WASHINGTON, Nov 14 (Reuters) – Business executives urged
President Barack Obama and U.S. lawmakers on Wednesday to
prevent a year-end across-the-board tax rise that will go into
effect unless Congress acts, saying it would hurt consumer
spending and business.
Obama met with 12 business executives at the White House to
discuss the so-called fiscal cliff – a combination of government
spending cuts and tax rises due to go into effect in early 2013,
– unless Congress acts.
The across-the-board spending cuts would reduce the budget
deficit but could also tip the U.S. economy back into recession.
Obama told the business leaders he is serious about reaching
a significant deal on reducing the budget deficit and also made
his case for extending tax cuts enacted under former President
George W. Bush for all but the highest earners, according to a
source familiar with the meeting.
“Our country needs a bipartisan solution for the ‘fiscal
cliff’ that promotes jobs and economic growth now, and avoids
damage to a still fragile economy,” Alan Mulally, CEO of Ford
Motor Company, said in a statement. “We encouraged collaboration
and compromise among our leaders.”
“Our customers are working hard to adapt to the ‘new
normal,’ but their confidence is still very fragile,” Walmart
CEO Mike Duke said in a statement. “They are shopping for
Christmas now and they don’t need uncertainty over a tax
increase.”
David Cote, chief executive and chairman of Honeywell, told
reporters that Obama understood a combination of tax measures
and reforms of social programs will be necessary to address the
so-called fiscal cliff and beyond that, the deficit.
“The president gets it,” Cote said in an interview with
cable TV network CNBC. It was “very much of a back-and-forth
discussion. He clearly listens … He understands what needs to
happen here.”
Cote and others said Obama made a five-minute presentation
and then went around the room seeking comments.
Obama, who won re-election last week, must work out a deal
with lawmakers before the end of the year to avoid the crunch.
He is due to meet with lawmakers on Friday before leaving for a
four-day trip to Asia.
Any deficit-cutting plan must balance higher taxes for the
rich as well as reforms to social safety net programs.
Obama has convened different groups to plead his case before
he meets with lawmakers. He met with labor leaders and
representatives of liberal groups on Tuesday and is due to sit
down with civic leaders on Friday.
Lawmakers and the president put off serious discussion about
how to avoid the fiscal tightening, which both sides say they
don’t want, until after the Nov. 6 election.
Business executives who met with the president said that
while they are worried, they believe politicians will find a
solution.
