Business groups oppose tax hikes to cover scheduled spending cuts

Engler said last week that the nation's top chief executives oppose the across-the-board cuts included in the sequester that was delayed for two months but that will take effect on March 1 with $85 billion in scheduled spending cuts in defense and domestic programs. 

"As for spending, Business Roundtable favors a more thoughtful allocation of spending cuts rather than sequestration’s across-the-board, automatic spending reductions," Engler said. 

"This is achieved by the House and Senate passing budgets and working out the details in conference."

Senate and House budget leaders have said they plan to put forth budgets this year. A debt-ceiling bill that delays the $16.4 trillion limit until May, also includes a provision that would cut off lawmakers pay if they don't follow through with their promises to move budgets through their respective chambers. 

Engler also argued that the nation's struggling economy does not need additional tax increases "that will further worsen our already uncompetitive tax system."

President Obama on Tuesday called on Congress to approve legislation to replace at least some of the automatic spending cuts set to hit in less than a month.

Obama urged lawmakers called for a "balanced mix of spending cuts and more tax reform."

The president didn't offer a specific plan to replace the sequester, but urged Congress to pass a smaller package of spending cuts and tax changes to delay sequestration.

"Any significant tax changes should be made only within the context of comprehensive tax reform that will put the nation on a path to more robust growth," Engler said.

The National Retail Federation expressed concern about eliminating some corporate tax provisions to "fund short-term spending needs."

"NRF supports the type of corporate tax reform many Democrat and Republican policymakers have been advocating, which would eliminate corporate tax benefits in exchange for substantially reducing tax rates for all businesses," said NRF President and CEO Matthew Shay.

"Piecemeal efforts to eliminate corporate tax benefits outside the context of corporate tax reform would make it very difficult to achieve the type of changes required to provide much-needed growth in the U.S. economy," Shay said. 

He said comprehensive reform would allow retailers to expand their businesses and create more jobs.

The Chamber had a similar take on Tuesday's announcement by the White House arguing that comprehensive tax and entitlement reform will invigorate the economy. 

"The Chamber has long stated that the sequester should be replaced with prioritized spending cuts," said Bruce Josten, the Chamber's executive vice president for government affairs.

"The latest proposals are simply gimmicks that fail to address our country’s spending and deficit problems," he said. 

"Imposing punitive and targeted tax hikes on the energy sector, as well as successful small businesses, is not the answer."

The Congressional Budget Office has estimated that allowing the sequestration cuts to go forward would lead to a 0.7 percent decline in economic growth this year. The Bipartisan Policy Center estimates the nation would face 1 million job losses in 2013 and 2014.