General Electric CEO Jeff Immelt says pulling back from the fiscal cliff isn’t rocket science.
The cliff refers to massive spending cuts and tax increases that will begin Jan. 1 unless the government takes action.
“There’s no reason why this can’t get resolved,” he tells CNBC.
Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation
“Everybody believes we’ll be plus or minus 10 percent of Simpson-Bowles. Let’s get it done.”
The Simpson-Bowles National Commission on Fiscal Responsibility and Reform recommended a combination of $200 billion in discretionary spending reductions per year and $100 billion in tax hikes.
“This is a complete and important distraction at a time when the country doesn’t need it,” Immelt says. “I don’t get why we can’t do something this important.”
He says mid-market companies already have slowed down their operations because of uncertainty about the fiscal cliff, and that overall investment would be higher without the cliff looming.
Investors apparently aren’t too worried about it at this point. “Markets have yet to price in a meaningful fiscal shock," Bank of America economists write in a report obtained by U.S. News & World Report.
If the government takes steps to avoid the cliff, the Standard & Poor’s 500 Index should rise to 1,450 by year-end, a 3 percent gain from Wednesday’s close, they say.
If the government does nothing, and the country falls over the cliff, the S&P 500 should plummet 11 percent to 1,250 by Dec. 31, the economists predict.
Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation