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What Employers, Economists and Market Analysts Are Saying About the Tax Agreement

December 15, 2010

Below are statements from employers, economists and market analysts in support of the tax agreement that the Senate approved today by a vote of 81-19.  The House expects to vote on the agreement later this week, which will prevent a massive, job-killing tax hike from kicking in on January 1.

Susan Eckerly, National Federation of Independent Businesses (NFIB): “Senate passage of the tax compromise is a good step – the first step to encourage the certainty that the small-business community needs and has repeatedly asked for…Knowing their tax liability will remain low and including a workable estate tax compromise that will not threaten the family business are key components to a small business’ ability to move forward, grow their business and create jobs. Changes to this compromise would jeopardize the needed relief and certainty small businesses need. We encourage the House to take up this measure quickly and pass this bipartisan bill in its current form.”

Larry Burton, Executive Director, Business Roundtable: “Restoration of these provisions lifts an uncertainty for businesses that will improve their ability to employ more workers and grow the economy.”

Bruce Josten, Executive V.P.  for Government Affairs, U.S. Chamber of Commerce: “Enacting this bipartisan framework forged by the President and Congress is one of the best steps Washington can take to eliminate the uncertainty that is preventing our employers from hiring, investing, and growing their businesses.”

Information Technology Industry Council: “The high-tech industry firmly believes that enacting these important business tax provisions will spur capital investment and help create certainty in our economy.  For example, the research and development tax credit along with the other business provisions will return significant results in job creation, investment in our own economy, increased global competitiveness, and innovative technologies that lead to a better quality of life. Enacting these pro-investment provisions should be a priority while our country continues towards economic recovery.”  

Keith Hennessy, former Assistant to President George W. Bush for Economic Policy and Director of the U.S. National Economic Council: “Recommendation: No-brainer.  Support the deal.”

The Economist: “Economists had generally projected growth next year at only 2.5%, and the biggest risk to that already tepid outlook had been the prospect that some or all of Mr. Bush’s tax cuts would expire at the same time as much of Mr. Obama’s temporary stimulus. Tonight’s deal is likely to lead to a round of upward revisions.”

Wells Fargo Research: “Net, the result of this proposal on our U.S. outlook is that we are now expecting slightly higher GDP growth over the next year, led by gains in consumer spending and business investment… Most importantly, the reduction in uncertainty should allow both investors and consumers to plan for the year ahead. These actions, once implemented, may provide firms with the consumer demand and capital needed to start expanding payrolls.”

Bank of America/Merrill Lynch Research: “[W]hen the deal does get signed into law, it will force us to boost our GDP estimates for 2011.”

Goldman Sachs Research: “The ‘framework’ that President Obama and congressional Republican leaders have agreed to, if enacted, could boost growth above our recently revised forecast for 2011.” 

Steve Goldstein, MarketWatch:  “Wall Street economists were tapping into their spreadsheets Tuesday, ready to ratchet up their economic growth forecasts for next year in light of the tax deal struck by President Barack Obama and congressional Republicans, particularly the surprise one-year reduction in payroll taxes.”

Mark Zandi, Moodys: “The fiscal policy compromise reached this week by the Obama administration and Congressional Republicans will be good for the economy next year. The planned temporary tax cuts and spending increases will provide a substantial boost to growth in 2011, ensuring that the still-fragile economic recovery evolves into a self-sustaining economic expansion.”

Peter Cardillo, Chief Market Economist, Avalon Partners: “From a psychological standpoint, this probably will continue to boost the markets in the sense that this most likely will lead to an expansion in economic activity. People are going to be feeling a little bit better, and that means they’ll be maybe even spending a little bit more.”