Business leaders urge action on debt ceiling

WASHINGTON Tue Jul 12, 2011 11:18am EDT

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WASHINGTON (Reuters) - U.S. business leaders on Tuesday urged Congress and the White House to reach a deal to raise the federal debt ceiling and reduce the deficit in order to avoid dire economic consequences and set the stage for a stronger recovery.

After spending months quietly lobbying behind the scenes for an increase in the $14.3 trillion debt limit, a coalition of business groups from Wall Street to Main Street publicly called on Republican and Democratic leaders to set aside their differences and work together for the good of the United States.

"Now is the time for our political leaders to act," said a letter to President Barack Obama and every member of Congress that was signed by more than 450 business leaders and groups including the powerful U.S. Chamber of Commerce and a number of Fortune 500 companies.

"It is time to pull together rather than pull apart," the letter said.

The Treasury has said Congress must raise the debt ceiling, which caps how much the United States can borrow, by August 2 or face an unprecedented default. But Republicans and Democrats, including Obama, have been wrangling over a deal to slash America's budget deficit, which Republicans demand before agreeing to raise the borrowing authority.

The White House has warned that an agreement must be in place by July 22 to give Congress enough time to act.

In their letter, business leaders warned that even a technical default would not only throw financial markets into disarray but also increase the cost of mortgages, auto loans, credit cards and student loans.

"The debt ceiling trigger does offer a needed catalyst for serious negotiations on budget discipline but avoiding even a technical default is essential. This is a risk our country must not take," the letter said.

Up to now, businesses have largely relied on lobbying efforts to persuade members of Congress, especially Republican freshmen in the House of Representatives, to agree to a debt ceiling hike.

But on Tuesday, the business community called on political leaders to make the necessary difficult choices for a plan to substantially reduce long-term U.S. deficits and stabilize the national debt as a percentage of gross domestic product.

"The resulting plan must be long-term, predictable and binding. As businesses make plans to invest and hire, we need confidence that, in the absence of a crisis, our government will not reverse course and return to large deficit spending," the letter said.

(Reporting by David Morgan; Editing by Vicki Allen)

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Comments (12)
bck555 wrote:
To David Morgan – The author of the above report:

Where can we find this letter? I would like to read it and identify the 450 “business leaders” that signed it. Especially those Fortune 100 companies, in as much as several of their CEO’s sit on White House committees and panel.

Jul 12, 2011 11:48am EDT  --  Report as abuse
It isn’t about the country, it’s about keeping face and their own jobs.

Jul 12, 2011 11:50am EDT  --  Report as abuse
NewsDebbie wrote:
Ball is in GOP court. 1) let the US default (it has before under GOP and reap fall of stocks and responsibility for not negotiating. 2) suck up the rhetoric and use balance of cuts and taxes. 3) Keep playing the game in hopes Obama caves but either way Aug 2nd comes and all voter eyes are on who is trying to solve the problem.

Jul 12, 2011 11:51am EDT  --  Report as abuse
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