Blankfein: Seems Like 'Fiscal Cliff' Deal Could Be 'Reachable'
By: Goldman Sachs CEO Lloyd Blankfein described President Barack Obama's plan for Washington to reach an agreement on the "fiscal cliff" as detailed and "very credible." However, he cautioned that marginal income tax rates may have to rise to seal a deal.
In an interview with CNBC after meetings between the president and several CEOs, Blankfein said, of course, it's hard to tell if a deal will be reached but "if I were involved in a negotiation like this, and everybody was purporting to be where they are, I would say that an agreement was reachable."
Blankfein said he thought concessions on both the revenue and entitlement sides would be necessary to reach a final deal to avert the iscal cliff, when large spending cuts and tax increases are slated to take effect on Jan.1. (Read more: Everything Must Be Touched: Blankfein)
"Look, at the end of the day, the most important value is to get the economy moving forward," Blankfein said. "That's not going to happen if our budget deficit keeps widening."
He added that the marginal income tax rate may have to rise in order to reach a deal.
"I would prefer as low of a marginal rate as possible because it's the marginal rate that provides the incentive to do incremental work by people, but I'm not dogmatic — I wouldn't go to the end for that," he said.
But if we do not sort out the U.S. economy, Blankfein said people will fight over their slice of a shrinking wealth pie.
"I'm certainly not insisting, I don't even desire higher rates," he said. "I think they will be a drag if revenue goes up and rates goes up. But I think they will be a drag on the American economy if our budget deficit widens out forever, if we're irresponsible and if government doesn't work."
When left with these "poor" choices, Blankfein said the compromise has to be in the middle and both sides have to give.
Blankfein was one of a group of corporate heads invited to the White House to discuss the looming fiscal cliff, which has resulted in a political tug of war between Republicans, Democrats and the White House.
Yahoo's Marissa Mayer, Mutar Kent of Coca-Cola , Douglas Oberhelman of Caterpillar and Brian Roberts of Comcast , owner of NBCUniversal also traveled to Washington, D.C., to meet with Obama.
Earlier in the day, Obama advocated for a "fair and balanced" approach to the crisis saying he hoped to reach a deal by Christmas and urged Congress to move now to prevent middle-class tax increases before the new year. Republican House Speaker John Boehner said he was willing to put revenues on the table only if they are accompanied by spending cuts. (Read More: Obama: Let's Get Fiscal Cliff Deal Before Christmas.)
