* CEOs complain that deal does not solve debt problem
* Markets rally as 'fiscal cliff' worry lifted
* Fight on debt ceiling looms
By Scott Malone
BOSTON, Jan 2 While Washington fiddles,
corporate America fumes.
U.S. executives on Wednesday sharply criticized the
political log-jams in Washington that delayed until Jan. 1 the
deal to keep the U.S. economy from sliding over the "fiscal
cliff" and into recession.
While chief executives expressed relief that lawmakers had
managed to avert tax hikes and sharp spending cuts that would
have come without an agreement, they said the deal did not do
enough to stem the rise in the nation's $16 trillion debt.
"The compromise to avert the 'fiscal cliff' outlined by our
leaders in Washington is a small step in the right direction,
but overall it's a missed opportunity to revive our economy and
show U.S. citizens, financial markets, the world and the
business community that the U.S. can still govern effectively,"
said Honeywell International Inc CEO David Cote.
He is a driving force behind a lobbying group of more than
100 CEOs called the "Fix the Debt" group.
While the accord fell short of that group's hopes, U.S.
stocks rallied on their first trading day of the year. Many
economists, including the non-partisan Congressional Budget
Office, had forecast that in the absence of a deal, the economy
could fall back into recession.
The deal passed the House of Representatives on Tuesday
despite heavy opposition from the majority Republicans and was
seen as a victory for President Barack Obama, who had called for
higher taxes on the wealthiest Americans.
Business leaders complained that the 13th-hour deal failed
to solve the nation's long-term budget imbalances.
"This deal's a disaster," said Peter Huntsman, chief
executive of chemical producer Huntsman Corp. "We're
borrowing more and more money. This did absolutely nothing to
address the fundamental issue of the debt."
'MORE HEAVY LIFTING REMAINS'
Executives blasted the political log-jam that prevented the
deal being reached until Jan. 1, leading to months of
uncertainty that some contend hurt the economy by causing
businesses and consumers to delay spending. They noted that a
similar period of anxiety lies ahead as Congress next month will
need to determine whether to raise the nation's borrowing limit.
The last stand-off on the debt ceiling, in the summer of
2011, led Standard & Poor's to strip the United States of its
top-notch "AAA" credit rating.
"Much more heavy lifting remains to ensure the country's
economic well-being and security," said Joe Tucci, CEO of EMC
Corp and a member of the Fix the Debt group. "Leadership
on both sides must now set the party lines aside and lead the
way to a comprehensive and bipartisan plan that's sufficient in
size and scope to decrease the debt ... not a series of stop-gap
measures agreed to on last-minute deadline."
Former Wells Fargo & Co CEO Dick Kovacevich said
current executives should keep up their pressure on politicians
to solve the debt issue.
"The political gridlock in Washington is a disaster. It
appears to me that it's getting worse, not better," Kovacevich
said. "If anything you should be even more vocal on this not
solving anything and Washington, D.C., being dysfunctional."
LACK OF CLARITY
Executives complained that the ongoing, prolonged debates
about taxes and government spending hurt their results, and in
turn the economy, by making their business and commercial
customers reluctant to commit to new purchases.
"All of this uncertainty leads to a lack of decision-making.
They don't know what their budgets will be," said Robert
Cresanti, vice president of government relations for SAP America
Inc, a unit of SAP AG, the world's biggest maker of
business management software.
Cresanti, who served as undersecretary for technology with
the U.S. Department of Commerce during President George W.
Bush's second term, said the ongoing uncertainty about the
nation's long-term budget will cause government agencies at all
levels to delay committing to new spending.
Tom Werner, CEO of SunPower Corp, a solar panel maker and
project developer majority owned by France's Total SA
agreed. But he said in the short term, having a deal was a
"Business people like visibility and stability," Werner
said. "It sure would have been nice to get the debt ceiling
figured out ... it's a huge step in the right direction."