WASHINGTON — A coalition of chief executive officers from 80 major U.S. companies, including Macy’s Inc.’s Terry J. Lundgren, endorsed raising taxes and cutting spending as a prescription for reducing the federal deficit, as they stepped up pressure on Congress on Thursday to find a bipartisan solution.
The major corporate leaders said that “fiscal uncertainty around the debt (which is running a little over $1 trillion) is hampering hiring, investment and economic recovery.”
The executives are part of the “Campaign to Fix the Debt,” founded by former Sen. Alan Simpson and former White House Chief of Staff Erksine Bowles, which unveiled its CEO Fiscal Leadership Council on Thursday.
Several business leaders associated with the coalition rang the opening bell of the New York Stock Exchange on Thursday and urged Congress to move beyond the gridlock and create a comprehensive, bipartisan deal to reduce the country’s national debt.
“Our national debt is not a Democratic or Republican problem — it’s an American problem that affects every industry, including fashion and retailing,” said Macy’s Lundgren. “Excessive debt stifles growth and innovation, and we must overcome this issue if we are to continue to create jobs in America — which is what retailers do so consistently. And we need to get serious quickly about debt reduction, using every tool at our disposal — including cutting spending, increasing tax revenue and reforming important entitlement programs — to find a viable compromise that keeps our country and our economic recovery on track.”
In addition to Lundgren, chairman, president and ceo of Macy’s, corporate leaders named to the council included Gregory Wasson, president and ceo of Walgreen Co.; Ken Hicks, ceo of Foot Locker Inc.; Bill Ackman, founder and ceo of Pershing Square Capital Management; Lloyd Blankfein, chairman and ceo of Goldman, Sachs & Co.; Jeffrey Immelt, chairman and ceo of General Electric Co.; Glenn Britt, chairman and ceo of Time Warner Cable Inc., and Steven Roth, chairman of Vornado Realty Trust.
Wal-Mart Stores Inc. is listed as a corporate member but is not on the council.
“The U.S. has an opportunity to not only fix our debt issue and have an economic recovery, but we can also be a model for the world in how to deal with debt,” said Dave Cote, chairman and ceo of Honeywell and a member of the campaign’s steering committee. “What it really comes down to is if we still have the political will to be a great country.”
The ceo’s said the solution lies in higher revenue, reduced entitlement spending, reduced discretionary spending and investment in infrastructure and math and science.
The action by the corporate leaders comes as Congress is facing a “fiscal cliff” at the end of the year. Without a compromise deal on reducing the deficit, deep automatic spending cuts and tax increases will hit in January.
The deficit has been a major theme in the presidential campaign as President Obama and Republican challenger Mitt Romney try to convince the American public who is the better steward for the economy.
Obama has called for the elimination of tax cuts for families with incomes above $250,000 and individuals with incomes above $200,000 as a way to reduce the deficit and help the middle class, while Romney has championed extending tax cuts for everyone, including high-income earners. When pressed, Romney has said he will offset the tax breaks and reduce the deficit by enacting deep spending cuts and eliminating income tax deductions.
The coalition of corporate business leaders endorses the recommendations of the bipartisan Simpson-Bowles Commission that proposed spending cuts and tax increases for a total savings of $4 trillion, in addition to entitlement and tax reform.
The Fix the Debt Coalition specifically supports reforming Medicare and Medicaid, strengthening Social Security and including comprehensive, pro-growth tax reform to broaden the base and lower the rates.