By Bernie Becker - 07/20/11 06:23 PM EDT
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.
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.”