CEOs say: Prevent the fiscal cliff!
A review of BRT-member CEOs' comments on what's needed after the election. Chief worry? Failure to deal with the fiscal cliff.
From CNBC, "CEOs to Washington: Get a 'Fiscal Cliff' Deal Done":
Calling the fiscal cliff a “financial superstorm,” Aetna CEO Mark Bertolini said Congress and the president should deal with it during the lame-duck session. “In the end analysis, what we need is leadership. I think what the CEO of our nation needs to do is convene, set the agenda, and say we don't come out of the room until we've got a deal,” he said...
AT&T CEO Randall Stephenson is optimistic a deal will get done and when it happens, the U.S. economy will ride a wave of growth spurred on by energy production and technology investment, he told CNBC...
Wilbur Ross, meanwhile, expects the tax treatment on carried interest to change in any deal. But he, too, is optimistic that Obama will use his second term to think about his legacy and work to build a consensus on solutions to the country’s fiscal problems.
In an article in the Financial Times, the head of Blackrock Larry Fink estimated that U.S. companies hold $1.7 trillion in cash. He called it a "huge reservoir of money standing by to be put back into the economy," if confidence improved and if there was a solution seen as "tangible and credible."
Another CEO, Dave Cote of Honeywell, warned that unless Congress reached a deal on the issue, "we could have a recession in my view that is significantly greater than (anyone) is forecasting today, because it's an indictment of our ability to govern." Cote has likened footdragging on the fiscal cliff issue to playing with nitroglycerin.
“These are not Democratic or Republican problems -- they are American problems that affect every individual and industry, including fashion and retailing,” [Macy's CEO Terry ] Lundgren said today in a statement. “Financial uncertainty and excessive debt stifle growth and innovation, and we must overcome these issues if we are to continue to create jobs in America.”
Financial Times, "US business calls for accord to lift growth"
Randall Stephenson, chief executive of AT&T, the telecoms group, said on Wednesday the issue was already holding up business investment.
“It is serving as a throttle on this country’s growth right now and it needs to be addressed real soon,” he said.
Aetna Inc. (AET) Chief Executive Officer Mark Bertolini said he may freeze hiring or reduce jobs at the health insurer, and expects similar moves by other companies, if President Barack Obama and Republicans don’t reach a deal to avoid the “fiscal cliff” of tax increases and spending cuts.
Bertolini said he’s considering eliminating jobs at the Hartford, Connecticut-based company, the third-biggest U.S. health insurer, to guard against a potential recession should Obama and Congress fail to reach an agreement. In a phone interview, he said he is less optimistic after yesterday’s election maintained divided power in Washington.
“Because, the arithmetic in Washington hasn’t changed in any great shape or form, we now face the issue of ‘Can this president and this Congress come together to fix the debt?’”Bertolini said. “To the degree we go over the cliff we’ll react immediately and I’m sure a lot of us will as well.”
UPDATE (12:05 p.m.) From Nightly Business Report's interview with Gary Loveman, CEO and President of Caesars Entertainment:
[Susie] GHARIB: Do you still think the U.S. is the best place to invest?
LOVEMAN: I think it’s one of the best places to invest. Now if you had asked me that question a few years ago, you might have gotten a different answer, because the secular (ph) rate of growth in other countries would be much more appealing. Unfortunately, the rest of the
world has come back to us to some degree. So now with the right medicine available in this country to cure the economic circumstances, the United States economy could become the most or one of the most dynamic investment environments.
GHARIB: The other issue that came up in the election is taxes. If they go up, what does that mean for your customers in your business?
LOVEMAN: An increase in taxes in the new administration is a bad idea for the American economy in every respect and certainly for my customers. The country is very weak. The economy is weak. Consumers’ household budgets are very weak. This is not a time for a tax increase.
UPDATE (1 p.m.): WSJ, John Bussey column, "CEOs Have a Message for Washington: Stop It Already":
James Rogers, Eastman Chemical: "It's hard to imagine a CEO with the president's track record not being thankful (and a little bit surprised) to still be in their job. It's time to move from 'divide and conquer' to 'unite and govern.' If this is done with a healthy dose of humility, the country will follow."...
Jim Turley, Ernst & Young: "This election was a repeat of what we have seen for the past several elections—a very divided electorate. The resulting divided governments have produced very little in the way of results. President Obama and congressional leaders must put partisanship on the back burner and understand that the economy and our nation need solutions to the problems facing us."