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

6 hours ago in Entertainment

‘Oregon Trail,’ ‘Sonic’ join World Video Game Hall of Fame

videogamehall2016AP

Last year, "Super Mario Bros." and "Pong" were among the first inductees to the World Video Game Hall of Fame. The class of 2016 is just as strong.

10 hours ago in Entertainment

Seth MacFarlane returning to Fox with new sci-fi series

sethmacfarlane536713938826

The "Family Guy" star is producing a new series set 300 years in the future.

13 hours ago in Music

‘You can’t always get what you want,’ Stones tell Trump

rollingstonesREUTERS

The Rolling Stones told Republican presidential hopeful Donald Trump on Wednesday to stop using the band's music for his campaign after artists such as Adele and R.E.M. made the same request.

13 hours ago in Sports

Furyk to make PGA Tour return next week in Charlotte

10-overlay-2

Jim Furyk makes his season debut as he joins an elite field boasting 31 of the top 50 players in the current FedExCup standings.

13 hours ago in Entertainment

Channing Tatum bringing ‘Magic Mike’ to Sin City

20-overlay-3

The actor, who starred and produced in both the 2012 film and its 2015 sequel "Magic Mike XXL" made the announcement in a Facebook Live video on Wednesday, revealing "Magic Mike Live" will be coming to the Hard Rock Hotel and Casino in March, 2017.