US CEOs wary of health costs, end of Bush tax cuts
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U.S. chief executives are becoming more confident about the economy, though many worry high employee health care costs and the possible end of Bush-era tax cuts for the wealthiest Americans could hurt businesses.
Vistage International, an organization for chief executives, said on Monday its confidence index edged up to 95.1 in the third quarter from 94.4 in the prior three months. The index is 12 percent above its year-earlier level of 84.9.
The survey, which was conducted between Sept. 14-24 and covered about 1,800 CEOs of small-to-medium sized companies, found that 92 percent of the respondents expected health costs to rise as companies implement the healthcare reform plan, designed to provide insurance to 32 million Americans who don’t have coverage.
Two-thirds of the CEOs said their businesses would suffer if the contentious Bush-era tax cuts were not extended.
The Obama administration is opposed to an extension of the tax cuts, arguing that the cost is too high as the country struggles to emerge from recession with a massive budget deficit.
The survey also found the CEOs did not expect a new recession, even though the recovery lost considerable momentum in the second quarter.
“No double dip is good news, but healthcare, taxes, access to credit, and overall economic uncertainty remain obstacles to jump-starting sustainable growth,” said Vistage International chairman Rafael Pastor.
Still, just over half of the CEOs said they would not start their businesses in the current environment if they had to. About 46 percent said they planned to expand their workforce up from 39 percent a year ago.
“Nonetheless, fewer firms planned additions to their payrolls than any time prior to the 2008-09 recession,” said Pastor. “Uncertainty about the level of future sales as well as concerns about the costs of new health care regulations continued to hold hiring plans at lower levels.”
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WASHINGTON (Reuters)
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