CEOs Urge at Least $300 Billion in Fiscal Stimulus

Chief executives of leading U.S. companies called for a fiscal stimulus package worth at least $300 billion and urged president-elect Barack Obama to swiftly name his economic team.

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Dozens of chief executives met at the Wall Street Journal  CEO Council event in Washington D.C. to identify what they think should be priorities for the Obama administration and the new Congress.

Wachovia's Robert Steel and pension fund TIAA-CREF CEO Roger Ferguson were among those calling for a fiscal stimulus package to encourage consumer spending in the short term.

Overall, chief executives agreed that the U.S. economy could not recover independent of the rest of the world, and they urged the international community to coordinate stimulus plans.

A global financial crisis has led several countries into recession, tightened credit markets, raised unemployment and wrecked havoc on consumer spending.

Leaders of industry emphasized investment in infrastructure and programs with long-term benefits, and said the United States should favor permanent tax cuts over tax rebates.

However, a broad economic stimulus bill, which Obama wants the U.S. Congress to pass promptly, is opposed by many Republican lawmakers and is unlikely to be approved by the current Congress during its short legislative session this week.

Obama's chief of staff, Rep. Rahm Emanuel of Illinois, later told the conference that key components of a stimulus package would include tax cuts and what he called investments
in "green" infrastructure.

"The economy needs it, the American people need it," Emanuel said.

CEOs lamented lack of young talent in science, technology and math, and called for a partnership with the private sector to promote a more competitive workforce. Improving education was the group of executives' second-highest priority after a global economic stimulus plan.

New York Sen. Charles Schumer told the executives, "I see lots of businesses, and they come in and lobby on everything and rare is the business that comes in and lobbies on education."

Buy Illiquid Assets

A subgroup of chief executives said the Treasury Department should use funds remaining from the $700 billion financial services rescue plan, and possibly additional funds, to buy illiquid assets from financial institutions, the original intent of the plan.

"These are assets that need to get moving," said Wachovia CEO Steel, who until early July was under secretary for domestic finance and a close advisor to Treasury Secretary Henry Paulson. But buying the troubled assets was the lowest on a wish list of 18 priorities voted on by the larger group of chief executives present at the conference.

The finance subgroup, that included Steel and Time Warner's Jeffrey Bewkes, also called for creation of a panel to consider changes to financial regulations.

Sen. Maria Cantwell, a Democrat from Washington state, urged the CEOs to be more specific on all fronts. In terms of financial regulation, Cantwell said she only had three words: "Transparency, transparency, transparency."

"If you don't work hard on transparency, you will get another Sarbanes-Oxley (corporate reform law)," she told the conference.

A sub-group of CEOs voted to support "comprehensive reform" of the U.S. healthcare system. About 47 million Americans lack health insurance, and the group backed universal access to affordable care, with a requirement that individuals buy their own health insurance, known as an "individual mandate."

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