Top CEOs: fiscal cliff is hurting jobs

  @CNNMoney September 26, 2012: 1:54 PM ET
jim mcnerney

Boeing CEO Jim McNerney said Wednesday that CEOs are worried about the fiscal cliff.


CEOs of major U.S. companies expect to hire fewer people and invest less in the next six months because of uncertainty surrounding the fiscal cliff.

The automatic tax increases and across-the-board spending cuts that could take effect next year throw "cold water on long term planning," said W. James McNerney, CEO of Boeing (BA, Fortune 500) and Business Roundtable board chairman.

CEO economic expectations are at their lowest level since the third quarter of 2009, according to a survey conducted by the Business Roundtable, a lobbying group of CEOs of top companies such as Honeywell International (HON, Fortune 500), Dow Chemical (DOW, Fortune 500), Xerox (XRX, Fortune 500) and General Electric (GE, Fortune 500).

Only 29% of CEOs said they expect to hire more employees in the next six months, down from 36% in the last quarter. Company leaders are also cutting back on capital spending plans: just 30% expected to increase spending, compared to 43% last quarter.

Congress has until the midnight of Dec. 31 to act to prevent a series of tax cuts from expiring and to stop funding cuts to hundreds of federal programs.

If Congress does nothing, the U.S. will go over the fiscal cliff, triggering $7 trillion worth of tax increases and spending cuts. That will take more than $500 billion out of the economy in 2013 alone.

CEOs don't want Congress to delay the cuts by a few months either, which would only prolong economic "purgatory," said McNerney.

Related: Obama vs. Romney: How they'd handle the $7 trillion fiscal cliff

The nation's top business leaders are so concerned that they plan to launch a media campaign after the Nov. 6 presidential elections. The campaign will push Congress to avoid the fiscal cliff and implement a plan that gives companies more certainty, said the lobbying group's president, John Engler.

What the heck is the fiscal cliff?

The group is urging Congress to use the Bowles-Simpson plan as a guide.

Erskine Bowles was White House chief of staff under President Bill Clinton, while Alan Simpson is a former Republican senator. They co-chaired President Obama's debt reduction commission in 2010 and submitted a bipartisan report, which was widely praised but ignored by the Obama Administration.

The business survey took place from Aug. 30 through Sept. 14 and included responses from 138 CEOs, or 65% of the group's members. To top of page

Join the Conversation
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.36%4.24%
15 yr fixed3.39%3.26%
5/1 ARM3.36%3.27%
30 yr refi4.34%4.22%
15 yr refi3.38%3.24%
View rates in your area
Find personalized rates:
Rate data provided
CNNMoney Sponsors
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.