By Erik Wasson - 08/16/11 09:25 PM EDT
The U.S. Chamber of Commerce on Tuesday urged members of the supercommittee to strike a grand bargain on reducing the deficit.
Despite pessimism in Washington that the panel will be unable to agree on even a bare minimum of cuts by the Nov. 23 deadline, the Chamber urged the group to overhaul the tax code while undertaking a fundamental reform of entitlements.
But in its statement, the Chamber was silent on the controversial question of whether any revenue should be increased in a big deal, but it did lay out other guidance for how tax reform could be completed.
The supercommittee is tasked with finding $1.5 trillion in deficit savings, but the Chamber wants it to go for much deeper cuts — an opinion shared by credit rater Standard & Poor’s, which this month downgraded the nation's credit rating.
“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 GDP ratio and would not put this ratio on a downward trajectory; and it would fall far short of achieving a balanced budget,” Josten wrote.
“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,” he noted.
The Chamber wants the group to address Medicare, Medicaid and Social Security.
On tax reform, the group wants tax reform that lowers marginal rates, and which does “not single out specific industries or individuals for punishment.” It urges any reform to allow for a transition to new rules.
Notably, the Chamber did not rule out money from closing loopholes as a means of deficit reduction. This issue has consistently divided Democrats and Republicans, and led to the collapse of a grand deficit bargain between President Obama and Speaker John Boehner (R-Ohio) last month. Republicans want any new revenue from closing loopholes to be used to lower tax rates.