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(Reuters) – Chief executives from the nation’s largest financial firms on Thursday pressured the White House and Congress to reach a deal on the debt ceiling and deficit reduction, saying the consequences of inaction “would be very grave.”

JPMorgan’s Jamie Dimon, Goldman Sachs’ Lloyd Blankfein and Bank of America’s Brian Moynihan, among others, said in a letter that an agreement needs to be reached this week.

“A default on our nation’s obligations, or a downgrade of America’s credit rating, would be a tremendous blow to business and investor confidence — raising interest rates for everyone who borrows, undermining the value of the dollar, and roiling stock and bond markets — and, therefore, dramatically worsening our nation’s already difficult economic circumstances,” the letter said.

The letter from the chief executives come as Congress and the White House struggle to broker

(Bloomberg)The bipartisan deficit reduction plan gaining momentum in the Senate likely would require lawmakers to end the preferential tax treatment of capital gains and dividends.

The proposal doesn’t mention capital gains and dividends specifically, but the plan’s goals for income tax rates, federal revenue and progressivity likely would require Congress to raise tax rates on investment income, said tax analysts who favor and oppose preferential tax rates on capital gains and dividends.

The proposal, which would lower income tax rates and broaden the tax base, is similar to plans issued over the past year by a bipartisan fiscal commission and the Bipartisan Policy Center. Those plans suggested taxing capital gains and dividends as ordinary income for the first time since 1990.

“You cut marginal tax rates and you still want to have a progressive tax system, you have to tax capital gains,”

(Bloomberg) The U.S. may have its AAA credit rating cut by Standard & Poor’s Ratings Services, which said there is a growing risk of a policy stalemate enduring beyond any near-term agreement to raise the debt ceiling.

The long-term rating may be lowered by one or more notches into the AA category in the next three months if S&P concludes Congress and President Barack Obama’s administration haven’t achieved a credible solution to the rising U.S. government debt burden and aren’t likely to achieve one in the foreseeable future, according to a statement today.

“Owing to the dynamics of the political debate on the debt ceiling, there is at least a one-in-two likelihood that we could lower the long-term rating on the U.S. within the next 90 days,” S&P said.

The debt limit’s proximity has left investors unfazed, with the Treasury attracting higher-than-average demand for

Bloomberg: The secret details of a loan Goldman Sachs & Co., took in 2008 have just been released and show the bank was loaned $15 billion from the U.S. Federal Reserve and was the biggest single loan from a lending program whose details have been secret until today.

The program, which peaked at $80 billion in loans outstanding, was known as the Fed’s single-tranche open-market operations, or ST OMO. It made 28-day loans to units of 19 banks between March 7, 2008, and Dec. 30, 2008., In response to a subsequent Freedom of Information Act request for details, the central bank disclosed borrower names, amounts borrowed and interest rates.

ST OMO is the last known Fed crisis lending program to have its details made public. The central bank resisted previous FOIA requests on emergency lending for more than two years, disclosing details

Obama, in his last weekly address, suggested that hedge funds along with oil companies should have a tax increase in order to cut the deficit. MSNBC estimates that Obama’s proposal would raise hedge fund manager’s taxes by up to $21 billion.

“If we choose to keep those tax breaks for millionaires and billionaires, or for hedge fund managers and corporate jet owners, or for oil and gas companies pulling in huge profits without our help – then we’ll have to make even deeper cuts somewhere else.” Obama said on Saturday.

Obama’s tax increases include:

• End some tax credits for oil and gas companies
• Tax private equity or hedge fund managers income as earned rather than capital gains rates
• Limit itemized deductions for the nation’s highest earners
• Change the depreciation formula for corporate jets
• Repeal tax benefit for an inventory accounting practice used by many manufacturers

The White House estimates that the changes would raise