Business leaders tell Congress to "go big" on deficit cuts

WASHINGTON (Reuters) - Business leaders and former U.S. government officials on Monday urged a congressional committee tasked with slashing America's debt to "go big" and consider major reforms of government assistance programs as well as the tax code.

In a letter to the "super committee," nearly 60 executives and former Treasury officials spanning several administrations said they wanted to see large-scale cuts to stabilize the U.S. debt as a share of the economy.

"We urge you to 'go big,'" they wrote in a letter organized by the Committee for a Responsible Federal Budget at the New America Foundation, a bipartisan research group.

"We believe that a go-big approach that goes well beyond the $1.5 trillion deficit reduction goal" should include "major reforms of entitlement programs and the tax code," they wrote.

The congressional "super committee" of six Republican and six Democratic lawmakers was formed as part of an August deal to raise the U.S. debt ceiling.

It met for the first time last week and must report by late November on ideas to save at least $1.2 trillion from federal budgets over 10 years. President Barack Obama will present his recommendations to the super committee next Monday.

The Democratic president initially said the panel's target should be closer to $1.5 trillion, and said on Thursday they would also need to cover his $447 billion jobs package with long-term cuts, bringing the total to $2 trillion or more.

Obama hopes that by identifying ways to trim budgets in the future, he will be able to boost short-term growth enough to bring down the 9.1 percent unemployment rate that is casting a shadow over his re-election prospects next year.

Republicans concerned about large and growing U.S. debt levels refused to raise the U.S. debt ceiling unless Obama agreed to cut spending. Their bitter dispute brought the United States to the edge of default and prompted a Standard & Poor's ratings downgrade.

The Committee for a Responsible Federal Budget, whose members include former Treasury Secretary Paul O'Neill, former Federal Reserve Chairman Paul Volcker and former Congressional Budget Office director Alice Rivlin, said last week that $1.5 trillion was not enough to put the U.S. budget on a sustainable path.

(Corrects name of New America Foundation committee in paragraph 3)