Failure To Avert Fiscal Cliff Could Damage World's Confidence In U.S.
ROBERT SIEGEL, HOST:
From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.
MELISSA BLOCK, HOST:
And I'm Melissa Block. It's time for Plan C. Washington's efforts to avoid massive tax hikes and spending cuts come January 1st seem to be in disarray. Last night, House Speaker John Boehner failed to get enough Republicans to go along with what he called his Plan B. NPR's John Ydstie talked with members of the business community about whether that failure is seen as a setback or clears the way for more productive negotiations.
JOHN YDSTIE, BYLINE: There were fears that the financial markets might fall dramatically in response to the speaker's failure, but after a quick sell-off of almost 190 points on the Dow, the market regained its footing. The Dow ended down about 120 points, or just under one percent. The other major indexes had similar results.
The news obviously weighed on the markets, but Peter Boockvar, an equity strategist and portfolio manager at the Wall Street firm Miller Tabak, says there's anxiety, but investors didn't panic.
PETER BOOCKVAR: Well, the market right now is up for the week. So I don't think outside of today's reaction it's really saying much. The market expects a deal, and again that's why we're up on the week.
YDSTIE: Paul Stebbins is more worried.
PAUL STEBBINS: The breakdown of events last night would suggest that there's now sort of more urgency than ever to get something done.
YDSTIE: Stebbins is one of a large group of business leaders working with an organization called Fix the Debt, which is pressuring policymakers to get a credible deal. He's executive chairman of World Fuel Resources, a global company that sells and distributes marine, aviation and ground transport fuels.
STEBBINS: If you look at this from a guy who's running a company that's got 70 offices in 26 countries and is dealing with a global economy, the entire world is watching with utter disbelief as we sort of, you know, hurl ourselves towards this deadline. And it's all about competence.
YDSTIE: That is, whether the world will lose confidence that the greatest democracy on Earth, according to Stebbins, can solve its problems. Stebbins says a failure to get a deal by January 1st could do great damage to the economy and global markets. Scott Talbot is senior vice president for public policy at the Financial Services Roundtable, a group that represents large financial institutions. He says this is par for the course for big Washington negotiations, which he says usually have three big blowups before there's a deal.
SCOTT TALBOT: If the negotiations for this deal follow history or the historical pattern, we could see a couple steps forward right after Christmas, one more blowup and then a deal right before the clock strikes midnight on December 31st.
YDSTIE: Talbot says his organization remains hopefully optimistic, but he says the deadline is closing in, the clock is ticking, so the level of anxiety is increasing. There was lots of finger pointing on Capitol Hill today, but both sides called for a return to negotiations to resolve the fiscal cliff before the end of the year. John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright National Public Radio.