A U.S. political compromise resolving the so-called fiscal cliff would help lift American consumer and business confidence and revive the nation’s sluggish economy, the chairman of Dow Chemical Co. (DOW:US) said.
“We’re living in a world of uncertainty and volatility,” Andrew Liveris, chief executive officer of the Midland, Michigan-based company, told the Australian Broadcasting Corp.’s Inside Business television program, according to a transcript. “Rebuilding confidence even with a mini deal and a version of the cliff I think will start to trigger what politicians are desperately looking for, which is the beginning of confidence and therefore a consumer and investment cycle.”
Budget talks between Democrats and Republicans were at a stalemate, U.S. House Speaker John Boehner said Nov. 30. His comment came shortly after President Barack Obama warned of “prolonged negotiations.” The issue has gained more urgency as the clock ticks down on more than $600 billion in tax increases and spending cuts scheduled to start taking effect in January.
Australian-born Liveris said he had taken part in a series of meetings with other CEOs and business groups at the White House following the presidential elections in early November, according to the transcript of the interview.
There was a “better-than 50 percent chance” that a partial deal will be reached in the next three to four weeks and that a “full blown” agreement may be concluded in six to nine months later, he said. “Averting the fiscal cliff in my view is driving this president and the Republicans to come to the table with compromise.”
Obama has proposed a framework that would raise taxes immediately on top earners and set an Aug. 1 deadline for rewriting the tax code and deciding on spending cuts, according to administration officials.
It calls for $1.6 trillion in tax increases, $350 billion in cuts in health programs, $250 billion in cuts in other programs and $800 billion in assumed savings from the wind-down of the wars in Iraq and Afghanistan, according to the officials, who asked for anonymity.
The deadlock is over tax rates for the top 2 percent of wage earners in country, extending a battle that has been waged for more than a year between Obama and Republicans in Congress.
The Congressional Budget Office has warned that if Congress doesn’t avert the fiscal cliff, the economy might slip into a recession next year and boost the unemployment rate to 9.1 percent in the fourth quarter of 2013, compared with 7.9 percent in October.
To contact the reporter on this story: Elisabeth Behrmann in Sydney at email@example.com
To contact the editor responsible for this story: Paul Tighe at firstname.lastname@example.org