Business executives urged President Barack Obama and U.S. lawmakers on Wednesday to prevent a year-end across-the-board tax rise that will go into effect unless Congress acts, saying it would hurt consumer spending and business.
Obama met with 12 business executives at the White House to discuss the so-called fiscal cliff - a combination of government spending cuts and tax rises due to go into effect in early 2013, - unless Congress acts.
The across-the-board spending cuts would reduce the budget deficit but could also tip the U.S. economy back into recession.
Obama told the business leaders he is serious about reaching a significant deal on reducing the budget deficit and also made his case for extending tax cuts enacted under former President George W. Bush for all but the highest earners, according to a source familiar with the meeting.
"Our country needs a bipartisan solution for the 'fiscal cliff' that promotes jobs and economic growth now, and avoids damage to a still fragile economy," Alan Mulally, CEO of Ford Motor Company, said in a statement. "We encouraged collaboration and compromise among our leaders."
"Our customers are working hard to adapt to the 'new normal,' but their confidence is still very fragile," Walmart CEO Mike Duke said in a statement. "They are shopping for Christmas now and they don't need uncertainty over a tax increase."
David Cote, chief executive and chairman of Honeywell, told reporters that Obama understood a combination of tax measures and reforms of social programs will be necessary to address the so-called fiscal cliff and beyond that, the deficit.
"The president gets it," Cote said in an interview with cable TV network CNBC. It was "very much of a back-and-forth discussion. He clearly listens ... He understands what needs to happen here."
Cote and others said Obama made a five-minute presentation and then went around the room seeking comments.
Obama, who won re-election last week, must work out a deal with lawmakers before the end of the year to avoid the crunch. He is due to meet with lawmakers on Friday before leaving for a four-day trip to Asia.
Any deficit-cutting plan must balance higher taxes for the rich as well as reforms to social safety net programs.
Obama has convened different groups to plead his case before he meets with lawmakers. He met with labor leaders and representatives of liberal groups on Tuesday and is due to sit down with civic leaders on Friday.
Lawmakers and the president put off serious discussion about how to avoid the fiscal tightening, which both sides say they don't want, until after the November 6 election.
Business executives who met with the president said that while they are worried, they believe politicians will find a solution.
