuits.

Donohue promised to create a “small grass roots army” of 400,000 Chamber-related entities to pressure Washington on these reforms. “It is real populism because it is open to all people,” Donohue said.

For its role, Donohue promised the Chamber put keep the pressure on the new Republican-dominated government to focus on economic growth.

“Make growth a priority and a part of every decision,” Donohue urged lawmakers on Jan. 11 to a packed house at the Chamber’s Washington headquarters across the street from the White House.

“But don’t misunderstand—government cannot create wealth or generate growth” he concluded. “It cannot grow the pie. It can only rearrange it, and more often it shrinks the pie for everyone.”

It is American free enterprise – embodied in some 30 million businesses of every size—that spurs growth, generates the wealth, creates jobs and expands the opportunities,” Donohue concluded.