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Two-thirds of U.S. CFOs Say Reduce Government Spending to Balance Deficit
49% say national health care program will increase their product pricing and 37% say it will decrease their hiring

May 2, 2011 (SmartPros) In a national biannual survey of U.S. CFOs and senior comptrollers conducted by Grant Thornton LLP, 64% say the best way to reduce the U.S. federal deficit is to reduce spending, while 35% say that there should be roughly equal measures of reduced spending and increased taxes.



With regard to the newly enacted national health care law, 49% said it will increase the pricing of their goods, 40% said it will decrease their company’s growth and 37% said it will decrease their hiring.

The three top areas of concern in terms of pricing pressure are employee benefits (75%), raw materials (47%, up from 27% six months earlier) and energy (45%, up from 21% six months earlier).

The best way to reduce the U.S. federal deficit is to:
  Reduce spending 64%
  Roughly equal measures of reduced spending and increased taxes 35%
  Increase taxes 1%

Would you support a VAT tax if it directly reduced personal tax rates?
  Yes 49%
  No 51%

What impact will health care reform have on your business?
  Employment (your headcount)  
    Will increase hiring 5%
    Will have no impact on hiring 58%
    Will decrease hiring 37%
  Company growth  
    Will help increase growth 10%
    Will have no impact on our growth 50%
    Will help decrease growth 40%
  Your product pricing  
    Will increase pricing 49%
    Will have no impact on pricing 46%
    Will decrease pricing 5%

About which type(s) of pricing pressure are you most concerned? (Select all that apply.)
  October 2010  April 2011
  Employee benefits (e.g., health care, pensions) 84% 75%
  Raw materials (e.g., food, metals) 27% 47%
  Energy 21% 45%
  Company insurance (not including health care) 11% 17%
  Other 13% 19%

Is your company making any changes to the average costs per employee in any of these employee benefit and compensation areas?
  October 2010 April 2011
  Increase Same Decrease Increase Same Decrease
  Salary raises 22% 65% 14% 30% 58% 12%
  Bonuses 14% 63% 23% 19% 63% 19%
  Stock options/equity-based compensation 3% 79% 18% 5% 81% 14%
  401 (k) match 5% 84% 11% 11% 81% 8%
  Health care benefits 21% 49% 30% 21% 53% 26%
  Life insurance benefits 5% 86% 10% 5% 88% 7%
  Disability benefits 6% 86% 8% 5% 87% 8%

* Percentages may not total 100 due to rounding.

2011 SmartPros Ltd. All rights reserved.

Source: Grant Thornton

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