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Goldman Sachs Group Inc. (GS) Chief Executive Officer Lloyd Blankfein joins 13 other corporate executives at the White House tomorrow as President Barack Obama courts their support for his plan to raise revenue and cut spending to avert the so-called fiscal cliff.
Obama’s meeting, after a similar gathering with chief executives Nov. 14, comes amid an administration campaign to pressure Congress to extend tax cuts for middle-income Americans while letting them rise for top earners.
U.S. House Speaker John Boehner of Ohio and his House Republican leadership team are scheduled to meet with Blankfein and other executives before the White House session. The CEOs are pressing for an agreement between the White House and Congress to avoid the $607 billion in automatic tax increases and spending cuts due to take effect in January.
With the Christmas holiday approaching, the Obama administration is mounting a campaign-style push for public support as the newly re-elected president faces off against congressional Republicans over proposals to avert the fiscal cliff. He met with owners of small businesses today and is planning to visit a toy factory in Pennsylvania this week to help build public support for his plan.
Obama is urging Congress to act immediately on his plan to keep existing tax rates for middle-income Americans while letting those for the top earners rise, even as talks continue on spending cuts and changes to entitlement programs such as Medicare. Many Republicans say they are willing to consider higher revenue as long as it’s accompanied by cuts in entitlement programs.
The president is arguing that, without a deal, consumer confidence may suffer, hurting holiday shopping and the economic recovery.
“It is something that everyone in Washington agrees must be done, and it is something that the House of Representatives could do today or tomorrow if they so chose, because the Senate has already passed a bill that extends those tax cuts,” White House press secretary Jay Carney said.
The executives invited to the White House are: Frank Blake, chairman and chief executive, the Home Depot Inc. (HD); Joe Echeverria, chief executive of Deloitte LLP; Ken Frazier, president and chief executive, Merck and Co. Inc.; Muhtar Kent, chairman and chief executive, the Coca-Cola Co. (KO), Terry Lundgren, chairman, president and chief executive, Macy’s Inc. (M); Marissa Mayer, president and chief executive, Yahoo!, and Douglas Oberhelman, chairman and chief executive, Caterpillar Inc. (CAT)
Also in the meeting are Ian Read, chairman and chief executive of Pfizer; Brian Roberts, chairman and chief executive of Comcast Corp. (CMCSA); Ed Rust, chairman and chief executive of State Farm Mutual Automobile Insurance Co.; Arne Sorenson, president and chief executive of Marriott International Inc.; Randall Stephenson, chairman and chief executive of AT&T Inc. (T), and Patricia Woertz, president and chief executive of Archer-Daniels Midland Co.
Negotiations have made little headway.
“There’s been little progress with the Republicans,” Senate Democratic leader Harry Reid said today.
Reid, a Nevada Democrat, told reporters he is “disappointed” by the lack of progress in the talks since he and other congressional leaders met with Obama at the White House on Nov. 16. Lawmakers need to “get away from the happy talk” and start discussing specifics, he said.
Still, Reid said he was “extremely hopeful” and didn’t think Republicans will hold out and allow the tax increases and spending cuts to be triggered.
The Standard & Poor’s 500 Index lost 0.5 percent to close at 1,398.94 at 4 p.m. in New York after earlier climbing 0.2 percent. The dollar rose against 13 of 16 major peers, while crude and gold futures decreased at least 0.4 percent. Ten-year Treasury yields were down 2.6 basis points at 1.64 percent.
Before tomorrow’s meeting with Blankfein and the other executives, Obama will have an event with middle-income Americans who would be affected if the tax rates rise.
Obama warns that middle-class taxes could increase as much as $2,200 unless an agreement is reached by year’s end. He wants tax cuts extended for 98 percent of Americans and 97 percent of small businesses while ending tax cuts for the wealthiest Americans -- households earning more than $250,000 a year. He is proposing more than $3 trillion in spending cuts, including those already enacted.
Blankfein was at the White House in July to meet with Jack Lew, Obama’s chief of staff. He also is on the CEO fiscal leadership council of the Campaign to Fix the Debt, which was founded by the co-chairman of Obama’s fiscal commission.
The group is backing the framework laid out by 2010 fiscal commission leaders Erskine Bowles and Alan Simpson for reducing the nation’s deficit, which has exceeded $1 trillion in each year of Obama’s first term. Bowles, a Democrat and former White House chief of staff for President Bill Clinton, and Simpson, a Republican and former senator from Wyoming, proposed tax increases and spending cuts.
The CEO councils’ principles call for Congress to overhaul Medicare and Medicaid, “strengthen” Social Security and enact “comprehensive and pro-growth tax reform” that lowers rates, broadens the tax base, raises revenue and cuts the deficit.
Blankfein has urged policy makers to reach a compromise to avoid the fiscal cliff, including cutbacks to programs like Social Security and more revenue from the wealthiest Americans.
“Social Security wasn’t devised to be a system that supported you for a 30-year retirement after a 25-year career,” he said in an interview with CBS news on Nov. 19. “The retirement age has to be changed.”
“In the long run, there has to be more revenue,” he said. “The burden of that revenue will be disproportionately taken up by wealthier people. That’s just logical.”
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