* Greifeld says lawmakers must set aside long-held positions
* Nasdaq head backs revenue increases, spending cuts
* Greifeld part of Fix the Debt Group, met Geithner
* Would be "fine" with higher taxes for the wealthy
* Calls for SEC self-funding, worried about sequestration
WASHINGTON, Nov 19 (Reuters) - Washington needs to
rediscover its ability to compromise and commit to a long-term
plan to reduce the nation's debt, the head of the country's
second-largest stock exchange said on Monday, warning that
lawmakers are flirting with disaster.
Nasdaq OMX CEO Robert Greifeld, in the latest
corporate call for congressional action, said lawmakers need to
think less about "winning."
Instead, he said Republicans must budge on tax increases,
while Democrats must give ground on spending cuts.
"The federal budget must be put on a path to sustainability
that can clearly withstand any changes in the political winds
that may occur in 2014, in 2016, and beyond. This means
additional revenues will need to be raised, including from
businesses, by broadening the tax base, while reducing the top
rates," Greifeld told an audience at the Brookings Institution,
referring to corporate tax rates.
"We also acknowledge that federal spending will need to be
curtailed, including spending on our favorite government-funded
Greifeld said the best that the markets can hope for in the
short term is for Congress to make a deal to avoid the year-end
"fiscal cliff" and then commit to deliver a longer-term "grand
bargain" on debt reduction during the first half of next year.
Greifeld's speech comes a few days after President Barack
Obama began negotiations with congressional leaders in an effort
to stave off the "fiscal cliff," a combination of spending cuts
and tax increase in early 2013 meant to cut the federal budget
deficit, but that also tip the economy back into recession.
If an agreement cannot be reached, then some $600 billion in
spending cuts and tax increases will kick in starting Dec. 31.
The combination of these two things at once could push the
country back into a recession, analysts say.
The Obama administration is pushing for Republicans to allow
tax rate cuts for the wealthiest Americans to expire as a way to
raise additional revenue.
Republicans, by contrast, want to largely rely on spending
cuts to tame the national debt, while extending the lower tax
rate for everyone.
"Why hasn't the government taken any action? Let's be candid
about this. Putting aside the rhetoric and posturing of the past
two weeks, the behavior in Washington in recent years confirms
that we've lost the ability to compromise," Greifeld said.
On Friday, Obama and top lawmakers agreed to work on a
framework for reforming the U.S. tax code and "entitlement"
programs next year.
Although this longer-term plan would not be enough to avert
the more immediate "fiscal cliff," it is widely seen as an
important step toward achieving a compromise.
'FINE' WITH WEALTHY PAYING MORE TAXES
Greifeld confirmed on Monday that he is a member of the Fix
the Debt campaign, an ad hoc lobby group made up of more than 80
CEOs pushing for long-term deficit reduction.
The group advocates for reforms to entitlement programs such
as Medicare and Medicaid, as well as "pro-growth tax reform"
that would lower rates and raise revenue.
Greifeld told Reuters on the sidelines of the Monday event
that he met last week with Treasury Secretary Timothy Geithner,
who is expected to be a main negotiator for the Obama
administration on the "fiscal cliff."
Greifeld said he came away feeling Geithner was "pragmatic
"That is a good sign," he said.
He also said during the interview that he would be "fine"
with wealthier Americans paying more in individual taxes as long
as they were properly balanced with spending cuts.
"I think to the extent that the Bush-era tax cuts lapse and
we went back to the rates that were in the Clinton time ... if
that were part of a balanced plan, I would be fine with that,"
he told Reuters.
If those tax cuts expire, the wealthiest would see their
rates spike to 39.6 percent from 35 percent.
Greifeld declined to offer his view on which federal
spending programs should be cut, although he noted there was "no
one program big enough" and the government should be looking at
small steps it can take across the board.
"More likely, you are going to see budget sanity be achieved
by a thousand small steps as opposed to one or two large ones,"
He would have concerns, however, about extending such
smaller cuts to the U.S. Securities and Exchange Commission -
the federal agency charged with regulating Nasdaq OMX and other
The White House's Office of Management and Budget has
projected that, if the sequestration portion of the "fiscal
cliff" takes effect, the SEC would be faced with an 8.2 percent
cut, or $108 million to its $1.3 billion budget.
Greifeld said such a cut could harm the ability of exchanges
to get things done. That is because federal securities laws
require exchanges to seek SEC approval before they change rules
or modify fees.
"Any decline in the SEC's ability to act will hurt our plans
for 2013 and beyond, so that would be a bad outcome for us," he
The SEC's budget currently does not impact the deficit
because the amount appropriated by Congress is offset by fees
the agency charges the industry.
Greifeld believes the SEC "should be a self-funded
organization" similar to other financial regulators such as the
Federal Deposit Insurance Corp.