Pawlenty: Fiscal Cliff Already Hurting Economy

Friday, 02 Nov 2012 08:51 AM

By Dan Weil

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Tim Pawlenty, head of The Financial Services Roundtable, says the impending fiscal cliff already is doing damage to the economy.

In an open letter to the president and Congress on his first day on the job, the former Minnesota governor wrote that economists of the group’s members are in unison on that point.

“They unanimously agreed the fiscal cliff is imposing a negative drag on business lending, hiring, spending, and investment right now, despite the actual cliff being over two months away,” the letter states.

Editor's Note: You Deserve to Know What Obama and Bernanke Are Hiding From Americans

That makes it imperative for the government to deal with the cliff — automatic spending cuts and tax increases — before we hit it Dec. 31, he says.

“The Congressional Budget Office reports that if Congress and the administration do not address the fiscal cliff before the end of the year, the U.S. economy will go into a recession.”

The Roundtable proposes “bridging” the cliff — reducing spending cuts and tax hikes from their automated levels — and then addressing budget deficit reduction in early 2013.

“We need spending reform, including entitlement reform,” Pawlenty writes. “We also need tax reform that encourages growth and investment.”

Meanwhile, the fiscal cliff offers an upside for some dividend stock investors.

At least four companies in the Standard & Poor’s 500 have decided to pay special dividends before the deadline. And experts say others will follow suit, The Wall Street Journal reports.

The list includes Wynn Resorts (WYNN), hospital manager HCA Holdings (HCA), and chemical company LyondellBasell Industries (LYB).

Editor's Note: You Deserve to Know What Obama and Bernanke Are Hiding From Americans

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