U.S. Chamber Calls on Deficit Panel to Tackle Taxes, Entitlements
Overhauling the tax code and entitlement programs should be part of the deficit reduction proposal that a new bicameral Congressional committee is charged with developing, the U.S. Chamber of Commerce said Tuesday.
The committee was created under a $2.1 trillion deficit reduction deal that was struck to raise the debt ceiling. The chamber, which advocates in Washington for more than 3 million businesses and organizations, said the amount may not be enough to protect the country’s creditworthiness unless the committee deals with entitlement and tax reform.
“While this magnitude of deficit reduction is a step in the right direction, it would fall far short of fixing the deficit and debt problem America currently faces; it would not stabilize the debt to [gross domestic product] ratio and would not put this ratio on a downward trajectory; and it would fall far short of achieving a balanced budget,” R. Bruce Josten, the chamber’s executive vice president for government affairs, wrote in a letter to all 12 members of the joint committee. “It alone would likely not prevent future downgrades to the debt rating of the United States. Even with successful implementation, the amount of publicly held debt outstanding by the United States would rise to $16 trillion at the end of 10 years.”
“The Chamber urges you and your colleagues on the Joint Select Committee to make every effort to fundamentally address these issues by engaging in a true reform of entitlement programs and a complete restructuring of the U.S. tax code,” Josten added.
The debt ceiling deal struck among House Republicans, Senate Democrats and the White House makes the new committee responsible for identifying at least $1.2 trillion in deficit reduction measures over the next decade. That is in addition to the law’s spending cuts, which add up to $917 billion over the next 10 years.
Though the group offered few specifics about what it would like Congress to do, the chamber contends that the joint panel is the best avenue for taking on entitlement and tax reform in order to put the nation on a fiscally sustainable path.
“Entitlement spending is out of control, on autopilot, and leading America toward fiscal disaster,” the chamber said in its letter. “Moreover, Congress cannot fix the root cause of the problem without addressing the entitlement programs of Medicare, Medicaid, and Social Security.”
As for tax reform, the group sees on opportunity to reduce tax rates, which it says would help make the nation more competitive.
“The Chamber urges you to consider how the current tax laws act as an impediment to worldwide competitiveness, a deterrent to saving and investment, and an obstacle to innovation and entrepreneurship,” the group wrote. “Accordingly, the Chamber believes that the current code needs a comprehensive reform to lower overall marginal tax rates, to encourage saving and investment, to foster global competitiveness, increase capital accumulation, attract foreign investment, and drive job creation.
“Further, changes to the tax code should not single out specific industries or individuals for punishment, and should allow the marketplace, and not the tax system, to allocate resources,” the chamber added. “Finally, comprehensive tax reform should include realistic transition rules to provide adequate time for implementation and help minimize economic dislocations individuals and businesses may encounter in transitioning to the new tax system.”