Goldman Sachs' Solomon, Pfizer's Bourla, More CEOs Implore Biden, McCarthy To Avoid Disastrous Default

Zinger Key Points
  • Business leaders urge government and lawmakers to find a deal in order to avoid a catastrophic default.
  • Investors anxiously await the outcome of Tuesday's Biden-McCarthy meeting.

More than 140 top executives of American corporations issued a letter urging the government to reach a solution to promptly lift the debt ceiling and avert the disastrous implications of a default, just a few hours ahead of the key Joe Biden-Kevin McCarthy meeting later Tuesday.

Business leaders including Goldman Sachs Group Inc. GS's David Solomon, Pfizer Inc. PFE's Albert Bourla, Morgan Stanley MS's James Gorman, Macy's Inc. M's Jeff Gennette, and Lazard LtdLAZ's Kenneth Jacobs signed the letter. 

The business community said "action to end the pending debt crisis is necessary now," since failure by the federal government to fulfill its obligations would have disastrous implications.

“Much worse will occur if the nation defaults on our debt obligations, which would weaken our position in the world financial system,” the signatories wrote. 

In the letter, the leaders blamed a political deadlock over the debt ceiling in 2011 for causing a 17% decline in the stock market in the months that followed. 

The White House requested tax increases from Republicans last week to close the budget gap and reach a deal, but Republicans quickly shot down the idea, sending a clear message that tax increases would not be part of any compromise.

The yield on the one-month Treasury note, a gauge of market worry over the debt limit agreement, was 5.55% prior to the Biden-McCarthy meeting on Tuesday and is falling for the second session in a row, showing slightly more market optimism for a deal. 

Photo via Shutterstock. 

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Posted In: GovernmentNewsBondsPoliticsManagementTreasuriesTop StoriesMarketsGeneraldebt ceilingJoe BidenKevin McCarthy
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