Tuesday, July 12, 2011

BREAKING NEWS: 450 CEOs to Congress—Raise debt ceiling now to prevent disaster

Four hundred and fifty CEOs of some of the country’s largest corporations sent a letter to all members of Congress and the President today urging them to raise the debt ceiling immediately. The CEOs warned that failing to do so could have dire consequences for the U.S. economy.  

The Chamber of Commerce, the National Association of Manufacturers, the Business Roundtable and the Financial Services Forum worked together to get signatures on the letter.  Mark Bertolini of Aetna Inc., Stephen Schwarzman of the Blackstone Group, Caterpillar Inc.’s Doug Oberhelman, Vikram Pandit of Citigroup Inc., General Mills Inc.’s Kendall Powell, Robert Koch II of Koch Enterprises, Stanley Black & Decker Inc.’s John Lundgren, UPS Inc.’s Scott Davis, Matt Rose of BNSF Railway Co.,  and Michael Duke of Wal-Mart Stores Inc. were among the CEOs who signed the letter.

In their letter to Congress, the CEOs said:  “Now is the time for our political leaders to put aside partisan differences and act in the nation’s best interests.  It is time to pull together rather than pull apart....A default would risk both disarray in those markets and a host of unintended consequences."

Chamber of Commerce President Tom Donohue warned Congress  in a statement announcing the letter that an “unprecedented default on the nation’s bills would have dire consequences for our economy, our markets, and Main Street Americans. 

Business Roundtable President John Engler said: “Failure to raise the debt ceiling would strike an immediate and serious blow to any economic recovery, and failure to make significant progress on long-term debt reduction will continue the uncertainty which is hampering our investment climate.”

The letter reads as follows:

July 12, 2011

The President of the United States
The White House
Washington, DC 20500
Members of the United States Congress
United States Capitol
Washington, DC 20510

Dear Mr. President and Members of Congress,

We believe it is vitally important for the US government to make good on its financial obligations and to  put its fiscal house in order.  With our nation on a sound fiscal footing, we are confident that America’s businesses and entrepreneurs will foster generations of high value, well paying jobs and contribute to a  prosperous future.  To this end, we believe now is the time for our political leaders to act.

First, it is critical that the US government not default in any way on its fiscal obligations.  A great nation - like a great company - has to be relied upon to pay its debts when they become due.  This is a Main Street not Wall Street issue.  Treasury securities influence the cost of financing not just for companies but more importantly for mortgages, auto loans, credit cards and student debt.  A default would risk both disarray in those markets and a host of unintended consequences.  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.

Second, our political leaders must agree to a plan to substantially reduce our long-term budget deficits with a goal of at least stabilizing our nation's debt as a percentage of GDP - which will entail difficult choices.  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.

Now is the time for our political leaders to put aside partisan differences and act in the nation's best interests. We believe that our nation's economic future is reliant upon their actions and urge them to reach an agreement.  It is time to pull together rather than pull apart.

Yours sincerely, 

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