Archived Content

Default: 'Unthinkable'

Oct 7, 2013

Business Roundtable-member CEOs are vigorously warning against defaulting on the U.S. debt. A round-up...

From AT&T Chairman and CEO Randall Stephenson, a statement:

It is unthinkable that the United States could default on its financial commitments, and it would be the height of irresponsibility for any public official to consider such a course.  In fact, even the discussion of default poses great risk to our economy and to our country.  It is imperative to our Nation that the overwhelming majority of our public officials who recognize this reality unite their efforts, regardless of party, to bring a responsible solution forward.

Terry Lundgren, CEO and chairman of Macy’s, Inc., commenting during a discussion with reporters in New York City, as per The Dallas Morning-News:

The government shutdown its not really impacting anyone — well it’s impacting some people — but for us, it’s not really. But if and when there is a default, we will all feel that. If you have parents on Social Security, they will be calling you and asking you when their checks are going to come.

Christopher Viehbacher, CEO of Sanofi, speaking to Bloomberg from the APEC summit in Bali:

I don’t think anybody really believes the U.S. is going to default at this point. Certainly financial markets don’t, when you look at those results. In health care, for the moment health care is largely considered to be an essential service, so it’s not as affected by the shutdown. The FDA for example, continues to review new drug applications. During the shutdown we can’t submit any news ones, but at least the ones in the queue can continue.

Again, nobody likes the uncertainty of the shutdown, but I don’t think anybody’s prepared for the catastrophic scenario, either.

Tom Fanning, Southern Company President & CEO, discussing America's great energy potential, responded to a question from CNBC's Joe Kernan about the debt ceiling and the need for tax and budget reform:

Well, look, ... that is absolutely something we have to do. If we don't address this issue, as everybody knows, we have inescapably higher taxes, higher interest rates, it's not a good future for our kids. Look, we know that we're going to have to reduce costs. We know we're going to have to do something with taxes. I  would not increase them, I would reshape them, certainly. And, perhaps, you know -- this is not a Democrat issue, not a Republican issue.this is meeting the interests of America. And, I think, in all this chaos, perhaps there's an opportunity to create some momentum for a grand bargain.

In addition, BRT President John Engler was on Bloomberg TV this morning. During the "In the Loop" program, interviewer Betty Liu led off by asking about CEOs' views on the current conflict in Washington. Engler responded (video):

They're just flat-out appalled at the lack of leadership. They cannot believe that if you look at the United States as a big corporation, the biggest in the world, that we're not - our board of directors and the Congress, our CEO, the president, aren't sitting down together and working this out. It needs to be resolved. And we have so many challenges on the economic front. Our organization is committed, passionate about growth. We want to see the economy moving.

Liu also ran a clip from George W. Bush's chief of staff, Andrew Card, who commented that the current conflict is not so unusual in Washington, asking for Engler's response. He observed:

[We've] had pressure groups. There's no question. But the leadership has an obligation to act on behalf of the country. These individual members can stake out very extreme positions, and those can be from the left or the right, but the leadership has to bring it together. And people say, well, my way or the highway, they're often given the highway. So you really do -- the system has to compromise. No party controls Washington by itself today.