Let’s hope the threat of working through the holidays gets the President and Congress to address the looming fiscal cliff before the December 31 deadline. The health of the country’s private sector might depend on it.
Brian Hamilton, CEO of the financial analysis company SageWorks, stopped by The Cycle today to talk about the need to hammer out the 2013 budget and tax code ASAP–that is, before companies commit themselves to unnecessarily austere policies stemming from a lack of confidence. “The message to Washington is make a policy — even if it’s not great — and get it out early,” Hamilton said.
A study by the Wall Street Journal found that half of the top 40 publicly-traded companies in the U.S. plan on cutting investment expenditures this year or next. The Journal points to economic uncertainty – stemming largely from the back-and-forth in Washington over next year’s tax code – as a prime reason.
“There’s no consensus, there’s no agreement, there’s very little debate on policies in Washington,” Hamilton told The Cycle. “We’ve got 27 million private companies out there. You can’t throw policy at them on December 31 this year and expect them to adapt and plan for their businesses.”
Hamilton argued that companies will hire if they’re able to predict what their revenue, expenses and taxes are going to be. Addressing the country’s unemployment crisis was a cornerstone campaign issue for President Obama, who won re-election amid a 7.9% unemployment rate earlier this month.
Obama made calls to Warren Buffett and JPMorgan Chase CEO Jamie Dimon as well as executives from Apple, Boeing, and Costco while on a diplomatic tour of Southeast Asia this weekend to discuss the ongoing fiscal negotiations in Washington. The president appealed to a dozen business executives last week before engaging in negotiations with congressional Republicans.