Morgan Stanley (MS:US) Chief Executive Officer James Gorman asked the investment bank’s employees to urge U.S. lawmakers to find an agreement that averts the so-called fiscal cliff.
“No issue is more critical right now for the U.S. economy, the global financial markets and the financial well-being of our clients, which is why I am asking you to participate in the democratic process and make your voice heard,” Gorman wrote in a memo, a copy of which was obtained by Bloomberg News. The message went to about 30,000 U.S. workers including 16,000 financial advisers, said James Wiggins, a company spokesman.
Gorman, 54, joins a roster of Wall Street leaders including JPMorgan Chase & Co. (JPM:US) CEO Jamie Dimon in calling on politicians to reach a deal that avoids $607 billion in automatic tax increases and spending cuts due to take effect in January. Goldman Sachs Group Inc. (GS:US) CEO Lloyd C. Blankfein is among more than a dozen corporate leaders set to visit the White House today as President Barack Obama seeks support for his proposals.
Dimon, 56, said last month that bond markets may spurn U.S. debt if lawmakers fail to reach a deal. Blankfein, 58, has said he would be willing to pay higher taxes if he thought it would help resolve the budget.
“The economic consequences of inaction by our government could be terrible: a severe, negative impact on every taxpayer, a shock to the financial markets and a painful return to recession,” Gorman wrote in his memo. The Wall Street Journal reported the contents on its website late yesterday.
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.
“Neither political party can do this alone,” Gorman wrote. “But I believe there is a real possibility a balanced solution can be reached -- particularly if our elected representatives hear how important this is from enough of their constituents.”
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