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Posted at 01:02 PM ET, 07/28/2011

Business leaders say debt agreement must happen this week


(Bloomberg)
With the prospects for Congress passing a debt-limit measure still uncertain, a group of top business executives on Thursday urged leaders in Washington to come to an agreement by the end of the week, warning that the consequences of inaction “would be very grave.”

In a letter to members of Congress and President Obama, the 14 business leaders – all members of the nonpartisan Financial Services Forum -- note that “our economic recovery remains very fragile” and call for the debt-ceiling negotiators to outline “a credible and predictable path forward, entailing tough decisions on the budget.”

The group comprises the top executives from 20 of the country’s largest financial services institutions, including Goldman Sachs, Morgan Stanley, Bank of America and Citigroup.

“A default on our nation’s obligations, or a downgrade of America’s credit rating, would be a tremendous blow to business and investor confidence -- raising interest rates for everyone who borrows, undermining the value of the dollar, and roiling stock and bond markets -- and, therefore, dramatically worsening our nation’s already difficult economic circumstances,” the business leaders write.

“Given this very real risk, policymakers must correct our fiscal course now, inspire market confidence by paying all of our bills on time, and demonstrate that America is a democracy capable of putting differences aside to solve our most challenging problems.”

The letter comes as the House is expected to vote Thursday evening on a proposal put forth by House Speaker John Boehner (R-Ohio) that would provide for a short-term extension of the country’s $14.3 trillion debt ceiling in exchange for about $915 billion in spending cuts. Most Democrats – as well as more than a dozen Republicans – have said they oppose the bill, making Thursday’s vote one of the most closely-watched of the 112th Congress to date.

If the House bill passes, it is not likely to progress far in the Senate in its current form – all 53 members of the Senate Democratic caucus wrote a letter Wednesday night outlining their opposition to the measure.

That means that the bill would likely have to be re-worked to make it more palatable to members in the upper chamber – and even then, passage would not be a sure thing.

If the House measure fails Thursday night, Senate Majority Leader Harry Reid (D-Nev.) is likely to move forward with his own debt-limit legislation that would extend the country’s borrowing limit through the end of next year and achieve $2.2 trillion in deficit savings.

Both parties’ bases have mobilized on the issue; tea party-aligned groups held a Capitol Hill rally Wednesday afternoon, and labor and Democratic-leaning groups are holding a Capitol rally of their own on Thursday.

The full letter from the business community is below.

July 28, 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 write to you today to urge you to act this week to reach an agreement that will ensure that our Nation continues to meet all of its financial obligations, and that will entail meaningful and concrete steps to put our Nation on a sound fiscal footing. The consequences of inaction -- for our economy, the already struggling job market, the financial circumstances of American businesses and families, and for America’s global economic leadership -- would be very grave.

Our economic recovery remains very fragile. A default on our Nation’s obligations, or a downgrade of America’s credit rating, would be a tremendous blow to business and investor confidence -- raising interest rates for everyone who borrows, undermining the value of the Dollar, and roiling stock and bond markets -- and, therefore, dramatically worsening our Nation’s already difficult economic circumstances. Given this very real risk, policymakers must correct our fiscal course now, inspire market confidence by paying all of our bills on time, and demonstrate that America is a democracy capable of putting differences aside to solve our most challenging problems.

A credible and predictable path forward, entailing tough decisions on the budget, will create the needed environment for businesses and entrepreneurs to start, grow, innovate, and create high quality jobs for Americans, now and in generations to come.

We strongly urge you to reach an agreement this week.

Respectfully,

Thomas J. Wilson

Chairman, President and CEO

Allstate Insurance Company

Brian Moynihan

Chief Executive Officer

Bank of America

Robert Kelly

Chairman and CEO

BNY Mellon

Vikram S. Pandit

Chief Executive Officer

Citigroup, Inc.

Jim Weddle

Managing Partner

Edward Jones

Lloyd C. Blankfein

Chairman and CEO

Goldman Sachs

James Dimon

Chairman and CEO

JPMorgan Chase & Co.

Steven A. Kandarian

President and CEO

MetLife, Inc.

James P. Gorman

President and CEO

Morgan Stanley

John R. Strangfeld

Chairman and CEO

Prudential Financial, Inc.

Joseph L. Hooley

Chairman, President and CEO

State Street Corporation

Richard K. Davis

Chairman, President and CEO

US Bancorp

John G. Stumpf

Chairman and CEO

Wells Fargo & Company

Robert S. Nichols

President and CEO

Financial Services Forum

By  |  01:02 PM ET, 07/28/2011

 
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