Thomas J. Donohue, U.S. Chamber of Commerce

Thomas J. Donohue

A Voice for American Business

Editors’ Note

Since assuming his position in 1997, Thomas Donohue has aggressively advanced the American Jobs and Growth Agenda, as well as spearheaded the creation of the Campaign for Free Enterprise. Donohue established the U.S. Chamber Institute for Legal Reform and has dramatically expanded the activities of the U.S. Chamber Litigation Center, the Chamber’s law firm, and the U.S. Chamber of Commerce Foundation. Previously, Donohue served for 13 years as President and CEO of the American Trucking Associations. Earlier in his career, he was Deputy Assistant Postmaster General of the United States and Vice President of Development at Fairfield University in Connecticut. He served on the board of Union Pacific Corporation. Donohue earned a bachelor’s degree from St. John’s University and a master’s degree in business administration from Adelphi University. He holds honorary degrees from Adelphi, St. John’s, Marymount, and Bradley universities, as well as the National University of Ireland at Maynooth. He is a 2013 recipient of the Horatio Alger Award.

Organization Brief

The world’s largest business federation, the U.S. Chamber of Commerce (uschamber.com) represents the interests of more than three million businesses of all sizes, sectors, and regions, as well as state and local chambers, and industry associations.

What are the key priorities that the U.S. Chamber of Commerce needs to address to further its agenda?

There are items that need to be addressed by the business community, both domestically and internationally, and items that need to be addressed by Congress, the Administration, and others.

It may appear that unemployment has gone down but we’re not documenting how many people have given up looking for jobs. This isn’t a problem where the government can just spend money on it or wave a magic wand and make it go away.

We need government and business working together to remove the obstacles to job creation. One of the realities we face is that nothing sits still. There are people in regulatory agencies in this country who are coming out with proposals for restrictions and controls on various industries and industry groups. These may be well-intended but are going to make things worse.

We’re asking government to reform the regulatory process. This means going back to Harry Truman’s time when we invented this and making some adjustments for an economy that now has instant communication and global engagement.

This also includes the Dodd-Frank bill, which we’re not trying to get rid of but it was written in haste. We have to go back and fix some of its elements that aren’t working.

In nine years, the most predictable crisis that we will have will be a federal budget over $6 trillion.

This involves both the structure of regulation and the actual regulations. The ones that worry me the most are those that involve the environment, water, and food, where government is trying to take over all of the decisions affecting these areas.

We also need to recognize that the U.S. has a huge blessing in that it has massive amounts of energy like oil, gas, coal, nuclear energy, and a growing amount of green energy. If we look at this as an asset and a job creator, and do so in a way that is environmentally acceptable, it provides us with a major opportunity to fully address the question of business development and jobs.

In nine years, the most predictable crisis that we will have will be a federal budget over $6 trillion – about 80 percent of which will be spent on entitlements and interest on the debt, which the government thinks they will be able to pay off at 4.64 percent. These looming obligations include Social Security, Medicare, Medicaid, and military pensions and healthcare.

This means that less than 25 percent of the budget will be left to do everything the government does at home and abroad, including the military. It’s difficult to get Democrats or Republicans to look at this issue, but they have to because the money is going to run out.

We also have to look at our other assets, which are the extraordinary companies and industries that we have in this country.

Twenty-two years ago we had the last increase in the federal fuel tax. With fuel down $1.45, would a few more dimes put us out of business? I don’t think so, but it would make sure that the federal government had their piece of that revenue in place. It could also mean that the state and local governments that are putting their money up would be willing to come to the table on a three-part deal with the national government to improve infrastructure. This could put a lot of people to work, reduce accidents, and increase our productivity and efficiency. Many say this shouldn’t be done because it’s a tax, but it’s really a user fee – if you don’t use it, you don’t pay it.

We also need to address human capital – we educate the smartest people in the world in our universities, which are the best in the world, and then we send them back home.

Everybody says we have to bring the manufacturing industries back to the U.S. to put people to work. However, we’re so efficient at manufacturing in this country that, across the board on average, we have taken 37 percent of the jobs out of the manufacturing process and they’re never coming back. In fact, we will probably take out more jobs due to information technology, robotics, process engineering, supply-chain management, etc.

This has created a cadre of people in this country who can’t find jobs they are trained for and a significant number of jobs without properly trained people to fill them.

The President raised the issue of inequity – that it’s not fair. I don’t buy that in general. However, I do buy it as it relates to the K-12 education system in this country, where some people are being fundamentally denied an equal opportunity to compete. With this change in the workplace, not only in manufacturing but in everything we’re doing, if you can’t read and comprehend, and you can’t write or count, you can’t work.

This is a serious issue that exists in both the lower grades and the higher ones in good school districts as well as bad ones. We have to face up to this as a nation because it’s critical to our having the educated people we need to make our economy prosper.

This also means there are great opportunities to tell kids in community colleges that they don’t need a B.A. to make $125,000 a year. They can be a great diesel mechanic, or a phenomenal construction or welding talent. These jobs are now all very technical, so we need to train people for those jobs and give them a fair shake.

These issues also relate to immigration: we have to be able to bring people into this country, we have to be able to keep the people we train, we have to be able to know who is legal and who is not, and we have to stop moaning about all of this and get it resolved.

In addition, Dodd-Frank has to be dealt with in terms of making sure that it doesn’t kill the goose that laid the golden egg. One can go into any bank and hear stories about various regulators who are each telling the bank to do things differently.

If we put the capital, the people, the technology, and the education together and start instituting significant changes to the national situation to make us more competitive, there is a much better chance to provide the middle class with better jobs and better pay.

We support entrepreneurs.
We have 300,000 members but we represent the interests of three million businesses of all sizes, sectors, and regions.

Is the regulatory environment in the U.S. hampering the opportunities for entrepreneurs today?

There are between 27 and 30 million small, independent businesses in this country. Entrepreneurship is the reason why one starts and nurtures a new company and then the object becomes to make it a bigger company. Being an entrepreneur is a desire that people with a dream might have; if they can articulate that dream, they can build something.

Are the government regulators screwing this up? Yes. However, they are mostly looking at what is going on in larger companies. Collateral regulation and interruption comes from the labor department in terms of what overtime is going to cost, how many employees you have to pay overtime to, and when you’re going to have to give paternity leave. Regulations like these have a big impact on small companies.

I’m not saying these regulations are good or bad, but the most facile and flexible managers are at small companies in America. They know how to cut costs, spread their money around, and fulfill a contract. The more you try to hobble them with regulation, the harder they work to get around it.

We support entrepreneurs. We have 300,000 members but we represent the interests of three million businesses of all sizes, sectors, and regions, as well as state and local chambers, and industry associations.

Is it hard to be optimistic when you look at where the world is today?

The people we deal with in American business are very diverse and from many different companies, industries, and locations. They have good days and bad days. There is an ongoing problem with increased taxes and regulation, and increased government spending. These can cause many people to decide that it’s time for them to give up on their business dreams. Hopefully, there will be others behind them who are still willing to give it a go.

It’s very hard to be optimistic when you see what is going on with our capital markets, with the explosion of regulation, with the refusal to deal with how we get the workers we need, and with the overkill of regulation regarding the environment and energy. One has to ask, are we all on the same team or is there another group of people who are subversives?

The American enterprise system is great because it always gets up and goes to work. But to sustain that motivation, we have to protect the right of everyone in this country to speak, to criticize, to take issue with, and to demand different things. Today, it seems like we don’t want people to disagree with us, but what made this country great is people coming up with better ideas and debating them with those who might disagree.

Another important issue with all of this regulation has been the emergence of a new view that reflects an aversion to taking a risk; a feeling that we should lock the money in a safe at a bank and not lend it to anybody. We have to take risks or there can be no return and no success, small or large.

Some regulators say we should never involve ourselves in international activities. However, 95 percent of the people we want to sell our products to are located around the rest of the world.

It isn’t about
getting Republicans or Democrats elected; this is about getting people elected who want to govern and work together.

We have to stop this absolute government attack on successful people that is occuring at many levels. This shows an ignorance about how capital is formed. If we take away money from the wealthy, then there is no capital pool and the system falls apart. It is also easy to lose sight of the fact that the wealthy take that money and do good things with it such as investing in universities, hospitals, and charities.

How much can business and the private sector do to really drive change?

When we get involved in races as we did in the primaries and general election for the House and the Senate last cycle, we don’t want to have people nominated who have no interest in governing, have no competence or experience, or who only want to upset the apple cart. Instead, we worked to get better people nominated. If we do that enough times, we’re going be successful. It isn’t about getting Republicans or Democrats elected; this is about getting people elected who want to govern and work together. If we can get more Republicans and Democrats with that view, we can put the middle back in Congress. The Chamber and the business community are involved in the elections and we’re going to work to elect people we think can help.

We’re also spending a fortune on petitioning the government on regulatory issues.

In addition, we’re creating change by our own engagement in business activity around the world. If you stand there and cry about what is going on, and watch what goes by, you’re not going to have an influence. There is only one way to make the boat go faster, and that is to get in it and row. That’s what we’re doing every day in government, in politics, in international affairs, in technology, and in investment. A lot of people are going to try to stop it and regulate it, but that isn’t going to happen.•