A Balanced Approach to Deficit Reform

Yesterday, the Wall Street Journal published an article highlighting that 80 prominent U.S. CEOs recently announced their suggestions for responsible deficit reduction. These CEOs are calling on Congress to embrace both spending cuts and revenue increases. The CEOs predict that neither party would be able to avoid raising taxes in the coming years.

The statement endorses neither candidate, and it does not put forward a specific tax and spending reform plan. But it does recommend eliminating or reducing tax loopholes and expanding the tax base. Some liberal tax reform organizations are skeptical of the CEOs’ statement. These organizations claim that these individuals’ and their companies’ dependence on tax loopholes and reduced rates secured during the Bush Era.

Although the CEOs’ statement can be criticized for its lack of detail, I think it is a valuable contribution to the current political debate. There is a need for frank debate and the realization that deficit reduction requires revenue increases in addition to spending cuts. Of course, Krugman would disagree with these CEOs for promoting austerity at a time that he believes demands significant deficit spending; however, I am optimistic that these business leaders are at least adopting a realistic perspective on what deficit reduction actually requires of all of us.

http://online.wsj.com/article/SB10001424052970203937004578076253372633058.html