Goldman Sachs CEO Lloyd Blankfein wants politicians and business leaders to work together to avoid the “fiscal cliff,” even if it means the rich end up paying more in taxes.
“I believe that tax increases, especially for the wealthiest, are appropriate,” Blankfein wrote in a Wall Street Journal commentary in Wednesday’s edition.
But those taxes must also be met with “serious cuts in discretionary spending and entitlements.”
Blankfein argues that marginal tax rates should be kept low, but additional revenue will be generated by expanding the personal income tax base through closing loopholes.
The Goldman chief executive had already lent his support to the Campaign to Fix the Debt, a nonpartisan group founded by Erskine Bowles and Alan Simpson, who chaired President Obama’s debt reduction commission. He was one of 87 CEOs of major companies who signed onto the campaign, which also drew support from Jamie Dimon of , Fortune 500), Steve Ballmer of , Fortune 500), Jeff Immelt of , Fortune 500), and Samuel Allen of , Fortune 500)
The CEOs back the plan proposed by Bowles and Simpson that would reduce debt by $4 trillion over a decade by cutting defense and discretionary spending, curbing federal entitlement costs and reforming the tax code.
The campaign is pushing for tax reform that lowers tax rates, reduces the value of tax breaks and raises revenue to reduce the deficit.
Blankfein cautioned that an agreement to cope with the fiscal cliff will “require flexibility and shared sacrifice” if politicians want to remove the risk of a double-dip recession.
The stakes are high for the president and Congress to stop the country from going over the fiscal cliff, which economists and CEOs agree would hurt the economy.
At the end of this year, the George W. Bush-era tax cuts are set to expire, and after the first of the year, automatic spending cuts will commence that amount to $1.2 trillion in deficit reduction over 10 years.
“Expiring tax cuts and budgetary sequestrations that take effect on Jan. 1 will derail the fragile recovery,” Blankfein wrote. “We in the business community have a responsibility to contribute to a better understanding of the urgency of averting a crippling and self-inflicted recession.”
Blankfein urged the parties to compromise.
“There is more than $1 trillion of cash that is sitting on the balance sheets of U.S. nonfinancial companies,” he wrote. “With certainty about tax rates, companies will increase their capital expenditures (currently at anemic levels), contributing to a virtuous cycle of jobs and growth.”
He also hit on the need to restore confidence in public finance by implementing spending cuts, entitlement reform and revenue increases.
Obama will meet with top American CEOs Wednesday to discuss possible solutions. Corporate leaders are expected to press the president on issues confronting their companies related to tax cuts and revenue generating ideas tied to the fiscal cliff.
Gas stations in the New York metro area are gradually coming back online, providing hope to motorists and also those who are still without power from last week’s Superstorm Sandy.
The U.S. Energy Information Administration said Monday that 24% of gas stations in the metro area did not have gasoline available for sale, one week after the deadly storm swept through the Northeast on Oct. 29.
That’s compared to 27% of gas stations that were unavailable on Sunday and 67% on Friday.
Long lines of cars have become a common sight at gas stations in New York City and New Jersey. Pedestrians holding gas cans are also queuing up, seeking fuel for the generators powering their homes.
Shipping problems at the ports, as well as traffic jams resulting from the loss of mass transit, have fouled up supply lines in the wake of the storm. In addition, many gas stations lost power during Sandy, and with it the ability to pump gas.
Goldman Sachs showed shareholders a high profit and a sharp uptick in revenue in its third-quarter results Tuesday.
Alongside the increase in revenue and profit, Goldman Sachs more than doubled what it set aside for employee compensation during the quarter.
“This quarter’s performance was generally solid in the context of a still challenging economic environment,” said CEO Lloyd Blankfein in a statement.
, Fortune 500) handily beat analysts’ estimates for its profit and revenue. The bank reported a net profit of $1.51 billion, or $2.85 per share, on $8.35 billion of revenue. Analysts had forecast profit of $2.12 per share and revenue of $7.3 billion.
Related: Citigroup not as optimistic about housing rebound
Compensation more than doubled to $3 payday loans guaranteed no fax.7 billion during the third quarter from a year earlier. Average compensation per employee totaled $336,441 for the first nine months of 2012, up roughly 10% from the first nine months of 2011 when the average salary was $292,836.
In its earnings release, Goldman Sachs said compensation increased because of the increase in revenues.
Goldman Sachs is the fourth major bank to report earnings, following , Fortune 500), , Fortune 500), and , Fortune 500). All three banks also beat investor expectations. Both JPMorgan Chase and Wells Fargo attributed their increase in revenues and profits
Next up will be , Fortune 500), which reports before the market opens Wednesday. , Fortune 500) reports Thursday.
French President Francois Hollande said the proposed banking union agreed at the June 29 European summit is the
Millions of young adults have turned to their parents’ health insurance plans since the Affordable Care Act went into effect. For Liz Wilson, and many others her age, it was the only option.
Wilson, 25, gets health care for a chronic stomach and pancreas problems through a provision in the law that lets young adults stay on their parents’ insurance plans until age 26.
After graduating from college in 2010, she took a temp job in Cincinnati that doesn’t offer benefits. A key piece of the Affordable Care Act went into place the following September, allowing her to get coverage for her mounting medical bills under her parents’ plan.
"I have to keep a close eye on things, which requires a lot of doctors’ visits and maintenance medicines," Wilson said. "Without health reform, I’d really have to ask myself what I’d do."
That’s a question Wilson may have to answer, since the Affordable Care Act is currently under review by the U.S. Supreme Court and could be struck down. (Read: Justice suggests ’sharp disagreement’ over tough cases)
The legal dispute is centered around the individual mandate provision, which requires most Americans to buy health insurance or face financial penalty. While the mandate is separate from the provision that protects young adults, the court could strike down the entire legislation.
Without health reform, 20-somethings out of luck
This could leave millions of young adults uninsured. About 2.5 million 19-to-26-year-olds obtained health coverage as a result of the provision, the U.S. Department of Health and Human Services estimated in December. Most have had a hard time getting employer-sponsored coverage in a down economy.
As a new business owner, Meredith Fineman, 25, would have to buy her own plan if the law gets struck down. She started her own public relations firm in Washington, D.C., in October, and stayed on her mom’s plan has allowed her to invest her savings into her new venture.
"It would be a huge expense for me as a small business owner, in my first year of business," Fineman said. "It’s the final piece of my financial independence puzzle, but it’s a big one. I’m lucky that I’ve been able to have it thus far because I know how much money it will be."
Fineman may be in luck even if the Supreme Court overturns the law.
"Given the popularity of the provision and the relatively low risk and low expenditures associated with it, I believe that many health plans, even if the law is overturned, will continue to allow dependents to stay on the parents’ plan," said Dr. Mark Fendrick, director of the University of Michigan Center for Value-Based Insurance Design.
Some of the nation’s largest insurers, including UnitedHealth (, Fortune 500) and Humana (, Fortune 500), have already promised to continue to cover young adults regardless of what the Supreme Court decides.
For insurance companies, it’s good business. Insuring young adults brings in a new demographic, said Rachel Garfield, associate director of Kaiser Commission on Medicaid and the Uninsured, since most in the age group would forgo coverage altogether if it weren’t for the law.
If the provision is struck down, "It’s likely [young adults] will go back to them being uninsured," she said, "because buying insurance on their own can be expensive."
The nationwide average premium for individuals in 2010 was $215 per month, the Kaiser Family Foundation reported.
Young adults skip health care as medical debts rise
That’s too much for many 20-somethings. Maya Orchin, a 24-year-old professional dancer living in New York City, says the cost of buying insurance isn’t worth it for her if the court rules that she can’t stay on her parents’ plan.
"It would be really scary, especially because I depend on my body for my job," she said. "But … I’m relatively healthy and thankfully don’t have any injuries that I need to get checked for, so it’s not where I’d put my money."
The choice to go without insurance would be a bigger burden for young adults who do need regular medical attention. For Liz Wilson, going without insurance would mean racking up tens of thousands of dollars in bills. Her family hit its annual out of pocket maximum of $9,000 by mid-February of this year, she said.
"I couldn’t pay for those bills, but I’d need a very high-risk plan, which would be more expensive than I can afford," she said. "That’s why I’m not going back to graduate school, because I need to find a full time job with benefits."
Medical bills are holding many young adults back, forcing them to choose between investing in their health and investing in their future.
A Commonwealth Fund survey found that 31% of young adults with medical debt said they delayed education or career plans because of their bills.
"That’s why I’m relying on the provision," Wilson said. "That’s why I really hope it doesn’t get overturned."
Italian business confidence fell more than economists forecast, declining this month to the lowest level in almost three years as the country
South Sudan is negotiating loans to boost the value of its currency and keep its economy afloat as foreign-exchange reserves decline after the country halted oil production, Deputy Finance Minister Marial Awou Yol said.
The East African nation has secured a $100 million line of credit from Qatar National Bank and will receive a $500-million loan within a month from an unidentified provider, Yol said in an interview in Juba, the capital, on May 8. Loans are also being sought from countries including China.
China agreed to let foreign banks raise their stake in domestic securities firms to as much as 49 percent in a move that may strengthen the nation
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