A group of high-profile chief executives urged President Barack Obama and Republican congressional leaders on Tuesday to strike a deal to avert the "fiscal cliff" that could include raising tax rates on the wealthiest Americans.
In a sign the end-of-year deadline is taking on more urgency for Corporate America, the group suggested raising revenue "whether by increasing rates, eliminating deductions or some combination thereof." The group had previously backed extending tax cuts for all Americans as a stopgap solution.
"We recognise that part of that solution has to be tax increases," said David Cote, the chief executive of Honeywell who has been active in Washington on fiscal issues. About 160 CEOs signed the letter under the umbrella of the Business Roundtable, a non-partisan group of US chief executives.
The CEOs are renewing a push to persuade lawmakers and Obama to strike a deal to avert the fiscal cliff of US$600 billion (S$ 732 billion) in automatic tax increases and spending cuts that could cause a recession.
A major sticking point in the talks is that Obama wants to let tax rates rise on more affluent individuals. Most Republicans back extending all tax rates that expire at the end of the year.
Republicans also want deeper spending cuts than those sought by Obama and fellow Democrats, particularly on entitlement programs like the Medicare and Medicaid health plans.
Republican lawmakers in recent days have indicated willingness to raise some tax rates, if Obama agrees to changes to entitlements.
Talks between Obama and House of Representatives Speaker John Boehner, the top Republican in Washington, are inching along, with fresh counteroffers exchanged in recent days. Boehner on Tuesday said he was "hopeful.
The business leaders said a compromise should include meaningful changes to programs like Medicare.
"By initiating these reforms simultaneously, and without undermining the broader reforms both parties believe should be pursued, you can rebuild the trust needed for our political system to function and the confidence needed for businesses to invest in new factories, equipment and employees," they wrote.
Corporate chiefs signing the letter include Jim McNerney, chairman of the Boeing Company, and Andrew Liveris, chairman of the Dow Chemical Company. The companies involved represent more than $7.3 trillion in annual revenues and over 16 million employees.
They said they believed the United States would suffer significant negative economic and employment consequences if it went over the fiscal cliff.
The group will soon be running full page ads in national newspapers and lobbying members of Congress.