As Congress dithers on resolving the fiscal cliff and long-term debt, 87 CEOs of major companies publicly urged lawmakers to compromise — and fast.
Their prescription: a debt-reduction plan that raises tax revenue and cuts spending.
They believe any plan should be bipartisan and implemented gradually so it does not threaten the economic recovery. It also has to protect the vulnerable.
The CEOs have lent their backing to a set of principles put forth by the Campaign to Fix the Debt, a nonpartisan group founded by Erskine Bowles and Alan Simpson, who chaired President Obama’s debt reduction commission.
The executives include some of the most prominent names from Wall Street, Silicon Valley and many bedrock U.S. companies, including Jeff Immelt of General Electric in Fairfield.
In general, they back the plan proposed by Bowles and Simpson as a framework to start negotiations. That plan would reduce debt by $4 trillion over a decade by cutting defense and discretionary spending, curbing federal entitlement costs and reforming the tax code.
The CEOs are pushing for tax reform that lowers tax rates and reduces the value of tax breaks. That is similar to the tax reform proposed by Mitt Romney. But it differs in a key way: it would raise revenue to reduce the deficit whereas Romney’s plan would be “revenue neutral” and deficit reduction would come solely from spending cuts.
President Obama has proposed changes to Medicare, would raise tax revenue from high-income families, and his 2013 budget proposal would temporarily stop the debt from growing faster than the economy. But he has yet to put forward a comprehensive debt-reduction plan.
Congress won’t return to work until after the Nov. 6 election and will be taking a week off for Thanksgiving. Effectively, that means lawmakers have left themselves less than five working weeks to figure out what to do about the $7 trillion worth of tax increases and spending cuts that start taking effect in January.
