Posted on 11/13/2012 4:27:30 AM PST by 2ndDivisionVet
Aetna Inc. Chief Executive Mark Bertolini, who is among a dozen chief executives meeting with U.S. President Barack Obama later this week, on Monday warned that companies are preparing backup plans that include layoffs if the White House and congressional leaders are unable to reach a deal to avoid the combination of tax increases and spending cuts known as the "fiscal cliff."
"The American people are going to suffer because we'll lay them off--because we know how to respond to these kinds of situations," Mr. Bertolini warned at a Wall Street Journal CEO Council event.
The comments come seven weeks before the Jan. 1 date on which spending cuts and tax increases take effect. Mr. Obama and U.S. House Speaker John Boehner (R, Ohio) last week each defended their competing plans for resolving the budget fight, even as they opened the door to a potential compromise. Mr. Obama meets with Democratic and Republican congressional leaders next Friday--after he has received input from executives and labor leaders.
The Congressional Budget Office has warned of a recession if leaders fail to act. Mr. Bertolini--who said in an interview that he is presenting contingency plans to his own board in two weeks--used Aetna as an example of how real-world layoffs could be set in motion.
"We have contingencies built in and as we watch the economy develop, we make decisions along the way: Do we release capital expenditures? Do we open up hiring?" he said. "Our goal so far is to freeze headcount until we know where the economy is headed."
But a contraction in the economy could set in motion a damaging chain of events. Mr. Bertolini said that a 1.7% contraction in gross domestic production translates into a 1% increase in unemployment--and an increase in medical costs of 100 basis points...
(Excerpt) Read more at foxbusiness.com ...
Let the cliff happen - what can be wrong with cutting 20% from everyone? Our family had to make those cuts, why not the government and it’s contractors? The ships are already in the pipeline, with money to pay for them, maybe not all we want, but in four years with less debt maybe we can restart that engine.
Let er rip.
Bring it on and “let’s roll!”
Uh oh. I smell a sex scandal brewing at Aetna.
Well over a month ago, my company decided it was going to switch its major health care provider from Aetna to Cigna. The cost of doing that to Aetna was estimated at $650 million a year. Hope someone was fired over that boneheaded decision. Taht could be but one of the reasons Aetna’s hurting a tad.
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