Gov. Mike Beebe issued a challenge Tuesday to the U.S. Congress and the White House, saying some economic development projects are on hold because of economic uncertainty related to the nation’s financial landscape.
In Fort Smith to speak at the rollout of the Fort Smith Regional Alliance, Beebe said the Arkansas Economic Development Commission has about 60 “open files” on companies or individuals interested in expanding. He told the more than 300 in attendance at the Fort Smith event that some of those prospects are interested in the Fort Smith region. More importantly, he noted that some are ready to go, but are instead “just sitting on their money” because they are “afraid of tomorrow.”
In short, uncertainty about economic health and lack of confidence in the leadership in Washington D.C. is slowing investments in Arkansas and other states, Beebe said.
Also in the Fort Smith audience were U.S. Sens. John Boozman, R-Ark., Mark Pryor, D-Ark., and U.S. Rep. Steve Womack, R-Rogers. Beebe, a Democrat, praised all three men, saying Boozman is a “class gentleman,” and Womack is “my kind of guy … because he gets things done.”
“But,” an animated Beebe said, “Washington has got to get their act together.”
He suggested Washington has a “systemic problem” resulting from the power that House and Senate political leadership has with respect to committee assignments, office space selection and a wide range of other perks. That power often prevents the two sides from having a working relationship.
Beebe’s obvious aggravation at Washington politics mirrored that expressed by Standard & Poor’s on Aug. 5 when it downgraded the U.S. credit rating from AAA to AA+. The U.S. has held the top AAA rating for more than 70 years.
“The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics,” noted the S&P downgrade report.
Continuing, S&P wrote: “More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.”
Beebe told the crowd that he is not “naive enough” to think the words of one southern governor will get Washington’s attention, but he said more governors are of the same opinion and may soon become more vocal in the hope they can “melt away” the uncertainty.
In an interview after his public remarks, Beebe said an example of the uncertainty is in the wind energy sector where Congress extends tax credits for just a year or two. With Arkansas’ economy benefiting from several wind-energy related companies — to include Mitsubishi in Fort Smith — Beebe said Congress must provide more long-term assurances to companies making long-term investment decisions.
Beebe also said he believes the National Governors Association “will undoubtedly” at some point formally express a collective frustration about economic uncertainty fueled by Washington politics.
Jodi Omear, director of communications for the NGA, said governors have “called on the federal government to get its fiscal house in order and to work cooperatively with states to reduce deficits, restore fiscal discipline and promote economic growth and long-term prosperity.”
Omear said this fall the NGA will focus on finding “additional savings” at the federal level.
“Gov. Beebe has been a leader at NGA and always looks for ways to find bipartisan, consensus solutions to challenges. To the extent that there is an opportunity to engage on this issue where governors have broad consensus, we will certainly do that,” Omear noted.
Pryor agreed with Beebe’s assessment, and said the “negative cycle” will end only if a growing number of Senate and House members “decide they want to get something done.”
Pryor said the level of partisanship from Democrats and Republicans is “pretty bad,” and hopes the S&P downgrade will force more in Congress to take more significant action. Reaching back into political history, Pryor said President George W. Bush “had a chance to reset politics” after Sept. 11, 2001, and reduce the partisan gamesmanship.
“But he didn’t,” Pryor said.
Womack said Arkansas’ Congressional delegation — four Republicans and two Democrats — is “very collegial” and works well together to support Arkansas issues and projects. But when national issues arise, the “fringe elements” demand House and Senate members to “stand on their principles while the country implodes.”
Womack said he agreed with the S&P action, and hopes it helps end the “polarized, ideological divides” now the norm in Washington.
Michael Tilley with our content partner, The City Wire, is the author of this report. He can be reached by e-mail at firstname.lastname@example.org.