Republicans Brush Off Obama's Corporate Tax Reform Proposal: What's In It For Us?

WASHINGTON -- Republican leaders are scoffing at a proposal that President Barack Obama unveiled Tuesday tying corporate tax reform to new investments in job creation. Their opposition boils down to one looming question: What's in it for us?

In Chattanooga, Tenn. Obama outlined his so-called "grand bargain for middle-class jobs," which the White House is framing as something that Congress can pass amid stalled efforts at broader deficit reduction. His proposal would pair a cut in corporate tax rates with new investments in manufacturing, infrastructure and community colleges. White House officials say the money for the new investments would come from a one-time revenue boost generated by changing depreciation rules or a fee on earnings held overseas.

"If folks in Washington really want a grand bargain, how about a grand bargain on middle class jobs?" Obama asked to cheers.

Top Republicans say the proposal isn't a bargain of any kind, wondering aloud what concessions the president is offering for their buy-in. One House GOP leadership aide, speaking on background, summed up Obama's plan as a series of proposals that are just the opposite of concessions for Republicans: corporate tax reform without individual tax reform, corporate tax reform that isn't revenue neutral, and additional stimulus spending.

Obama's offer is "a further-left version of a widely panned plan he already proposed two years ago," Senate Minority Leader Mitch McConnell (R-Ky.) said on the Senate floor. He was referring to a past deficit reduction proposal, negotiated in 2011 by Obama and House Speaker John Boehner (R-Ohio), that included individual tax reform and entitlement reforms, a major concession for Democrats.

Boehner spokesman Michael Steel reiterated that Republicans won't support a corporate tax reform plan unless it's paired with individual tax reform.

"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," Steel said.

White House officials said the point of Obama's plan isn't to win over Republicans, per se, but to strengthen the economy.

"The bargain isn't supposed to be for the Republicans. It's supposed to be for the middle class," White House Communications Director Jen Palmieri said during a conference call with reporters. "It would be unfortunate if House Republican leadership was closing a door on a proposal that's going to help businesses and save middle class jobs from the start."

Palmieri also dismissed the idea that Republicans were kept in the dark about the plan, despite McConnell and GOP aides complaining that they first learned about it from news reports. Without naming names, she said White House officials reached out to a bipartisan group of House and Senate lawmakers on Monday night to discuss it.

Gene Sperling, who leads Obama's National Economic Council, said on the call that he has personally talked to "prominent Republican members of Congress" who support reforming the corporate tax code as a standalone issue. He didn't name names.

"It's not clear to me why this would not be the type of grand bargain on jobs that the Republicans would not consider to be a good bargain for the middle class," Sperling said. "It's something they should be willing to work with us on."

Sperling conceded that neither corporate tax reform nor stimulus spending could pass Congress on their own right now. But by pairing them up, he said, it becomes a package that many people believe is critical for the economy right now.

"What the president is saying is, it shouldn't be just in large deficit reductions that we think of what type of grand bargains there are," Sperling said. The proposal can "help us make progress in high wages and job creation for middle class families."

Obama's plan may not have much traction among GOP leaders, but that doesn't mean he won't keep pushing for it. He unveiled the proposal as part of a series of speeches he'll be giving throughout August -- while Congress is on a month-long recess -- about the need to focus on the economy and jobs.

This story has been updated to add quotes from Obama's speech.



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