Politics
U.S. Economy: Obama proposes ‘Grand Bargain’ for jobs
U.S. President Barack Obama. PHOTO/File
President Barack Obama, seeking to break Washington’s fiscal stalemate, is proposing cutting corporate tax rates in exchange for more spending on jobs programs. However, his offer was immediately panned by congressional Republicans, casting doubts about its prospects.
The White House painted the new offer as a way for Washington to create jobs and generate short-term economic growth even as hopes for a grand deficit reduction deal fade. Obama was to announce his proposals Tuesday during a trip to an Amazon.com distribution center in Chattanooga, Tennessee.
“We should be looking for other avenues of progress, other `grand bargains’ that can be for middle class job growth,” White House economist Gene Sperling said.
Obama has previously insisted such business tax reform be coupled with an individual tax overhaul. His new offer drops that demand and calls only for lowering the corporate rate from 35 percent to 28 percent, with an even lower effective tax rate of 25 percent for manufacturers.
Obama wants those rate changes to come in exchange for significant spending on some sort of job creation program, such as manufacturing, infrastructure or community colleges.
Congressional Republicans have also long insisted on tying corporate and individual tax reform so that small business owners who use the individual tax code would be offered cuts along with large corporations.
The disagreement was even deeper from House Republican leadership, with Speaker John Boehner’s office accusing the White House of blindsiding lawmakers with the proposal. The White House said later that senior officials had tried to brief Boehner’s staff about the offer on Tuesday, but their phone calls were not returned until the next morning, after the proposal was detailed in media reports.
