President Barack Obama will propose a new grand bargain to Republicans on Tuesday, which he hopes will break up the gridlock on Capitol Hill and get his domestic economic agenda moving again. His plan: overhaul the corporate tax code in exchange for new revenue to fund job creation projects.
Obama is expected to lay out this plan in a speech Tuesday at an Amazon Inc., facility in Chattanooga, Tenn. He has embarked on a new campaign to refocus attention on the economy and job creation.
“The bottom line is that the President will work with Republicans on a package to simplify our business tax code so long as it includes real investments to help restore middle class security, create jobs and grow the economy,” the White House stated in a fact sheet.
Under this new proposal, some businesses will pay less while other corporations pay more. “But everyone would pay their fair share,” the White House said.
The two sides have been trying to reach a grand fiscal bargain now for quite some time. And it’s looking like this new plan is already a no-go for Republicans, whose idea of a grand bargain includes a more all-encompassing plan for individuals and small business.
“The President has always supported corporate tax reform,” said Michael Steel, a spokesman for House Speaker John Boehner, R-Ohio, in a statement. “Republicans want to help families and small businesses, too. This proposal allows President Obama to support President Obama’s position on taxes and President Obama’s position on spending, while leaving small businesses and American families behind.”
Obama wants to reduce the corporate tax rate of 35 percent to 28 percent. Manufacturers would also enjoy a rate of no more than 25 percent -- all this in exchange for a windfall that would fund infrastructure and job training.
But a senior House GOP leadership aide said cutting the corporate rate to 28 percent or 25 percent and leaving the top individual rate at 39.6 percent would affect small businesses.
“We have always been opposed to corporate-only tax reform,” the aide said. “The White House knows that is our position. Dealing with corporate taxes separately is the opposite of a concession to us. … After offering us two things he knows we oppose, the president is asking for additional stimulus spending which, as you know, we also oppose.”
The aide also said the president doesn’t appear serious about breaking the impasse since Republicans have found out about the offer via the press.
A newspaper in Tennessee, where the president is making his new proposal, is also skeptical.
“Forgive us if you are not greeted with the same level of Southern hospitality that our area usually bestows on its distinguished guests,” the Chattanooga Times Free Press wrote in an editorial, telling him to “shove” his jobs plan. “We’d prefer you keep it to yourself. That’s because your jobs creation plans so far have included a ridiculous government spending spree and punitive tax increase on job creators that were passed, as well as a minimum wage increase that, thankfully, was not.”
Laura is a U.S. politics reporter for the International Business Times. She was always fascinated by the BBC World News each morning on the radio in Jamaica. That, and a love...