Inside This Issue - Opinion
Execs call for action to avert fiscal cliff
November 26th, 2012
by Jeffrey Woldt
Business leaders have come forward at a crucial moment in an effort to help shape a national consensus on what to do about the looming fiscal cliff, a combination of hundreds of billions of dollars in tax hikes and spending cuts that will automatically take effect on January 1 if President Obama and Congress fail to intervene.
A group of prominent executives, including Walmart president and chief executive officer Mike Duke, met with Obama at the White House the week before Thanksgiving to discuss the situation and identify elements of a potential solution.
In a statement issued after the session Duke summed up what’s at stake in terms that are applicable to all mass market retailers: "In many ways, Walmart’s customers are at the center of this debate. They are middle-class Americans and those aspiring to join the middle class. Our customers are working hard to adapt to the ‘new normal,’ but their confidence is still very fragile. They are shopping for Christmas now and they don’t need uncertainty over a tax increase.
"The need for certainty is also true for business. Many of us are headed into our new fiscal years and are making decisions on investments that will drive growth."
Concerns about the deleterious effects of the nation plunging over the fiscal cliff are real. If that were to happen, the Congressional Budget Office projects that the economy would probably suffer a double-dip recession and unemployment would hit 9%.
Business leaders are pragmatists. They understand that a comprehensive approach to the problem is necessary and that all parties in the debate will have to compromise. A group of executives from 80 major corporations, among them Walgreens president and CEO Greg Wasson, has called for that course of action.
"In order to develop a fiscal plan that can succeed both financially and politically, it must be bipartisan, and reform to all areas of the budget should be included," the group asserted in late October. "The recommendation of the bipartisan Simpson-Bowles Commission, which saved $4 trillion and addressed all parts of the budget, provide an effective framework for such a plan."
With the health of the economy on the line, other retail executives should follow Wasson and Duke’s lead and speak out.