More than 80 heads of U.S. companies joined a campaign to reduce federal deficits through spending cuts and tax increases because President Barack Obama hasn’t reached an accord with lawmakers that would avoid a fiscal cliff, said billionaire investor Wilbur Ross.
“It was really an announcement out of desperation,” Ross said of a statement yesterday signed by the chief executive officers of companies including Cisco Systems Inc. (CSCO:US), Microsoft Corp. (MSFT:US), Boeing Co. (BA:US) and Goldman Sachs Group Inc. (GS:US) “They were trying collectively as business leaders to fill the vacuum left by the political leadership of the president.”
The Campaign to Fix the Debt said in its letter that a long-term deficit-reduction deal would encourage economic growth and ease the uncertainty holding back the U.S. economy. Among the group’s leaders are Erskine Bowles and Alan Simpson, the co- chairmen of Obama’s 2010 fiscal commission.
Disagreements between Democrats and Republicans over how to approach deficit reduction have left Congress deadlocked. Obama has said he wants a plan combining some changes to spending programs with a tax increase on high-income earners. Republicans, including presidential candidate Mitt Romney, want cuts to entitlement programs and oppose tax increases.
“I think it’s tragic that President Obama appointed Simpson and Bowles, they came with relatively sensible suggestions, and he totally walked away and provided no leadership for them,” Ross, chairman of WL Ross & Co., said in an interview on Bloomberg Television’s “The Pulse.” “If he had exerted leadership, we wouldn’t have the fiscal cliff that we have now.”
The fiscal cliff refers to $607 billion in spending cuts and tax increases that are set to start in January unless Congress acts to avoid them. If Congress doesn’t come to an agreement, the drop in spending and burden of higher taxes would probably lead to a recession, according to the Congressional Budget Office.
“Policy makers should acknowledge that our growing debt is a serious threat to the economic well-being and security of the United States,” the executives said in the letter.
To contact the reporters on this story: Devin Banerjee in New York at email@example.com; Maryam Nemazee in London at firstname.lastname@example.org
To contact the editor responsible for this story: Christian Baumgaertel at email@example.com