WASHINGTON — President Barack Obama is extending a new proposal to Republicans that he hopes will break the political gridlock on budget negotiations, offering to cut corporate tax rates in exchange for job investments.
White House officials say just because they’re at an impasse with congressional Republicans over a grand bargain on reducing the deficit doesn’t mean they shouldn’t look for other areas of agreement. So Obama plans to use a trip to an Amazon.com distribution center in Chattanooga, Tenn., on Tuesday to propose a “grand bargain for middle-class jobs.”
Obama long has called for a cut in corporate tax rates, but previously insisted such business tax reform be coupled with an individual tax overhaul. He’s dropping that demand and says instead that he’s open to the corporate tax cut that that businesses crave. But he wants it to be coupled with a significant investment on some sort of job creation program, such as manufacturing, infrastructure or community colleges.
House Speaker John Boehner’s office said Obama’s proposals were hardly a compromise.
“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,” Boehner spokesman Michael Steel said.
Congressional Republicans have 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.
Senior administration officials described the corporate tax proposal as the first new economic idea Obama plans to offer in the coming months, with budget deadlines looming in the fall. Administration officials wouldn’t put a price tag on the proposal or say how much would be a “significant” investment in jobs since the dollar figures would be part of negotiations with Congress. But in an example from this year’s State of the Union address, Obama proposed $50 billion to put Americans to work repairing roads and bridges and other construction jobs.