Business Roundtable praises Gang of Six plan, AFL-CIO rips it

The Gang of Six’s bipartisan deficit-reduction plan continued to make waves Wednesday, with a key business group expressing general support and a prominent union bashing it.

In a statement issued Wednesday, the Business Roundtable complimented the Gang’s proposal to lower the corporate tax rate and switch to a so-called territorial tax system for foreign profits.

But the AFL-CIO cast the plan as a proposal that would force only the working and middle class to sacrifice, by lowering tax rates on the wealthy and corporations and taxing healthcare benefits. 

Richard Trumka, the AFL-CIO's president, slammed the Gang of Six for giving “tax incentives for corporations to export good jobs overseas,” a common liberal criticism of the territorial system, and for cutting Social Security benefits.

"Both parties keep telling us that deficit reduction requires 'tough choices' and 'shared sacrifice' and 'taking on sacred cows.' … [But] the only sacred cows being gored are working people, the middle class, seniors and the poor," Trumka said in a statement.

Trumka also jabbed at Democrats who have expressed support for the Gang's plan, a faction that includes President Obama.

"We need to keep asking our leaders: 'Who got us into this mess?' It wasn’t working people. The people who got us into this mess are getting off scot-free, and this Gang of Six proposal shows they have accomplices in both parties."

The Gang of Six — composed of three Democratic and three Republican senators — unveiled their plan to fellow senators on Tuesday. It includes roughly $3 in spending cuts for every dollar in fresh tax revenue.

The framework asks relevant committees to do much of the heavy lifting in certain areas, including asking the Senate Finance Committee to report out a tax overhaul within six months.

The Gang of Six does, however, call for installing a single corporate tax rate of between 23 percent and 29 percent. The current top rate is 35 percent.

It also proposes a move to a territorial system, which would essentially mean American multinationals would only be taxed for profits made in the U.S. Under the current system, companies must pay taxes on all of their worldwide profits, but can defer paying until they bring those revenues into the U.S.

John Engler, the Business Roundtable’s president, also stressed that the $14.3 trillion debt ceiling needs to be raised by the Aug. 2 deadline, because of debts the country has already rung up.

“We recognize that the nation’s fiscal health requires significant structural reforms not only of the tax code but of the budget, including entitlements,” said Engler, whose group is an association of top chief executives. “A technical default due to the failure to raise the debt limit is not an option, and the Gang of Six has made an important contribution to resolving the current impasse.”

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