President Obama in Tennessee on Tuesday will call for a lowering of the corporate tax rate in exchange for heightened government investments in infrastructure, manufacturing and education, a new effort to entice Republicans wary of virtually all of his prescriptions to improve the economy.
Making the latest stop in his newest jobs tour, Obama at an Amazon.com distribution center in Chattanooga will outline what the White House is framing as a “grand bargain for middle-class jobs.”
Obama wants to cut the corporate tax rate of 35 percent to 28 percent and give manufacturers an even lower rate of 25 percent — a proposal the president floated last year. Rather than link the corporate tax cuts with an overhaul of the individual rate, as he did previously, Obama will instead press for more federal spending on his jobs blueprint. The president will also call for a minimum tax on foreign earnings.
“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.
Republicans were quick to dismiss the idea as nothing new.
“Republicans want to help families and small businesses, too," said Michael Steel, a spokesman for House Speaker John Boehner. "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.”
GOP leaders have been eager to reform the corporate tax code but have been dismissive of what they view as the president's big-government solutions to boost job creation. Obama has repeatedly called for $50 billion in spending to repair aging roads, bridges, airports and other transportation projects as a way of creating jobs.
The White House says the new government spending would be paid for by a one-time transition fee on foreign earnings now kept overseas, but it remains unclear how much money that proposal would generate. Republicans would prefer that such revenue be used to bring down the deficit rather than spur more government spending on jobs.
Obama last week gave economic speeches in Illinois, Missouri and Florida and each of them was derided by the GOP as stale ideas for jump-starting the economy. The speech Tuesday in Tennessee represents the first deviation by the White House from previous economic fixes that fell on deaf ears on Capitol Hill.
Obama is using the Amazon facility as the backdrop for his announcement a day after the company trumpeted more than 5,000 new jobs at distribution centers nationwide.
As for a broader “grand bargain” on taxes and entitlement spending, the White House and congressional Republicans appear no closer to the compromise that has long eluded them. Obama is making a rare trip to Capitol Hill on Wednesday to preview for both House and Senate Democrats his strategy for the fall’s fiscal battles.