President Barack Obama’s meeting with a dozen corporate leaders at the White House today is his latest overture to the business community as he works to build support for a debt deal that includes new taxes on wealthy Americans.
When the group gathers at 2:45 p.m. to discuss ways to avoid the so-called fiscal cliff, Obama will emphasize eliminating economic uncertainty by extending tax cuts for middle-income Americans that are due to expire at the end of the year, according to an administration official.
The president met yesterday with top labor leaders and pledged that he wouldn’t extend tax cuts for top earners, also set to lapse. On Friday he will meet with Democratic and Republican congressional leadership to officially begin negotiations.
Obama is opening talks with lawmakers by reiterating the plan from his fiscal 2013 budget, which called for $1.6 trillion in additional revenue, mostly from high-income taxpayers, White House spokesman Jay Carney said yesterday. That’s twice the amount that House Speaker John Boehner, an Ohio Republican, discussed in negotiations last year.
Many of the executives with whom Obama is meeting have backed his call for a deal that combines new taxes and spending cuts. They include General Electric Co. Chief Executive Officer Jeffrey Immelt, Ford Motor Co. CEO Alan Mulally, Honeywell International Inc. CEO David Cote and American Express Co. CEO Kenneth I. Chenault.
The other business leaders scheduled to attend are Aetna Inc. CEO Mark Bertolini; Xerox Corp. CEO Ursula Burns; Dow Chemical Co. CEO Andrew Liveris; Procter & Gamble Co. CEO Bob McDonald; PepsiCo Inc. CEO Indra Nooyi; International Business Machines Corp. CEO Ginni Rometty; Wal-Mart Stores Inc. CEO Mike Duke; and Chevron Corp. CEO John Watson.
The fiscal cliff, a $607 billion combination of automatic spending cuts and tax increases, is scheduled to take effect in January. If Congress doesn’t act, taxes on ordinary income, capital gains, dividends and estates will increase, pushing the top tax rate to 39.6 percent from 35 percent. Automatic spending cuts will take effect and the economy will probably go into a recession in the first half of 2013, according to the Congressional Budget Office.
Obama is proposing to cut the deficit by $4 trillion over the next decade. That includes $1.1 trillion in budget cuts already agreed to as part of a deal last year to raise the government’s debt limit.
As he meets with outside groups, Obama is also building support around his cause with today’s news conference, his first since winning a second term on Nov. 6. After Thanksgiving, he plans hold some campaign-style events outside of Washington to rally public support.
Xerox’s Burns, in an interview yesterday, said she expects that Obama will also want to discuss his relationship with the business community as well as immigration, energy and infrastructure.
“It’s always the same things,” said Burns, who has been a frequent visitor to the White House for similar meetings. “You could play a tape and we’d all be saying the same things. It’s not a new conversation.”
“We have to work with him and Congress to get things done that will be useful to businesses, and the thing is, what’s good for business is often good for the country,” she said.
Democrats, including Obama, want to extend only the tax breaks affecting individual income below $200,000 and married couples’ income below $250,000. Republicans want to extend all of the tax cuts for a year and then overhaul the tax code.
Exit polls conducted during the Nov. 6 balloting found that 47 percent of voters said they favored letting taxes rise for couples with annual incomes of $250,000 or more, and 13 percent said they should go up for everyone.
Treasury Secretary Timothy F. Geithner said yesterday that it will be necessary to raise personal income tax rates on the wealthiest Americans to reduce long-term budget deficits because capping deductions won’t raise enough revenue.
Obama is “not prepared to extend the upper-income tax cuts,” Geithner said Tuesday at the Wall Street Journal’s CEO Council meeting in Washington. “There’s obviously universal support for the middle-class tax cuts. Doing that would remove the greatest source of anxiety and much of the greatest risk in the fiscal cliff.”
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