Leaders of American companies are willing to take more risk on corporate tax reform than members of Congress, the former president of the Business Roundtable advocacy group told CNBC on Tuesday.

"The CEOs, I think, privately are saying look, 'We'll take in the short term some outcomes that are disadvantageous to our company or our sector, but at the end of that process has to be long-term improved economic growth for the nation.' That's the payoff," said John Engler, a Republican who had served three terms as governor of Michigan.

President Donald Trump's economic advisory council, led by Blackstone chief Steve Schwarzman, is back at the White House on Tuesday, with Wal-Mart CEO Doug McMillon, General Motors CEO Mary Barra, IBM CEO Ginni Rometty, and former General Electric CEO Jack Welch all expected to attend.

While corporate titans are basically unanimous in their call for cutting rates, the particulars on how to achieve that goal and pay for it are creating some divisions, particularly around the border adjustment import tax revenue provision in the overall House Republican plan to cut the federal corporate tax rate from 35 percent to 20 percent.

Retailers, which generally hate the border tax idea because they rely on imports, are warning about having to pass on their higher costs of bringing good into the country onto consumers.

But Engler argued on "Squawk Box" there may be wiggle room. "CEOs and business leaders, frankly, are more willing to take risks than some of the members of Congress who worry that if the short-term consequences aren't immediately visible that's an electoral problem for them."

An observer from Wall Street told "Squawk Box" in an earlier interview the stock market is expecting "some level of tax reform."

"[But] the market has realistic expectations," said Cliff Robbins, founder of Greenwich, Connecticut–based Blue Harbour Group. The hedge fund manages about $3.4 billion in assets. "I don't think the market is pricing in a huge 15 to 20 percent [corporate] rate," he added.

Robbins, who made his bones as a dealmaker in the 1980s at Kohlberg Kravis Roberts and Morgan Stanley, now views himself as a "friendly" activist investor.