The top executive of one of the world's biggest banks warned Congress and President Obama yesterday that the economy can't wait until after the election to resolve major tax issues and other big, long-term problems.
Failing to act, said Jamie Dimon, JPMorgan Chase & Co.'s chairman and CEO, could even push the U.S. back toward recession.
"It may affect the continued growth of the country before we get to the election," Dimon told nearly 200 people at Ohio State University at a forum on the Global Cities initiative, which focuses on the economic health of metropolitan areas. The bank, the largest private employer in central Ohio with 19,000 workers, is a co-sponsor of the program and has pledged to invest $10 m illion in the five-year program.
Tax cuts put in place when George W. Bush was president expire at the end of the year, as do the Social Security tax cuts enacted as part of Obama's efforts to stimulate the economy. The country also faces looming debt issues and worries about the financial stability of Social Security and Medicare.
Given the acrimony between Republicans and Democrats heading toward November's elections, decisions about these issues might be put off until after then.
"It would be too late," Dimon told NBC's David Gregory, the host of Meet the Press, who interviewed Dimon during the luncheon.
The U.S. is approaching a "fiscal cliff" that could zap the economy if businesses and consumers pull back on spending because of uncertainty over what could happen in Washington at year's end, Dimon said. Businesses also are frustrated by regulatory issues, including banks seeking clarity regarding rules about mortgages.
"We should be creating confidence today," said Dimon, who said he remains a Democrat, but just " barely."
Dimon pushed for Congress to pass the deficit-cutting plan put together by a panel created by Obama and headed by former Sen. Alan Simpson, R-Wyo., and former Clinton White House chief of staff Erskine Bowles. In 2010, it outlined deep spending cuts along with the elimination of some tax breaks.
"I think it does some wonderful things," Dimon said. "It would show we could do the right thing."
Dimon was critical of Democrats and Republicans not working together in Washington. He contrasted them with the mayors and governors he deals with, who he said are more interested in getting things done than party affiliation and ask what they can do to help the bank.
"The best mayors are good business people," he said.
He credited Bush and Obama with stepping in during the financial crisis, but he said the 4 million, private-sector jobs that have been added in the past two years are half the number they could have been. He cited last summer's debate over raising the debt ceiling as an example of the partisanship that has gripped Washington.
Dimon said the Global Cities Initiative reflects Chase's commitment to cities, including growing cities such as Columbus.
"Cities do a great job of planning," he told Gregory. "They are growing."
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