By Scott Malone
BOSTON (Reuters) - The "fiscal cliff" is less than three weeks away, but most corporate executives are not strapping on their parachutes just yet.
A cross-section of executives from companies including DuPont Co
But many expressed confidence President Barack Obama and the Republican-controlled House of Representatives will reach a deal and avoid the worst-case scenario of tax hikes and sharp cuts in federal spending beginning next year.
"I think the fiscal cliff is on everybody's mind," said Stephen Sadove, chief executive officer of Saks. "It's certainly a solvable issue."
Despite all the warnings that failure to reach a deal could send the United States back into recession, corporate executives and Wall Street analysts are forecasting accelerating profit growth in 2013.
The companies in the broad Standard & Poor's 500 index <.SPX> are expected to experience a 10.9 percent rise in profit next year, according to Thomson Reuters I/B/E/S poll of analysts. That is well ahead of the 3.9 percent expected for 2012.
Those bullish forecasts by and large presume that President Obama and the House Republican leadership reach a deal.
"We're pretty much assuming the cliff gets solved," said Aetna Inc
Diversified manufacturer 3M on Wednesday forecast profit growth of about 8 percent next year - below its long-term 10 percent forecast but still taken as a respectable forecast by investors, who bid its shares down just 0.6 percent to $93.12 on the New York Stock Exchange.
Still, CFO David Meline said the budget standoff had taken a toll on revenue at the maker of Post-It notes and films used in television screens.
"There has been some impact in the market as a result of the uncertainty that's out there generally in the economy and certainly accentuated by all of the indecision that we see in Washington right now," said Meline. "It has slowed the business."
CVS Caremark Corp
"If it were to remain unresolved for an extended period of time it would eventually impact our business," Merlo said. "Our hope is that Washington's leaders would not allow that to happen."
HOLDING OFF ON SPENDING
The worries do have top CEOs holding back on spending -- DuPont Co's
"We're not going to spend as much as we thought next year," she said. "We've looked at every program and asked, 'Can we spend less money now and delay some programs six months?'"
Less than three weeks remain until the cuts, which were agreed to during the 2011 debt-ceiling debate, take effect. But as the deadline ticks closer, CEO confidence in the U.S. economy has held almost steady.
A quarterly survey by the Business Roundtable released on Wednesday showed that CEO confidence in the U.S. economy slipped a tad after dropping sharply to a three-year low in September.
The picture was mixed, with CEOs saying they were less likely to cut U.S. jobs in the next six months but more likely to cut U.S. capital spending.
The fiscal cliff standoff is just one of the concerns facing executives, who are also confronting a continued economic crisis in Europe and uncertain demand in Asia, said Boeing Co
"It's not the only headwind we face, but it is significant," McNerney said. "We would be recovering faster if it were not for the political uncertainty that we're facing."
U.S. House of Representatives Speaker John Boehner, a Republican who is Obama's counterpart in the negotiations, on Wednesday warned that "serious differences" remained between the two sides. The two parties differ about the right mix of higher revenues and lower spending to plug the long-term budget gap.
The saber-rattling on either side of the aisle has not fazed CEOs, many of who see it as a negotiating tactic.
"The way this deal will get done is when both sides put their hands on a proposal together just before the vote has to take place," said Goldman Sachs Group Inc
(Reporting by Scott Malone; Additional reporting by Ernest Scheyder, Caroline Humer, Phil Wahba and David Henry in New York and Jessica Wohl in Chicago; Editing by Patricia Kranz and Tim Dobbyn)