CEOs urge Congress to raise taxes, cut spending
WASHINGTON CEOs from more than 80 major U.S. companies are pressing Congress to reduce the federal deficit by raising taxes and cutting spending. The deficit and how to tame it has become a key theme in the presidential campaign.
They warned in a statement issued Thursday that the uncertainty spawned by the deficit, which has topped $1 trillion for four consecutive years, is dampening businesses' hiring and investment and stifling the fragile economic recovery.
The CEOs said the solution requires a combination of higher taxes and reduced government spending including on entitlement programs such as Medicare and Medicaid. They also seek federal investment in infrastructure and math and science education.
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"The U.S. has an opportunity to not only fix our debt issue and have an economic recovery, but we can also be a model for the world in how to deal with debt," said Honeywell CEO Dave Cote, a member of the CEO group, in statement. "What it really comes down to is if we still have the political will to be a great country. Many people in the world and even some countries believe our time is past and we can no longer muster the courage to address tough issues. I don't believe that and neither do most U.S. CEOs."
The CEOs head a diverse array of corporations, including Aetna Inc., Microsoft Corp., JPMorgan Chase & Co., Time Warner Cable Inc., Merck & Co. Inc., General Electric Co., Dow Chemical Co., Verizon Communications Inc., Bank of America Corp., AT&T Inc. and Allstate Corp.
The group endorses the proposals of a special bipartisan commission that called for about $3 in spending cuts for every $1 in tax increases to save around $4 trillion.
Republican politicians and lawmakers have vigorously opposed tax increases. Republican presidential nominee Mitt Romney would lower deficits mostly through deep spending cuts and eliminating unspecified tax deductions. He also wants to lower the top tax rates on corporations and individuals.
President Barack Obama has proposed reducing the deficit by slowing spending gradually, to avoid suddenly tipping the economy back into recession. He would raise taxes on households earning more than $250,000 and impose a surcharge of 30 percent on those making more than $1 million.
The deficit, the shortfall created when the government spends more in a year than it collects, currently has the government borrowing about 31 cents for every dollar it spends.
A year-end deadline looms for Congress and the White House to work out a deal on the deficit. Otherwise across-the-board spending cuts and tax increases will automatically kick in, slicing about $100 billion from federal budgets and raising taxes by $400 billion as the nation goes over the so-called "fiscal cliff" in early January.