9 CEO Responses To The State Of The Union
In an interview with CNBC, AOL co-founder Steve Case suggested current bi-partisan support will soon enable comprehensive immigration reform with a “strong, robust high-skilled immigration component.” Though some worry such reform could be harmful to unemployed Americans, Case, who was a member of the president’s Council on Jobs and Competitiveness, suggested otherwise:
“The data shows immigrant entrepreneurs are typically job makers who create companies that create jobs, not job takers . . . The economy is driven by young, high-growth startups. Forty percent of the Fortune 500 companies were started by first- or second-generation immigrants, and about half of the technology companies now are started by immigrants.”
Case referred to reforming high-skilled immigration as “winning the battle for talent,” a victory that is central to helping America “remain the world’s most entrepreneurial nation.”
Caterpillar’s Oberhelman also agreed with comprehensive immigration reform, describing it as a “wonderful win for all of us,” should it happen.
Peebles also told CNBC that while the State of the Union seemed unifying, “the work [the president] is asking Congress to do is an insurmountable task.” He cited the extremely controversial nature of the issues at hand and how “Congress just doesn’t work that way.”
Peebles agreed that gun control and some education and housing reforms might be addressed sooner than later, but crucial issues like spending and entitlement reform may unfortunately take several years to develop.
“The financial markets in the business community and especially the entrepreneurial community . . . have just been asked to pay more. We’ve had hundreds of billions of dollars of tax increases just take place last month. So the expectation now is that there is some spending and entitlement reform. This country cannot continue going down the path we’re going down now, spending way beyond our means . . . I don’t think it’s a question about fair share. We’re all Americans. We’re all trying to do our part, but we have to modernize our entitlement system. It’s out of date. It is unsustainable and we have to do something about it. And that’s not a Republican or Democratic idea, that’s an American idea.”
Oberhelman also indicated a desperate need for lasting entitlement reform.
While entitlement reform isn’t likely to be a swift process, business leaders seem fidgety in the meantime as they specifically anticipate the uncertain outlook for mandated health care.
Following the SOTU, Aetna CEO Mark Bertolini told CNBC he was wary of whether the president’s statements on health care could hold any water.
“I think it’s a great admission on the part of the president that health care costs are driving a major portion of our deficit, and I think some of the things he mentioned were appropriate about changing payment and changing the way our entitlement programs work,” Bertolini said. “I think those are all ideas, however, that have been on the table for a long time. What does it take to get the words into action?”
In an illustration of his frustration, Bertolini described the process of entitlement reform as “a waiting game” that’s taking too long to find which partisan group will break first.
“We need to get to a place where both sides can agree and both take the pain that it’s going to take to make these kinds of changes,” he said. “The private sector is going ahead and addressing it now. But having Medicare along, which pays for more than 50 percent of health care costs in the provider revenue model, I think would be a huge help.”
Because the outcome for health care is unclear, Aetna has already restructured provider relationships and moved ahead with layoffs in several departments. Bertolini continued:
“Until we know what the future looks like, we’re going to be very cautious about how to release for further employment and how we release for [capital expenditure].”
Commenting on this current climate of concern and fear, John Mackey, CEO of Whole Foods particularly pointed to the recent mandate for health coverage of those working 30 hours or more. The effect, he told CNBC, has prompted businesses to hire fewer full-time workers, more part-time workers, and often, to lower wages across the board.
“If you take it out of one bucket, it’s got to go from somewhere else,” Mackey said. “So it hasn’t been good for us. I can’t speak for other businesses. I mean could it work out? Sure. It’s been my experience though that bureaucracies are not very flexible, and they don’t usually have great outcomes.”