Go Big on Deficit Reduction, Business Groups Say
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Some of the nation’s largest and most influential business groups, including the U.S. Chamber of Commerce, are urging the joint deficit reduction committee to go beyond its mandate to trim the national debt by $1.2 trillion to $1.5 trillion.
In a letter sent to the 12 members of the supercommittee, 155 business groups, including the National Association of Manufacturers, the Business Roundtable, and numerous state and local chambers of commerce said that there is a “desperate need” to simplify and fundamentally reform the tax code in a way “that encourages investment and employment,” including changes to the individual and corporate tax rate.
“Globally, in just the past four years, 75 countries have cut their corporate tax rates to make themselves more tax-competitive and increase economic growth. America’s largest trading partners—Canada, Great Britain, and Japan—have all taken steps to become more competitive,” the letter said.
The letter also says that major entitlement reform “should be made as quickly as possible so that the benefits of current and near-term retirees are secured and changes in future benefits can be phased in over a period of time.”
“We believe that putting in place a multi-year growth and deficit reduction strategy that reforms entitlements, implements comprehensive tax reform, and stabilizes the debt as a share of the economy is critical in creating the stability the business community needs, growing the economy, and restoring Americans’ faith in the political system,” the business groups wrote.
Some supercommittee members, including Sens. Rob Portman (R-OH) and Max Baucus (D-MT) in recent interviews with Free Enterprise magazine, have signaled that they would like to begin the process of overhauling the tax code. Both lawmakers also suggested that no sacred cows should be spared from the negotiating table, including spending on entitlement programs, including Medicare and Social Security.
The supercommittee was created as part of last summer’s cliff-hanging compromise among lawmakers and the White House to increase the debt ceiling. Congress and the administration punted difficult and unresolved decisions related to spending cuts, entitlement reform, and tax increases to the supercommittee’s six representatives and six senators with a simple mandate: come up with a plan to trim the federal debt by at least $1.2 trillion by November 23.
If the supercommittee fails to produce a plan, or if Congress doesn’t approve it by December 23, cuts to Democratic priorities such as Medicare and portions of Obamacare and Republican priorities such as national defense are automatically triggered. A simple majority, or seven members, of the supercommittee must approve a plan before it can be submitted to Congress. The House and Senate would then hold an up-or-down vote on the proposal, and with simple majority support, it would become law.
Read the Free Enterprise interview with supercommittee members Sens. Rob Portman and Max Baucus.