Business Leaders Urge Compromise On Tax Fight
Weekend Edition Sunday host Rachel Martin speaks with Tom Wilson, the president and CEO of the Allstate Corporation, about the government's automatic spending cuts and tax increases scheduled for the end of the year. Wilson is a member of the CEO Fiscal Leadership Council of the Campaign to Fix the Debt.
RACHEL MARTIN, HOST:
This is WEEKEND EDITION from NPR News. I'm Rachel Martin. The U.S. economy added more than 140,000 jobs last month and the nation's unemployment rate ticked down to 7.7 percent. But the current budget debate in Washington has clouded that potentially good bit of news with a lot of uncertainty. At the end of this year, the government will automatically enact a series of large spending cuts and tax increases. Many analysts say that could seriously weaken the economy. A group of business, economic and political leaders have come together to urge compromise to avoid the so-called fiscal cliff and also reduce the national debt. They call themselves the Campaign to Fix the Debt. One of the members is Tom Wilson. He is the president and CEO of Allstate Corporation. And he joins us on the line from his office in Northbrook, Illinois. Mr. Wilson, thanks for being with us.
TOM WILSON: It's great to be here, Rachel.
MARTIN: So, I'd like to start off by talking about the latest jobs report. It appeared to have a little bit of good news in there. The unemployment rate did tick down, but I'm wondering how you see the state of the economy writ large right now? How's your business doing?
WILSON: Our business is doing quite well. But, of course, most people have to buy insurance. I am concerned about the economy. While the unemployment rate is down, there are too many people who are not productively employed, they're not in the jobs they want to be and there's a bunch of people who have dropped out of the labor force as well.
MARTIN: So, if Washington doesn't reach a compromise, if the automatic spending cuts and tax hikes do go into effect, walk us through what that would mean.
WILSON: I believe that the delay today has already had a negative impact on the economy. Because businesses have already done their plans. People are cutting back because of this uncertainty. And so we will not have a whole lot of growth in the beginning of next year. If they don't get it done by the end of this year, we're really putting the end of 2013 and 2014 at risk.
MARTIN: Are you making plans if the country does go off the so-called fiscal cliff? Are you preparing for that?
WILSON: We will not have to reduce employment if we go off the fiscal cliff because our volumes will stay pretty much the same. That said, people we invest in - we have about $100 billion portfolio - I know that they are already making plans and, if approved, budgets to cut their employment.
MARTIN: One of the sticking points in this whole debate has been over taxes. President Obama says the tax rate for the highest earners has to go up. What's your take on that? Would raising the tax rate affect business writ large, and your business in particular?
WILSON: Well, as you mentioned, I'm part of the Fix the Debt group and we believe that this needs to be fixed both in a short and a long term. Part of it is raising revenues. Part of it is reforming entitlements and part of it is cutting spending. So, there's three components to it. Everybody's agreed that we should raise revenues - the Republicans and the Democrats. I don't understand why they're fighting over how we get the money. They should be deciding how much money we're going to get rather than fighting over whether it comes out of the left pocket or the right pocket.
MARTIN: The battle over the debt ceiling last year went right up until the last minute. It looks like this current negotiation may do the same thing, it may last right up until the deadline. Can the country handle any more of these long budget fights?
WILSON: I think the deadline was a month ago because people are already making their plans. If you're going to go over a cliff - if we use that analogy - you don't run right up to the cliff and stop in the end. You slow down before you get there. That's what people are doing today. We need to get this fixed. I think on a longer-term basis, Rachel, what we need to do is seek compromise. Seventy-five percent of America says we just want you to make a deal. Look, we make compromises every day in our life. You need to make compromises in what you're doing so that the economy moves forward.
MARTIN: Based on the conversations that you've had with policymakers, what's your gut? What do you think's going to happen? Are you optimistic?
WILSON: Oh, my gut is I'm concerned because while they seem to be playing it out in the headlines as opposed to sitting down and talking to each other. Secondly, they don't appear to trust each other. And if you're not talking on a balanced way, don't trust each other and don't try to find a way to make it a win-win. In every negotiation I've been in, when you approach it from a how do I make the other person successful so that they can make me successful, you get to a good place. In this particular case, they seem to want it to be a win-lose. That's what concerns me.
MARTIN: That's Tom Wilson. He is the president and CEO of the Allstate Corporation. He joined us from his office in Northbrook, Illinois. Mr. Wilson, thanks so much.
WILSON: Thank you, Rachel. Transcript provided by NPR, Copyright NPR.