NEW YORK — The chief executive officers of CVS Caremark Corp. and Walgreen Co. are calling on Congress and President Obama to work together to reach a resolution on the looming "fiscal cliff."
In statements released Wednesday, CVS Caremark president and CEO Larry Merlo and Walgreens president and CEO Greg Wasson said policymakers must come to an accord by the year’s end or risk derailing the economic recovery and triggering possibly more dire consequences for already hard-pressed consumers and the nation as a whole.
"CVS Caremark customers are the hard-working American families who are making decisions now about how to budget for the holidays and early next year. Their confidence has already been tested by persistent high unemployment and fragile economic growth. Our customers want to know that our leaders in Washington are working on their behalf to solve the real problems facing America," Merlo said in his statement.
CVS Caremark is "pleased that policymakers of both parties appear committed to working together to avert the looming ‘fiscal cliff’ and focus on pragmatic, sensible solutions," according to Merlo. But he noted, "What America and American families need now is follow-through.
"CVS Caremark urges President Obama and Congress to work together, on a bipartisan basis, to enact tax reform that spurs economic growth, entitlement reform that preserves America’s safety net for future generations and sound fiscal policy that sets the stage for long-term growth and job creation," Merlo stated.
The fiscal cliff threatens a return to recession and higher unemployment. Without a deficit reduction agreement, January will mean the start of $7 trillion of tax hikes and spending cuts over a decade. Going "over the cliff" would entail cutbacks in defense and nondefense spending, the expiration of the Bush tax cuts, the end of a payroll tax holiday and extended unemployment benefits, as well as the onset of Medicare reimbursement cuts.
Such a scenario would result in the largest one-year drop in the annual deficit as a percent of the economy since 1969, yet it would plunge the nation back into a recession next year, based on the loss of more than $500 billion from the economy. It would also raise the unemployment rate to 9.1%, according to the nonpartisan Congressional Budget Office.
"Walgreens supports the bipartisan efforts of policymakers in Washington, including the president and Congressional leadership, who are working hard together to achieve consensus solutions to avoid the fiscal cliff before the end of the year," Wasson said in his statement.
He stressed that a resolution to the federal revenue and spending issues is vital to the nation, its economy and further economic recovery, in addition to the United States’ future global competitiveness.
"We understand that the decisions necessary to avoid the fiscal cliff are far from easy. But these important fiscal decisions are critical to families across America, like the customers and patients who depend on Walgreens for their consumer and health care needs," Wasson explained. "It is absolutely clear that we need to protect their jobs, health and economic future by avoiding the fiscal cliff, curbing the federal debt and bringing our nation to long-term, sustainable fiscal health.
Wasson added that "tough decisions in Washington" that balance revenue and spending considerations, including entitlement reform, are critical to U.S. businesses such as Walgreens, which "will benefit from federal fiscal clarity to make investments that ultimately advance jobs, growth and prosperity for all."
He stated, "We hope Walgreens’ view will play a helpful role as policymakers in Washington strive to achieve the consensus they seek to avoid the fiscal cliff and put America on a healthy fiscal course that will ensure our growth, prosperity and competitiveness well into the future."
