Aetna Inc. Chief Executive Officer Mark Bertolini said he may freeze hiring or reduce jobs at the health insurer, and expects similar moves by other companies, if President Barack Obama and Republicans don’t reach a deal to avoid the “fiscal cliff” of tax increases and spending cuts.
Bertolini said he’s considering eliminating jobs at the Hartford, Connecticut-based company, the third-biggest U.S. health insurer, to guard against a potential recession should Obama and Congress fail to reach an agreement. In a phone interview, he said he is less optimistic after yesterday’s election maintained divided power in Washington.
“Because, the arithmetic in Washington hasn’t changed in any great shape or form, we now face the issue of ‘Can this president and this Congress come together to fix the debt?’” Bertolini said. “To the degree we go over the cliff we’ll react immediately and I’m sure a lot of us will as well.”
Voters yesterday re-elected Obama, a Democrat, to a second four-year term, kept Republicans in control of the U.S. House of Representatives and left Democrats in charge of the Senate. Without a budget deal, the federal government faces $600 billion in automatic taxes and cuts early next year that the Congressional Budget Office has said could halt economic growth.
Bertolini said delays or cuts to Obama’s $1.2 trillion health-care overhaul may be part of the solution as the U.S. seeks a long-term fix to its budget deficit. The overhaul’s subsidies to help the uninsured buy coverage may be scaled back or phased in, or their onset delayed past a scheduled 2014 start date, he said.
The health law would extend coverage to about 30 million Americans over the next decade, according to the CBO. Including taxes and fees, the overhaul is expected to reduce the deficit by $109 billion in that time, the agency said in July.
Bertolini was among 80 CEOs in a “Fix the Debt” coalition that called on Obama and the Republicans to compromise last month. While the president’s relationship with the business community has been “strained at best,” there’s widespread support for reaching a deal, he said.
“There have been people working in a bipartisan way,” he said. “It’s been a minority and the election’s gotten in the way. Now would be the time for the president to convene the group, set the agenda, and don’t let them out of the room until they have a deal.”