Starbucks CEO says 100+ businesses to withhold campaign donations over debt

Schultz (Kin Cheung/AP)

Heads of over 100 major companies have joined Starbucks Corp. CEO Howard Schultz in a pledge to boycott political donations until Congress and the president agree on a long-term debt and deficit plan, Schultz announced in a letter Wednesday.

"Remarkably, the initiative triggered a national dialogue and a groundswell of support," Schultz wrote, adding that in the 10 days since releasing his pledge, he "heard directly from thousands of concerned citizens and was astounded by the volume of support we received through calls, emails, social media exchanges and various other public votes of confidence."

That included over 100 business leaders who signed on to Schultz' initiative, including Myron Ullman of JC Penney, Duncan Niederauer of NYSE, and Walter Robb, co-chief executive of Whole Foods, Tim Armstrong of AOL, Mickey Drexler of J. Crew Group, and billionaire investor Pete Peterson.

Schultz earlier this month issued an internal message at Starbucks reportedly expressing dismay over "the lack of cooperation and irresponsibility among elected officials as they have put partisan agendas before the people's agenda." The response to that message led him on Aug. 15 to issue the campaign donation boycott pledge to business leaders, casting it as a strike to force politicians to act swiftly on the debt crisis and clean up what he views as their dysfunction.

Partisan gridlock in Washington was on full display this summer when Republicans in Congress and the White House sparred over raising the debt ceiling. They failed to reach an agreement until the day before the U.S. was expected to begin defaulting on its debt, causing panic and uncertainty. Ratings agencies have since downgraded the U.S. credit rating.

Schultz' pledge also asks leaders to personally take action by accelerating job creation within their own companies.

Schultz has long donated to Democrats, handing over around $100,000 over the past 15 years to Democratic candidates and committees, according to the Center for Responsive politics. The Center lists a single Republican donation by Schultz: $1,000 to Sen. John McCain in 1999.

On Wednesday, website www.upwardspiral2011.org and an accompanying Facebook page were launched to connect citizens, businesses and organizations over Schultz' pledge.

Conyers, Cleaver urge President to invoke Constitutional authority to raise debt ceiling

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Date: Saturday, July 30, 2011

Contact: Matthew Morgan – 202-225-6906

Conyers, Cleaver urge President to invoke Constitutional authority to raise debt ceiling

President has authority and moral obligation to invoke the 14^th Amendment to avoid economic catastrophe

(Washington) – Today in a letter to President Obama, House Judiciary Committee Ranking Member and Dean of the Congressional Black Caucus John Conyers, Jr. (D-Mich.) and Congressional Black Caucus Chairman Emanuel Cleaver (D-Mo.) called on President Obama to raise the debt ceiling under the authority of the 14^th Amendment. Below is the text of the letter:

July 30, 2011

President Barack Obama

The White House

1600 Pennsylvania Avenue, NW

Washington, DC 20500

Dear Mr. President:

We urge you to invoke section 4 of the 14th Amendment of the United States Constitution to raise the debt ceiling and enable the United States government to meet its financial obligations if Congress fails to act in time. We believe that you have both the authority and a moral obligation to do so in order to avoid an economic catastrophe of historic proportions.

Since the founding of the Republic, the United States has always honored its debts, from assuming the obligations incurred during the Revolutionary War, to the present day. As a result, the United States continues to enjoy an outstanding credit rating and historically low interest rates. We must not allow a political deadlock to cause the United States to default for the first time in our history. The consequences of a default would be catastrophic. All three credit rating agencies have cautioned that default would result in a downgrading of our credit rating and a substantial increase in borrowing costs.

In addition to putting our nation's bond rating at risk along with increase interest rates that it will cause, failure to increase the debt limit would imperil every aspect of the federal government, from Social Security to Medicare, to veterans' health care, to national security. States will lose billions in funding, and businesses will not receive payments on their contracts. Default would have a devastating impact on global credit markets and economic growth.

Section 4 of the 14th Amendment reads: "The validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."

The Supreme Court has on only one occasion - in the depths of the Depression - had the opportunity to rule on this section. In that case, Perry v. United States, the Court said, "The Constitution gives to the Congress the power to borrow money on the credit of the United States . . . . Having this power to authorize the issue of definite obligations for the payment of money borrowed, the Congress has not been vested with authority to alter or destroy those obligations." Now that Congress has borrowed money and incurred debt, we cannot - as a nation and under our Constitution - walk away.

This section was meant to ensure the payment of Union debts after the Civil War, and to disavow Confederate ones. But it was written in broader terms and extends well beyond those particular obligations. According to Yale Law Professor Jack Balkin: "You're not supposed to hold the validity of the public debt hostage to achieve political ends…. Section 4 is a fail-safe that only comes into operation when everything else is exhausted."

In addition, under the "take care" clause the President has the authority under Article II, Section 3 of the Constitution to "take Care that the Laws be faithfully executed." Since Congress has previously authorized all the debts and obligations that would be in default on August 3, we believe this Constitutional authority would also reinforce your ability to increase the debt limit on an emergency basis.

Just as President Lincoln issued the Emancipation Proclamation at a time of emergency in our Nation's history to free those who were enslaved during the Civil War, today you face a looming calamity that in some respects is just as grave.

The Congressional Black Caucus will stand behind you, and applaud your courage, as you fulfill your obligation to uphold the dictates of the Constitution to protect the full faith and credit of the United States. We urge you to do that which is necessary for the good of the country.

Sincerely,

Emanuel Cleaver

Chairman, Congressional Black Caucus

John Conyers, Jr.

Dean, Congressional Black Caucus

Ranking Member, Committee on the Judiciary

Approved by forty-two of forty-three Members of the Congressional Black Caucus

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