Blankfein: Fiscal Cliff Deal Is Very ‘Reachable’

Thursday, 29 Nov 2012 08:16 AM

  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink
The U.S. economy is charging full speed ahead toward the fiscal cliff, though a deal to avoid such a disaster is very “reachable,” said Goldman Sachs CEO Lloyd Blankfein after meeting with President Barack Obama and several other CEOs to discuss the fiscal cliff.

At the end of this year, the Bush-era tax cuts and other benefits expire at the same time automatic cuts to government spending kick in, a one-two punch known as a fiscal cliff that could tip the economy into a recession next year if left unchecked by Congress.

Sticking points involve taxes, with Democrats arguing for tax breaks to expire for wealthier Americans to drum up revenue, a move Republicans oppose on the grounds that doing so would hit many small business owners with higher taxes and crimp plans to expand and hire. Republicans instead are prioritizing spending cuts.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

Either way, compromise remains a very real possibility.

“If I were involved in a negotiation like this, and everybody was purporting to be where they are, I would say that an agreement was reachable,” Blankfein told CNBC.

Both sides of the political aisle will likely see the need to make concessions.

“Look, at the end of the day, the most important value is to get the economy moving forward,” he said.

“That’s not going to happen if our budget deficit keeps widening.”

Any compromise would likely involve tax increases.

“I would prefer as low of a marginal rate as possible because it’s the marginal rate that provides the incentive to do incremental work by people, but I’m not dogmatic — I wouldn’t go to the end for that,” Blankfein said.

Obama and Congressional leaders have expressed optimism they will steer the economy away from the cliff.

Meanwhile, Treasury Secretary Timothy Geithner is scheduled to meet with Congressional leaders Thursday regarding the fiscal cliff negotiations, Reuters reported.

Most investors tend to agree that a deal will be made.

A Bloomberg poll of 862 global investors found that three out of four expect the nation’s leaders to reach a deal that steers the economy away from the cliff, even if such an accord involves temporary or stopgap measures.

Only 6 percent saw the economy careening over the cliff and into a recession.

“Both sides understand the importance of striking a deal, increasing taxes and cutting entitlements,” Richard Salerno, director of fixed income for Kovitz Management in Chicago, told Bloomberg.

“The market just wants to know the rules going forward so they can move on and begin to lift us out of our fiscal mess.”

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

© 2014 Moneynews. All rights reserved.

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved