Wall Street CEO Larry Fink: Obama, Congress Must 'Act Now'

As debt talks continue in Washington, Wall Street has joined the Republican-Democrat fray.

On Monday, BlackRock CEO Larry Fink, along with representatives from a number of state pension funds, sent a letter to President Barack Obama and congressional leaders, insisting that the debt ceiling be raised before the United States defaults on its loans.

Titled "A Call to Reason - and Action," the letter warns that if America's credit is downgraded, the "fallout will be felt all across America."

Fink urges politicians to put aside their differences, or else the public pension funds -- and all of the nation's investments -- will suffer.

"The letter reflects our strong belief that without a credible action plan to reduce the deficit substantially -- and not simply raise the U.S. debt ceiling -- the U.S. debt will likely be downgraded by one or more rating agencies, with serious negative consequences for many of our clients," Fink told BlackRock employees about the letter on Monday.

The letter is signed by the heads of eight major pension funds, including the California Public Employees' Retirement System (CalPERS), the New York City Retirement System and the Florida State Board of Administration. Concerned about the financial future of American workers, the 11 financial professionals insist that the debt ceiling be raised to keep the United States' credit score level.

"The hardworking people we serve are the nation's savers; they want a strong future for America because their economic future depends on it," the letter states. "But today our nation's economic future is in doubt, and so is America's financial leadership in the world. Our country faces threats to its economic well-being that will inflict pain and hardship on all our citizens for many years to come if we fail to act -- and act now."

Fink is the founder and CEO of BlackRock, which manages more money than any other company in the world. The company has $3.5 trillion in assets under management. Fink was one of the highest paid financial CEOs in 2010, making $23.8 million in salary and stock.

Involved with the bailout packages of 2008-2009, Fink has worked with President Obama on a number of financial matters.

Democrats and Republicans have been going back and forth on a slate of issues related to the talks, neither wanting to give into the other's demands. The United States owes $14.3 trillion in loans, $500 billion of which has already come from pension funds.

Republican leaders, such as John Boehner, so far refuse to raise the ceiling unless Obama agrees to their tax cuts, claiming that tax incentives for the wealthy are the best way to create jobs.

Fink, however, disagrees. If U.S. credit is downgraded, it will devalue the dollar, he argues. This will have a number of negative consequences related to inflation and interest rates, and will severely damage the economy.

Simply put, business will not be able to afford to create new jobs. Tax breaks will likely not push the unemployment rate downward.

"Ultimately and most painfully, economic growth for our nation will stall for years to come and diminish the quality of living across America," the letter reads.

"Make no mistake about it: the consequences of such a downgrade are very real, and very serious."

In a final statement, Fink and the ten signatories urge that Washington look at the deficit problem rationally and quickly. Moving beyond their own investments, the pension chiefs hope that decision can be made immediately, for the sake of the country.

"A devastating outcome is by no means inevitable if you, as our elected representatives, put our nation's interests above party and politics. We urge you to act with unity of purpose and spirit of commitment -- and to act now."

The entire letter can be downloaded from the California Public Employees' Retirement System Web site.