Corporate America’s double standard on the deficit

May 14, 2012, 7:54 PM UTC

FORTUNE – It has been well established that America’s ballooning deficit is one of the biggest risks for the U.S. economy. Congress tried to take action last year. But as we recall, no deal was struck after a baffling political tug-of-war that nearly sent the nation to the brink of default.

Now corporate America is ramping efforts to sway deficit talks. In a series of private dinners and meetings with lawmakers, top executives are urging Congress to reach a deficit-reduction deal before January – when large tax increases and spending cuts are scheduled to automatically kick in, The Wall Street Journal recently reported. Last month, in one of several private meetings to get an agreement under way, JPMorgan (JPM) CEO Jamie Dimon hosted a lunch for several dozen chief executives and two U.S. senators.

Laurence Fink of BlackRock (BLK), Terry Lundgren of Macy’s (M) and Mark Bertolini of Aetna (AET) have also launched separate efforts. Without a deal, executives say, the economy could slip back into recession — $98 billion worth of spending reductions will take effect next year as part of a larger deficit-reduction plan. The urgency has been echoed by Federal Reserve Chairman Ben Bernanke, who has warned that unless Congress and the White House take action later this year the U.S. could fall into a “massive fiscal cliff.”

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Washington clearly needs to do more. But so does corporate America, whose rallying cry exposes a double standard in the C-suite.

While non-financial companies continue to sit on more than $1.2 trillion in cash, joblessness remain persistently high. More importantly, the bulk of job losses last year and the beginning of 2012 came from the public sector as state and local governments grapple with budget shortfalls. There are 1 million fewer government employees today than at the 2007 pre-recession peak, according to Moody’s Analytics. They now make up 9.1% of the working population, the lowest share since 1984.

To be fair, companies flushed with cash have slowly loosened their grip. Apple (AAPL), ranked among U.S. corporations with the loftiest reserves, announced in April that it would pay its first dividend in almost two decades. And the amount of payouts underlying the S&P 500 index is expected to increase 15% this year, according to estimates by Howard Silverblatt, senior index analyst at S&P.

But there are still several companies, particularly in the tech industry, with sizable cash surpluses that do not pay dividends, such as Google,, eBay and Dell. Even if they start, it remains to be seen how boosting shareholder returns might boost the overall economy.

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Which brings us back to job creation. Indeed, the private sector has been adding jobs but not nearly fast enough to recover the losses from the Great Recession and its aftermath. What’s more, more than 200,000 long-term jobless Americans have recently lost their unemployment checks as eight states roll off the federal extended benefits program. True, the economy is improving and government layoffs aren’t nearly as high as they were during much of last year.

But we’re certainly not out of the woods. Unless corporate America hires more, it’s easy to see why their rallying cry for a deficit-reduction plan may not resonate so well in Washington.