Starbucks' (SBUX) Chief Executive Officer Howard Schultz has a solution for the nation's partisan political divide that's prevented (so far) a substantive, long-term plan to cut the budget deficit: boycott donating to political campaigns.
"I am asking that all of us forgo political contributions until the Congress and the president return to Washington and deliver a fiscally disciplined long-term debt and deficit plan to the American people," Schultz wrote in an e-mail sent to business leaders that was obtained by Bloomberg News.
Schultz encouraged fellow business leaders to "voice your perspective publicly" and said "businesses need to do all they can to accelerate job creation." Starbucks shares closed Monday up $1.06 to $28.42.
Currently, the United States is short about 14 million jobs, with an intractable 9.1 percent unemployment rate. The number of jobs needed to return the United States to full employment is actually close to 20 million jobs, if one includes part-time employees who want full-time work who can't find it.
The U.S. Congress passed and President Barack Obama recently signed a $2.4 trillion, 10-year debt deal that calls for about $900 billion in agreed-to deficit reduction, with about $1.5 trillion in deficit reduction project to be identified by Thanksgiving by Congress' new 12-member, bipartisan "super committee."
Despite the above modest first step on the debt, some in Wall Street, economics, and now corporate circles want more progress on debt reduction. For example, due to Tea Party faction pressure, the signed debt deal contains no revenue increases from tax code changes or outright tax increases. Some economists say the only way to eliminate the budget deficit and national debt in an enduring way is to include a tax increase; they say a better debt reduction program would call for at least $4 trillion in debt reduction over 10 years, including a revenue increase.
Political/Public Policy Analysis: Chances are the very conservative Tea Party faction of the Republican Party may cry foul, and accuse Schultz of siding with the Democrats. The reason? The Tea Party sacrificed very little in the debt deal talks --it essentially won the debate by getting most of their cuts -- without a tax increase. Its partisans may view Schultz's call as a back-door way to go after taxes.
That said, Schultz is on-the-mark with his request -- more should be done to cut the deficit -- and if it takes a cut-off in political contributions, so much the better