News

Obama to propose ‘grand bargain’ on taxes, infrastructure

Obama to propose ‘grand bargain’ on taxes, infrastructure

President Barack Obama will propose a "grand bargain for middle-class jobs." Photo: Associated Press

WASHINGTON (Reuters) – President Barack Obama will propose a “grand bargain for middle-class jobs” on Tuesday that would cut the U.S. corporate tax rate and use billions in revenues generated by a business tax overhaul to fund projects aimed at creating jobs.

His goal, to be outlined in a speech at an Amazon.com Inc facility in Chattanooga, Tennessee, is to break through congressional gridlock by trying to find a formula that satisfies both Republicans and Democrats.

Efforts to reach a bipartisan “grand bargain” on deficit reduction have been at an impasse for months. Senior administration officials say Obama is not giving up on a big deficit-cutting package, but given that no agreement appears on the horizon so far, he is offering a new idea to try to follow through on his 2012 re-election campaign promises to help the middle class.

“As part of his efforts to focus Washington on the middle class, today in Tennessee the president will call on Washington to work on a grand bargain focused on middle-class jobs by pairing reform of the business tax code with a significant investment in middle-class jobs,” Obama senior adviser Dan Pfeiffer said.

Obama wants to cut the corporate tax rate of 35 percent down to 28 percent and give manufacturers a preferred rate of 25 percent. He also wants a minimum tax on foreign earnings as a tool against corporate tax evasion and increased use of tax havens.

The new twist is that in exchange for his support for a corporate tax reduction, he wants money generated by the tax overhaul to be used on a mix of proposals such as funding infrastructure projects like repairing roads and bridges, improving education at community colleges, and promoting manufacturing, senior administration officials said.

Obama’s proposal would generate a one-time source of revenue, for example, by reforming depreciation or putting a fee on accumulated foreign earnings.

Officials gave no specific figure on how much money would be raised. But Obama in his State of the Union speech in February called for $50 billion for infrastructure spending.

The White House is hopeful that the idea will gain some traction in the U.S. Congress because Republicans want corporate tax reform and Democrats want spending for infrastructure. This offers something for both sides, administration officials said.

Officials said they recognize, however, that the climate is difficult in Congress with Republicans adamantly refusing anything that is seen as increasing spending and Democrats in no mood to cut taxes and get nothing for it.

Obama’s speech in Chattanooga is the latest in a series of speeches aimed at making good on his promises to boost the U.S. economy in ways that helps the middle class. And he is looking to breathe new life into his second term, which has so far found successes to be fleeting.

Recent Headlines

in Entertainment

Easy April Fools’ Day pranks

aprilfools

Looking for a quick and easy way to pull a fast one? Check out these perfect pranks for kids, coworkers, and friends.

in Music

Gene Simmons gets into movie business

genesimmons

The KISS rocker and WWE Studios will join together to try to scare the bejeezus out of you.

in Entertainment

Robin Williams’ image cannot be used for 25 years

Actor and comedian Robin Williams poses during a press tour promoting his new movie "License To Wed" in Santa Monica, Calif., Friday, June 15, 2007.

The "Mrs. Doubtfire" star will not appear in any form of publicity until 2039.

in Music

Music festivals ban ‘selfie sticks’

selfie

You'll just have to have long arms if you're taking a selfie at Coachella or Lollapalooza.