* More than 80 executives sign letter
* Banks, industrial companies represented
* CEOs demand Congress find debt solution
By Susan Heavey and David Lawder
WASHINGTON, Oct 25 Chief executives of more than
80 big U.S. corporations, including Goldman Sachs, Cisco
Systems and Boeing, joined forces to press
Congress to reduce the federal deficit in a rare show of broad
Though the list largely excludes the energy and technology
sectors, an omission organizers say they are trying to fix, the
U.S. corporate chiefs who did take part said it was urgent to
put in place a bipartisan plan to shrink America's debt.
"We are one deal away from fixing the debt and putting our
nation back on a stronger economic footing that can restore us
to greater job growth," Aetna CEO Mark Bertolini said in
a statement on Thursday backed by 86 other CEOs.
"If the Congress can commit to a plan outline as early as
possible after the election, it will restore business confidence
in our economy and investment will follow," he added.
If Congress fails to reach a deficit reduction deal by the
end of the year, it will automatically trigger big spending cuts
and tax increases in 2013. This so-called "fiscal cliff" would
hit the still-recovering U.S. economy hard.
Economic data indicated business investment showed signs of
stalling in September, a sign that worries over a possible sharp
tightening in the federal budget are weighing on the economy.
While it is too early to know how much impact the CEOs could
have on the public debate, their unified message might strike a
chord with an electorate dismayed by the deeply divided
Congress. Only one in five Americans approve of the job Congress
is doing, according to the latest Gallup poll.
In a conference call featuring a number of the CEOs,
Honeywell boss Dave Cote said Congress should reach an
agreement during the "lame-duck" session after the election to
come up with a more long-term solution early next year.
Washington observers broadly assume that that is precisely
what Congress will do, essentially a "down payment" of some kind
during the post-election session to buy time until the
presidential inauguration and start of a new Congress.
'A POTENTIAL DISASTER'
"From my perspective, there's a potential disaster, or a
potential opportunity here," Cote said. "If we go off the fiscal
cliff, we could have a recession that in my view is worse than
any economist is forecasting today."
The U.S. deficit this year will top $1 trillion for a fourth
straight year, pushing the national debt past $16 trillion.
While the United States currently borrows at record-low interest
rates, investors worry this will change.
President Barack Obama said this week he expected to have a
"grand bargain" deficit-reduction deal within six months of
starting a second term, a bold prediction that does not seem to
have dissuaded the CEOs from pushing harder for a solution.
One element of that solution, which has been anathema to
Republicans, is more revenue. While not expressly calling for
higher taxes as such, the CEO group is endorsing the principle
of a broader tax base that generates higher revenue.
Such an openness to more taxation may seem antithetical, but
a growing number of corporate chiefs, including Goldman's Lloyd
Blankfein and GE's Jeff Immelt, have said in recent
months they were willing to pay that price to solve the problem.
It also stands in some philosophical contrast to business
groups like the U.S. Chamber of Commerce, which has described
the fiscal cliff as a "Taxmageddon" that would lead to the
largest tax increase in history.
Congressional sources said the CEO call was unlikely to hurt
matters but may not have much influence either.
"I don't think it really changes anything. The business
community has never been the stumbling block when it comes to
revenues, it's always been the Tea Party. Hopefully it helps,
but we'll see," said one senior Senate Democratic aide, speaking
on condition of anonymity.
Lobbyists familiar with congressional thinking say business
groups like this could provide cover for lawmakers nervous about
voting for anything that could be labeled a tax increase.
'FIX THE DEBT'
The CEOs' statement was organized by a group called "The
Campaign to Fix the Debt," which is urging Washington to set
aside partisan differences.
The group is essentially a single-issue coalition and its
leaders include big-name political and business figures from
both parties, and former government officials, among them Robert
Zoellick, former president of the World Bank, and Alice Rivlin,
former head of the White House Office of Management and Budget.
Billionaire investment banker Peter Peterson, who has
devoted millions of dollars to raising public awareness of the
deficit, has been the major underwriter of the coalition.
Other trade associations and business groups, such as the
Business Roundtable and the U.S. Chamber of Commerce, are
lobbying on the cliff as well. But such existing organizations
tend to be constrained by the sometimes conflicting views of
dues-paying members and corporations.
This new campaign is now working on adding more CEOs,
particularly in sectors that are not well represented like
energy and technology. Some prominent names in those spaces say
they have not even been approached.
"We never got a call. We never were invited," said John
Roper, spokesman for Houston energy company Apache Corp.
While some doubt how receptive companies like Apache might
be to a plan that includes higher taxes, the Silicon Valley
high-tech community is expected to be more open to the pitch.
The CEO group said recommendations of the bipartisan
Simpson-Bowles Commission provided an effective framework for a
fiscal plan. The proposal has several options, including
trimming tax rates for all income groups.
Simpson-Bowles also calls for slashing many popular tax
deductions and adding them back only selectively. Honeywell's
Cote, who was a member of that panel, said something like
Simpson-Bowles should become a mandatory fallback if Congress
cannot reach an agreement on its own soon.
A spokesman for the group said the $30 million raised so far
would fund digital, print and TV ads, as well as 20 to 25 state
chapters planned nationwide. Chapters are already open in
Tennessee and New Hampshire, he said.
But Rep. Barney Frank, the Massachusetts Democrat who is
retiring after his current term, criticized the CEOs, saying
they were not courageous enough to advocate higher taxes on the
wealthy. He voiced skepticism that eliminating loopholes while
reducing rates would raise enough revenue.
"They wish they could be courageous, but they can't quite
be," he said, adding the CEOs want Congress to make tough
choices, "but why don't they do something tough?"