More and more CEOs are getting restless and starting to beat the drum about Congress dragging its feet on the nation’s looming budget problem.
“People say business leaders should be vocal,” said Jeff Immelt, General Electric CEO Monday, on CNBC’s “Squawk Box”. “Look, we’re vocal! This is a complete distraction…at a time when the country doesn’t need it…. Let’s get it done.”
He wasn’t alone. In fact, we’ve had a parade of them on CNBC.
More and more CEOs are pointing at the coming “fiscal cliff,” a combination of tax hikes and budget cuts scheduled for early January, and claiming it is preventing them from making plans for expansion and investment. That, in turn, is keeping the economy flat.
“[It’s] definitely the fiscal cliff,” said Andrew Liveris, the CEO of Dow Chemical, who appeared on CNBC to discuss his company’s cutback plans. “I'm one of those CEOs that believes we've just got to get our budget balanced again. We've got to show the world that we could be fiscally responsible. Both sides of the aisle have to get to work. And business and capital hates uncertainty and we have an unnecessary new uncertainty.”
Most economists and business executives agree that the combination of tax hikes and government cutbacks planned for January would result in a recession. That prospect is likely to push Congress into action and come up with some sort of anti-“cliff” tax and budget compromise. Some believe that compromise may not come until after the presidential election or even until the new Congress takes over in early January.
Indeed billionaire investor Warren Buffett, CEO of Berkshire Hathaway, said he thinks there’s a "pretty fair chance" the U.S. may go off the "fiscal cliff" for a "short time" before an eventual deal.
“It’s going to get done,” Buffett said. “The people won’t stand for it not being done.” (Related:Berkshire's Biggest Holdings)
“Whoever wins the election I think there will have to be a compromise,” said Lloyd Blankfein, CEO of Goldman Sachs, in an interview on CNBC’s “Squawk on the Street.” “ I don’t think the other side will go into a funk.”
Still, that could mean up to three months of continued uncertainty for business. With corporate revenues beginning to soften in the most recent wave of earnings reports, Corporate America doesn’t want Congress to sit still. And so expect more agitation from the business side.
“Business leaders from all different industries are getting involved because, no surprise, they can’t function in this environment,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a group helping to organize CEOs on the issue. “We all know some big changes are going to have to happen to the budget and until we make those decisions the economy is at really risk. And there’s capital sitting on sidelines basically paralyzed until we know what the path forward is.”
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