As soon as the final vote is counted on Election Day 2016 and irregardless of which candidate wins the White House, Americans will begin demanding answers. They want solutions from the next President to revive a still struggling economy, which - despite now being near full employment - has yet to produce substantial wage growth and equitable economic growth.
A Gallup poll released on September 15, 2016, reveals American voter’s #1 concern remains the economy.
This report lays out recommendations from business leaders across the country for the next President.
The Kogod School of Business at American University asked a wide range of business, government and economic experts nationwide one simple, non-partisan question:
“If you were called to the White House in January and asked by the new President for one (1) recommendation on a policy action or new law to help grow the economy, what would it be?”
We first posed this question to Jamie Dimon, CEO of JP Morgan Chase, at a Washington forum in April. Dimon responded that “there is no one single step” the next President could take to “fix” the economy, but that – instead – several remedies are needed. We agreed – and decided it was a question well worth posing to others.
From June through August of this presidential election year, we gathered feedback from Fortune 500 CEOs, Washington area leaders, small business owners, start-up founders, and local and state government officials. We sought answers from small and large businesses in all 50 states, and every industry, including manufacturing, real estate, financial services, non-profits, education, energy, retail and more. The answers we received may surprise many:
We took our initial findings to both the Republican National Convention in Cleveland and the Democratic National Convention in Philadelphia to discuss what business leaders there believe are the most pressing and immediate problems to address. These findings will be released in an upcoming separate report.
TEN out of the 50 LEADERS in this report listed infrastructure projects and spending as their single top action item they would urge the next President to take. The range of respondents picking infrastructure projects and spending as their top recommendation was also notable, including corporate CEOs (Marriott’s Sorensen, Clark Enterprises’ Nussdorf and Hilton’s Nassetta) and small business owners (Maine financial services firm CEO Simpson). From GOP state lawmakers (Averitt in Texas) to liberal-leaning nonprofit leaders (water conservationist Samson) to a former Homeland Security official who directed infrastructure security for the White House (Darnell). A major water technology CEO (Baker in Minnesota) cited not just building roads and bridges but building a better national communications infrastructure (as did Leonsis).
Often included on longer lists of economic stimulants, infrastructure has not been the single top priority item in this election. In fact, numerous reports lament the lack of attention being given the nation’s crumbling infrastructure. Both Donald Trump and Hillary Clinton listed infrastructure in their more recent economic plans as big ticket items - but not their top priority.
A total of EIGHT RESPONDENTS listed workforce development, education programs, and other programs designed to raise outcomes and improve the United States’ competitive edge. But the specifics were varied: “equitable education” said one small business, while creating new tax-free savings accounts for newborns for college tuition was suggested by Motley Fool’s Gardner. But the consensus around this overall topic as a key economic action item was notable.
Tax Reform was cited as the priority in SIX recommendations, and as part of an overall incentives package for businesses in at least FOURTEEN of the recommendations. There was little consensus on specifics, though. Some tax recommendations even directly contradicted each other. Small business incentives were focused on spurring innovation, access to capital, targeting tax incentives, reduced regulations, and certainty in government policy beyond “one year fixes” to budget issues in Washington.
THREE of the 50 respondents cited immigration reform as their top economic growth recommendation, but - like tax reform - at cross purposes, divided as to whether loosened or tightened restrictions were the better response for economic growth.
FOUR of the 50 respondents listed bringing down still high healthcare costs as their top recommendation, while providing little to no specifics on solutions.
ONE respondent, Advisory Board CEO Robert Musselwhite, suggested the President grow the economy by focusing on homelessness. He viewed housing as a broader gateway to other economic gains, noting the ripple effect it could have on education achievement, reduced healthcare costs, and other beneficial social and financial outcomes.
While we did find key areas where our surveyed CEO's and business leaders found commonality (i.e.-infrastructure; workforce development), there were also notable individual responses. While these stood alone in the report's final tallies, they are issues of importance and merit both debate and further consideration by the new White House and Congress, including:
* CRACK DOWN ON CURRENCY MANIPULATION - Fields, Ford Motor Company;
* PRIVATE SECTOR CYBERSECURITY PENALTIES - Murphy, Cyber Safety Harbor;
* CONVERT LARGE FARM SUBSIDIES TO SCHOOL LUNCH SUBSIDIES - Andrés, ThinkFoodGroup.
The formation of new trade pacts is commonly voiced as a priority in our nation’s economic growth; however, not one leader we contacted told us focusing on international trade pacts was a top economic growth recommendation for the next President.
Overall, the recommendations in this report signal that there are pockets of agreement potentially emerging in Washington. And with this consensus shared across a widening spectrum of respondents, action may even be possible in the new year.
Signs of growing consensus around both INFRASTRUCTURE and EDUCATION AND WORKFORCE DEVELOPMENT for economic growth suggest that these issue could leapfrog other more frequently cited economic growth policies as action items in 2017 - by both the next White House and Congress.
The lack of consensus in our report over which types of TAX INCENTIVES and IMMIGRATION and HEALTH CARE reforms would best grow the economy (and have the backing of business leaders) suggests those items may move down the list of Washington priorities in 2017.
Also in this report, there are also numerous individual recommendations we believe merit debate and discussion - not only in this Presidential campaign, but in living rooms, classrooms, boardrooms and policy corridors across the country. Only through a far more thorough examination of the recommendations put forward in this report can we truly have an open debate about the best ideas to grow the American economy.
Rebecca Cooper, Kogod School of Business
September 22, 2016