Most Powerful Women

Advisors to Obama, Bush strike different tones on default

October 16, 2013: 2:09 PM ET

Laura Tyson, former advisor to President Obama, is "embarrassed" by the brinkmanship while Susan Schwab, who served under President George W. Bush, is less alarmist.

By Tory Newmyer, writer

Laura Tyson

Laura Tyson

FORTUNE -- Economic experts gathering in Washington, D.C., to puzzle over where the global recovery is headed understandably circled back to its gravest immediate threat. After all, the menace of a U.S. debt default has seemed to be rumbling just outside and all around Fortune's Most Powerful Women's Summit, convened at a Mandarin Oriental perched between the White House and the Capitol. Even as lawmakers neared a resolution up the street, the proximity to the epicenter of what would be a world-rattling economic temblor elicited broad agreement about what we should be doing instead from top advisors to Barack Obama and George W. Bush.

Laura Tyson, a top Obama brain now teaching at UC Berkeley, said she is "embarrassed in the international community" by the default brinkmanship. "Economic and financial leaders in the global community really do right this moment see the greatest threat to global economic health residing in our Congress and its unwillingness to make clear to the world we stand behind our Treasuries and our debt." Susan Schwab, who served as Bush's top trade negotiator, was less alarmist, contending business leaders have rightly seen past the posturing to operate under the assumption lawmakers won't willfully precipitate a meltdown.

MORE: Complete coverage of the Most Powerful Women Summit

But otherwise, they agreed -- on pursuing trade policy that opens foreign markets to U.S. exports; on improving our K-12 schools to close the skills gap depressing employment; on the transformative promise of our shale boom; on the need for immigration and tax reform, and on. No doubt digging deeper would expose some profound divergences in approach. But the broad outlines of this "competitiveness agenda" have been uttered so often by conference panelists of all political stripes it'd be banal by now if it weren't for the fact that policymakers haven't so much as scratched its surface. Lately, they've been too busy trying to defuse the bomb Tea Party-backed Republicans were trying to detonate under the economy in the name of a misbegotten, unformed demand for "fairness."

That's a point Tyson made after her other co-panelist, Campbell Soup Co. (CBP) CEO Denise Morrison, listed a familiar to-do list for Washington (tax reform, immigration reform, energy, innovation, and technology) and suggested swallowing it whole. "It's not that people wouldn't agree with the agenda you just set out," Tyson said, but even sensible moves like streamlining the corporate tax code quickly become entrenched ideological struggles. "That's my biggest concern. We agree on an agenda but we politically can't find a way to make decisions to pursue them." It's a point confirmed starkly by the events unfolding around the conference.

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