Business leaders urging compromise on budget, debt issues

An additional 9 percent said the political stalemate would have a much greater effect. 

Business groups, including the U.S. Chamber of Commerce and the National Retail Federation, among others, have urged lawmakers to quickly move forward on dealing with short-term budget issues so they can tackle the looming long-term deficit issues. 

Overall, CEOs expectations for the economy's expansion for the next six months declined slightly in the third quarter to 79.1 from 84.3 in the previous quarter, while they continue to expect steady but slow economic growth.

"CEO expectations for the next six months remain essentially the same with some downside bias," McNerney said.

Expectations for sales and capital investment each declined modestly in this survey.

The index is at about its long-term average of 79.3. 

"This is not an economy as robust as we'd like it to be," said John Engler, president of BRT.

He cited a whole agenda of unfinished items that could help boost business confidence including immigration reform, trade agreements and tax reform. 

Expectations for economic growth matched the 2.2 percent annual rate reported in last quarter’s survey. 

"While U.S. business performance remains strong, as evidenced by robust recovery in the automotive sector, business leaders still see headwinds preventing a more sustained, robust recovery," McNerney said. 

Overall, hiring expectations were essentially flat, ticking up only slightly from the previous quarter due to fewer CEOs expecting a decrease in hiring.

This post has been updated.