Colorado executives would like to see Washington, D.C., provide clear direction on regulations and taxes, lay out a realistic plan to tackle federal deficits, and end partisan infighting.
That in a nutshell describes what chief executives of some of the state’s largest companies, along with a few smaller ones, recently told The Denver Post.
U.S. corporate profits have rebounded to pre-recession levels, and non-financial firms are sitting on record piles of cash they aren’t spending.
That lack of spending and hiring has kept the U.S. unemployment rate stuck above 9.5 percent since August of last year, sapping consumer confidence.
Mixed signals coming out of the beltway are part of what is hurting business confidence, executives said.
“Everyone knows that real, lasting change takes time,” said Mike Fries, president and CEO of cable television provider Liberty Global. “But in the absence of clear leadership and direction, our instinct is to hit the pause button.”
Seeking certainty
Executives said the political establishment needs to build confidence rather than chip away at it, to provide clarity rather than confusion.
“More than ever, Congress and the administration must work in a bipartisan, fiscally responsible manner to provide certainty to businesses, especially regarding regulation and taxes,” said Larissa Herda, CEO, chairman and president of tw telecom, which provides Internet service for businesses.
One area that needs to happen fast is with a wide range of tax cuts set to expire this year, said Gregory Maffei, CEO and president of Liberty Media Corp.
“The president (and Congress) should immediately create a more business-friendly environment by providing certainty on what taxes will be in 2011,” he said.
Maffei also wants regulations reduced, starting with the elimination of increased reporting requirements on the 1099 tax forms. That provision is one of several contained in the health care reform package passed earlier this year.
“Admittedly the health care conundrum has everybody frightened,” said Diedra Garcia, president and CEO of DRG Construction in Lakewood. “So much of it is going to fall on the backs of small business. It would be nice to have some clarity and some relief around that.”
“Shake banks loose”
Although some big corporations are flush with cash, many small businesses aren’t. Garcia would also like to see government pressure put on banks, especially those that received billions of dollars in taxpayer support, to lend more.
“I really think, in terms of policy, somebody has to step in and shake the banks loose,” Garcia said. “It just feels like the administration let them off the hook.”
Getting serious about controlling government spending and reducing deficits would put business leaders at greater ease, said Bruce Alexander, president and CEO of Vectra Bank Colorado.
“When I talk to investors and customers, they are concerned about investing when they see the government budget out of control and the deficits so large,” he said.
That isn’t to say executives are opposed to stimulus spending, but they want money spent productively.
“Government investment in infrastructure and innovation would also help create jobs,” said R. David Hoover, chairman and CEO of Ball Corp. “Lessen unnecessary uncertainty and promote growth, and the private sector will respond.”
Every issue the public sector tackles should be weighed against the question of “will this decision make us more competitive globally or less competitive?” said Ken Tuchman, chairman and CEO of TeleTech Holdings.
“Education funding is a perfect example — cutting funding today provides short-term savings but bankrupts our ability to create a world- class workforce,” he said.
Hikmet Ersek, who recently relocated from Europe to Colorado to head money-transfer giant Western Union, said the U.S. needs to deliver a world-class education so its workforce can adapt to a “constantly changing environment.”
Fed up with partisanship
Several executives said they would like to see “partisan sniping” set aside long enough to address long-term issues.
“We need real leadership to address issues that are long overdue, like the budget, education and our international competitive position,” said Kent Thiry, chairman and CEO of DaVita Inc., a provider of kidney dialysis treatments.
Hoover would like to see tax policies that harm U.S. manufacturers removed and trade barriers in foreign markets lowered.
Tuchman said $1.8 trillion in corporate cash and securities are sitting in offshore accounts, partly because of punitive tax policies.
“We need to find a way to bring that money home,” he said.
One executive asked that politicians stop vilifying business to score political points.
“They treat us as the enemy when we are a vital industry. The name-calling has got to stop,” said Tim Marquez, CEO and chairman of Venoco Inc., an oil and gas producer.
The administration has emphasized alternative energy sources, but that doesn’t mean it has to disparage traditional sources of energy, he said.
The aftermath of the BP oil spill in the Gulf of Mexico has triggered a wave of new regulations.
While the petroleum industry can deal with regulations, government should provide an expedited way to comply with them, he said.
Approvals that should take three or four months are taking four or five years, he said.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
