A coalition of business groups led by the U.S. Chamber of Commerce has urged Congress and President Obama to act to avert the "fiscal cliff" of expiring tax cuts and automatic spending cuts. Economists have warned that the mix of higher taxes and budget cuts could send the country into a recession.
"The time to act is now," the business groups said in a letter. "It is imperative that action be taken now to avert a potential crisis."
The letter was signed by nearly 300 business groups, including many state and local chambers of commerce and Washington-based organizations such as the National Association of Manufacturers and the National Restaurant Association.
The businesses called for the extension of all of the George W. Bush-era tax cuts, the alternative-minimum tax relief, and an alternative to automatic spending cuts known as the sesequester. All told, $1.2 trillion would be cut over the next decade under sequestration. The letter also urged Congress and the president to commit to tackling broad tax reform and hammering out a plan to rein in entitlement spending.
"The threat of further harm to the American economy is real, and the American people and business community should not be forced to wait," the business groups wrote.
No action on the fiscal cliff is expected until after the general election and experts say they are increasingly concerned that little will be done in the ensuing lame-duck session of Congress.
On Tuesday, the ratings agency Moody's Investors Service said that if the fiscal standoff is not resolved, it might lower country's top-notch Aaa credit rating. Ratings agency Standard & Poor's cut the U.S. credit rating a year ago amid the fight between Congress and the White House over the debt limit.
The nonpartisan Congressional Budget Office has warned that a failure to address the fiscal cliff would send the economy into another recession and drive the unemployment rate above 9 percent.