Uncertainty, risks darken outlook for 2016 U.S. economic growth, U.S. Chamber boss predicts
January 15, 2016
Freight transportation shippers and providers are facing a year of uncertain economic growth in a presidential election year filled with “extraordinary” economic, political, and geopolitical uncertainty and risks.
That’s the word from U.S. Chamber of Commerce President and CEO Thomas J. Donohue in his annual “State of American Business” address. Because of that uncertainty, U.S. businesses need more pro-growth lawmakers and better policies to create jobs, stimulate growth, raise incomes, and increase opportunities for Americans, he said.
“The state of American economy may be risky but the future is bright as long as Washington politicians concentrate on pro-growth policies combined with common-sense regulations,” Donohue said.
The Chamber is predicting tepid 2 percent growth in Gross Domestic Product, causing Donohue to say, “Businesses small and large are not finding much to cheer about as we start the New Year.”
“We’re entering the seventh year of the weakest economic recovery since the Great Depression,” he said. “We can and must do better. With the right policy changes and reforms, as well as the election of a pro-growth Congress this November, we can significantly improve our prospects for growth, jobs, and opportunities for Americans.”
Donohue applauded Congress and the White House for a productive 2015 that saw passage of meaningful legislation addressing Chamber priorities including a multi-year highway bill, cybersecurity legislation, education reform, permit streamlining to speed up project approval, an end to the oil export ban, reauthorization of the U.S. Export-Import Bank, and the permanent extension of several tax provisions and multiyear extensions of many others.
Although the Chamber sits out the presidential race—“We don’t do presidential politics,” a U.S. Chamber spokesman said. “We do presidential policy.” – this year the Chamber is focusing on five key areas where it feels it can get the biggest bang for its bucks:
Domestic politics (not Presidential): Although it tilts heavily Republican in state and local races, the Chamber says it will focus on electing the “right representatives” with a pro-business agenda. Donohue says it is looking to back candidates who “want to come to Washington to govern, not shut the place down.”
Regulations: Reining in the regulatory state, which Donohue says is out of control. He cited specifically anti-growth climate and environmental regulations, financial rules such as the Dodd-Frank amendment, Obamacare, which Donohue says is costing U.S. businesses “a small fortune.”
Expanding trade: Donohue says more than 95 percent of the world’s consumers live outside the United States, and more than 38 million American jobs depend on trade. Selling more American goods and services abroad would be a boon to U.S. businesses, especially small companies, while creating countless jobs for workers and revitalizing entire communities.
Supporting American energy: The Chamber is backing expanding all sources of energy, including coal and nuclear. Selling abundant resources abroad could create millions of jobs and keep consumer prices low.
Advancing fiscal and entitlement reform: Noting that soon 77 percent of the federal budget will go to Social Security, Medicare and Medicaid. Donohue vowed that the Chamber will continue to be a fierce and relentless advocate for stronger economic growth, limited government, and the principles of American free enterprise that built the nation.
The end of 2015 produced several bipartisan victories. These include expanding trade promotion authority, ending the ban on U.S. oil exports, a multi-year transportation bill, education reform bill, a bill to restore the Export-Import Bank, tax reductions, cybersecurity legislation, among others.
“I know how fashionable it is to beat up on Washington,” Donohue said. “The fact is both parties all deserve some credit for progress made at end of 2015. We did it when everybody said it couldn’t be done.”
But more work remains to increase the rate of economic growth, which remains low compared to previous decades.
“A vibrant private sector working in a free enterprise system built the greatest economy on earth—and working together we can restore it,” Donohue said. “We must reject the idea that government has all the answers or that we can isolate ourselves from people, trade, ideas, capital, and responsibilities across the globe.”
“Business leaders large and small wake up and say to themselves, ‘What the government is going to do to them today?” Donohue said. “The current administration is on a regulatory tear and this will continue until the moving van backs up to the White House next January.”
To be fair, even President Barack Obama wants to cut down Washington red tape. During his final State of the Union speech, the president said: “There are outdated regulations that need to be changed. There is red tape that needs to be cut.”
But Donohue said it’s not just the federal regulatory system that is out of control. States are issuing new mandates and regulations, laying more costs onto businesses that can hardly afford them.
“One day unless there is reform, this whole house of cards could collapse,” Donohue warned.
Meanwhile, he said, “Europe is barely keeping its head above water, Japan is stagnant and the biggest question mark is China. Who says China could never have a recession of its own? This is a huge uncertainty for the global economy.”
Donohue said the 2016 election is more than just an election – it’s a debate over our economic future. “The left tells us our economy is hopelessly rigged. From the right, we hear of crony capitalism. Really? That’s not the Washington I know, and I’ve been around here a long time,” the 78-year-old Donohue said.
Quoting Winston Churchill, Donohue said some politicians regard private enterprise as if it were a predatory tiger to be shot. Some see it as a cow to be milked.
“Only a handful see it as it is—a strong horse that pulls the cart,” Donohue said. “It’s time to recognize that business can be sturdy horse pulling the whole cart forward, Just give us a chance to show us what we can do.”
The 2016 business outlook is filled with uncertainty, risks and challenges, he said. “Our country’s unmatched potential and talent is going untapped,” Donohue concluded. “Millions of unemployed and underemployed are sitting on the sidelines. We have got to get them back on the field and in the game.”
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