WASHINGTON — The head of the nation’s largest business group on Wednesday said the U.S. has a “once in a generation chance” to reshape a slow-growing American economy, but he also cautioned that a golden opportunity could be lost if stiffer trade barriers get in the way.
Thomas Donohue, president of the U.S. Chamber of Commerce, outlined a series of initiatives that he said would bolster the economy, such as tax cuts, regulatory relief, and more spending on public works.
President-elect Donald Trump and a Republican-led Congress said they plan to accomplish those goals early in the new administration — and that’s music to the ears of America’s corporate chieftans.
“Business is optimistic because we see a once-in-a-generation opportunity to enact major reforms that could transform the American economy from a low-growth to a high-growth economy,” Donohue said in a largely buoyant address.
The economy has grown just 2.1% a year since exiting the Great Recession in mid-2009, well below the post World War Two average of 3.1%. The U.S. has failed to reach 3% growth for 11 straight years, the longest stretch ever.
Donohue acknowledged the U.S. economy is in good shape after eight years of recovery, with steady growth, low inflation, higher stock prices and rising confidence among businesses and consumers.
Yet in a veiled shot at outgoing President Barack Obama, Donohue argued that the slowest recovery on record is the result of decisions by the administration to “put other priorities ahead of growth.”
He took particular aim at two laws, Dodd-Frank and the Affordable Care Act, commonly known as Obamacare, that he asserted acted as chokeholds.
“The regulatory overkill we have seen over the last eight years, no one has been hurt more by this overkill than America’s small businesses,” he said.
Still, Donohue warned that progress won’t happen overnight. “Good intentions are fine, but policymakers still must deliver the goods. That could take some time.”
In 2017, Donohue predicted the economy will grow 2% to 2.5%, somewhat faster compared to last year.
“We shouldn’t breathe a sigh of relief,” Donohue said in his annual State of American Business address. “That level of growth is nothing to celebrate.”
Although “growth won’t solve all our problems,” Donohue said, he called on both parties to focus on the economy as the best way to boost hiring, raise incomes, improve schools, rebuild the military and help inner cities, among other things.
“We believe many Democrats will want to be constructively involved as well,” said Donohue, noting that 25 Democratic senators are up for reelection in 2018, many in states that Trump won handily.
Donohue, a longtime Washington fixture, said the government could help drive growth this year by aiding the development of the country’s energy industry and investing more in roads, bridges, airports and other public works.
Yet the Chamber of Commerce chief cautioned the incoming administration that erecting barriers to global trade would slow growth in 2017.
He said the U.S. would lose out to rivals if it doesn’t find other ways to achieve the same economic goals of the moribund Trans-Pacific Partnership. And he pointed to the importance of the 23-year-old North American Free Trade Agreement despite flaws.
“Remember that our trade with Canada and Mexico supports 14 million American jobs,” he said. “And much of that trade depends on NAFTA.”
Many foreign observers are especially keen to find out what Trump has in store after a campaign in which he harshly criticized both free-trade deals as costly millions of American jobs and damaging the U.S. economy.
“Norway and the U.S. are important trading partners, so it’s important for us to know and learn about the prospects” for 2017, said Norwegian trade counselor Paul Somdalen, who attended the speech.
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