Obama in Tennessee to propose 'grand bargain' for jobs

Tuesday, July 30, 2013 at 1:25pm

President Barack Obama, seeking to break Washington's fiscal stalemate, is proposing cutting corporate tax rates in exchange for more spending on jobs programs. But his offer was immediately panned by congressional Republicans, casting doubts about its prospects.

The White House painted the new offer as a way for Washington to create jobs and generate short-term economic growth even as hopes for a grand deficit reduction deal fade. Obama was to announce his proposals Tuesday during a trip to an Amazon.com distribution center in Chattanooga, Tenn.

"We should be looking for other avenues of progress, other 'grand bargains' that can be for middle class job growth," White House economist Gene Sperling said.

The president has previously insisted such business tax reform be coupled with an individual tax overhaul. His new offer drops that demand and calls only for lowering the corporate rate from 35 percent to 28 percent, with an even lower effective tax rate of 25 percent for manufacturers.

Obama wants those rate changes to come in exchange for significant spending on some sort of job creation program, such as manufacturing, infrastructure or community colleges.

Congressional Republicans have also 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.

"You can't do that," said Sen. Johnny Isakson (R-Ga.) of splitting corporate tax reform from individual rates. "That'll never fly."

"We've heard that song before," Sen. John McCain (R-Ariz.) said. "Everything should be negotiated, but certainly I'm not in support of it."

The disagreement was even deeper from House Republican leadership, with Speaker John Boehner's office accusing the White House of blindsiding lawmakers with the proposal. The White House said later that senior officials had tried to brief Boehner's staff about the offer on Tuesday, but their phone calls were not returned until the next morning, after the proposal was detailed in media reports.

Signaling that the White House may not be in the mood to compromise further, Obama communications director Jennifer Palmieri said the new "bargain" the president is proposing, "isn't supposed to be for the Republicans. It's supposed to be a bargain for the middle class."

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.

The officials said money to pay for the jobs creation would come from a one-time revenue boost from measures such as changing depreciation rules or having a one-time fee on earnings held overseas.

Obama planned to make his remarks from an Amazon fulfillment center in Chattanooga, one of more than a dozen warehouses operated by the world's largest online retailer, which announced Monday that it would increase hiring. The company said it would add 7,000 new jobs, including 5,000 more at U.S. distribution centers that currently employ about 20,000 workers who pack and ship customer orders. Amazon.com Inc. has been spending heavily on order fulfillment to help its business grow.

Obama planned to tour the packing floor of the Chattanooga warehouse, which opened in September 2011. It is one of the company's largest and newest facilities, with more than 1 million square feet — the size of more than 28 football fields full of merchandise.

The plant was the source of tax controversy when it opened; Amazon originally was granted an indefinite waiver on collecting sales tax in a deal to bring two distribution centers to Tennessee. The state's retailers were outraged that they were put at a competitive disadvantage, and Amazon has agreed to start collecting Tennessee sales tax next year.

The White House said Obama wasn't visiting Amazon because of the company's position on taxes, but because it's an example of a successful American business growing and creating more jobs.

The U.S. has one of the highest corporate tax rates in the world, but many businesses avoid the full cost by taking advantage of deductions, credits and exemptions that Obama wants to eliminate.

Obama wants to do away with corporate tax benefits like oil and natural gas industry subsidies, special breaks for the purchase of private jets and certain corporate tax shelters. He also wants to impose a minimum tax on foreign earnings, a move opposed by multinational corporations and perhaps the most contentious provision in the president's plan.

When Obama unveiled the corporate tax plan last year, congressional Republicans called for even deeper cuts for the business world. His campaign rival, Mitt Romney, wanted a 25 percent corporate tax rate.

24 Comments on this post:

By: Libertine on 7/30/13 at 12:10

Cutting Corporate income tax rates to a flat 25% rate is a stand alone job creation program. Deducting the cost of a company plane isn't a special loophole, tax reductions for putting up expensive solar photovoltaic panels is.

It is interesting that Obama visited Amazon, it is really no different that visiting Wal-Mart.

Obama proved that there is no such thing as shovel ready jobs with his first failed stimulus.

By: Blanketnazi2 on 7/30/13 at 1:21

Amazon is no different from Walmart? Seriously?

By: Libertine on 7/30/13 at 2:43

Yep, Amazon is the evolution of Wal-Mart.

By: shinestx on 7/31/13 at 7:32

He sounds as if he hasn't been president for the past five years. And the first half of that time he had Democrats in both chambers of Congress. He could have everything he wants... and he got it! Obamacare... stimulus... stimulus... billions to failed companies that supported his campaigns... higher taxes... oh, and the third stimulus. Not to mention all the scandals from the Benghazi disaster and coverup; the IRS corruption and stonewalling; the NSA spying on innocent Americans; and Kathleen Sebelius' crony deals. And all the rest of America got for it was anemic growth (.7% GDP growth!), which even they call a "Jobless recovery"! Excuse me! How can a recovery be called a recovery when it doesn't result in job growth? All one needs to do to see how to create the environment for an economic recovery is look at the deeper recession of 1980-82 and the growth in the third through fifth years (comparable time frame) was unbelievable, ranging from 3% to nearly 5% per year!! All because Reagan reined in big government. Well, now we have the opposite under Obama and the Democrats... and they want to spend even more next year.

Speech... speech... speech... all opium for the emotional dupes who haven't yet figured this guy out. This country has never been this divided in over 100 years, and this president has fanned the flames for over four years. It's Obama's fault!

By: Rocket99 on 7/31/13 at 8:08

I do find it very interesting that the Obstructionist Party (Republicans/Tea Party) will be for something and even come up with a decent plan on something until the President puts his support behind it and then they do a complete flip flop and adamately oppose the idea. Universal health care is just one example. Romney was not only for it when he was governor, he worked HARD to get it passed. Now, Obama pushes pretty much the exact same plan for the entire nation and Romney and friends come out in strong opposition.

If the Republicans/Tea Party weren't on such a mission to destroy our President, our country as a whole would be in much better shape now. They have blocked EVERY attempt he has made to do anything to help the country and the economy. The way I see it, the reason the recovery has been so slow is primarily because of one political party which claims to be for the people but in reality is only for big corporations.

By: pswindle on 7/31/13 at 11:44

How interesting that not one of our elected officials showed up except Cooper and Cowan. I wish that Gov. Bredesen had been there since he was the on that brought Amazon to TN. Wimpy Haslam had planned nothing to do in East TN to look busy, yesterday. Corker had business in Washington, yea and Larmar was kissing up on Rand Paul. These losers are not interested in TN or the country.

By: Blanketnazi2 on 7/31/13 at 11:54

You got that right, pswindle. When they didn't show up they may as well have given the finger to the working people in TN.

By: Blanketnazi2 on 7/31/13 at 11:54

: Libertine on 7/30/13 at 3:43
Yep, Amazon is the evolution of Wal-Mart.

And how did you come to that conclusion?

By: Blanketnazi2 on 7/31/13 at 11:55

http://www.indeed.com/cmp/Amazon-Fulfillment/reviews

They pay their employees better and treat them with respect. They also keep jobs here in the U.S.

By: budlight on 7/31/13 at 1:18

By: Libertine on 7/30/13 at 1:10
Cutting Corporate income tax rates to a flat 25% rate is a stand alone job creation program. Deducting the cost of a company plane isn't a special loophole, tax reductions for putting up expensive solar photovoltaic panels is.

It is interesting that Obama visited Amazon, it is really no different that visiting Wal-Mart.

Obama proved that there is no such thing as shovel ready jobs with his first failed stimulus

Libertine, Obama said the same thing during the first stimulus about the falling down bridges. Remember a bridge had just fallen. Now, if he got those highways and bridges fixed and built which were shovel ready then, WHY DO WE HAVE SO MANY OF THEM STILL LACKING IN STRUCTURAL INTEGRITY?

Well, we really don't. He's just lying some more. If the bridges are bad as he says and the highways need so much work, why is he giving all our money to foreigners and to welfare programs such as free cell phones? Why not divert the money to help the greater good. CAUSE if he doesn't, those bridges will start falling down and hurting people. And the highway potholes are ruining our cars.

By: Libertine on 7/31/13 at 1:32

"By: Blanketnazi2 on 7/31/13 at 12:55

http://www.indeed.com/cmp/Amazon-Fulfillment/reviews

They pay their employees better and treat them with respect. They also keep jobs here in the U.S."

How does Amazon keep jobs in the US?

http://www.fastcodesign.com/1672939/think-your-office-is-soulless-check-out-this-amazon-fulfillment-center#1

By: Libertine on 7/31/13 at 1:35

"The officials said money to pay for the jobs creation would come from a one-time revenue boost from measures such as changing depreciation rules or having a one-time fee on earnings held overseas."

Revenue boost = tax increase.

Obama claims it is a tax cut, but it boosts income?

By: govskeptic on 7/31/13 at 1:49

Libertine:

You are exactly right in the statements above. One remarks from the President is
"We will close some loop holes and that will result in more middle class jobs".
How in capital H does the government taking in more revenue from taxes create any jobs other than growing government with more taxpayer funded jobs. What a
silly statement for him to make, but I'm sure that will go into the economic theory of
many of those attending and journalist.

By: Blanketnazi2 on 7/31/13 at 2:19

bud, the Jobs Bill that was to fund infrastructure was blocked by the GOP. That's why they have not been fixed!

Libertine, Indeed shows posts of various people who work or have worked there. I would be more likely to give that credibility over the article you posted.

By: Blanketnazi2 on 7/31/13 at 2:21

Senate blocks $60 billion infrastructure plan, another part of Obama jobs bill

http://articles.washingtonpost.com/2011-11-03/politics/35283107_1_senate-blocks-kinds-of-common-sense-proposals-jobs-bill

For goodness sake, bud - how uninformed are you?!

By: Blanketnazi2 on 7/31/13 at 2:25

bud, you realize that Congress holds the purse strings, right???? He isn't "giving" money to foreigners and welfare! Geez......

By: Libertine on 7/31/13 at 3:25

By: Blanketnazi2 on 7/31/13 at 3:21

Senate blocks $60 billion infrastructure plan, another part of Obama jobs bill

http://articles.washingtonpost.com/2011-11-03/politics/35283107_1_senate-blocks-kinds-of-common-sense-proposals-jobs-bill

For goodness sake, bud - how uninformed are you?!"

Do you think the income tax increase included in the bill was a poison pill dooming it from the start?

By: shinestx on 7/31/13 at 4:09

Nazi, no doubt you noticed that Prizzy BOzo went to Capitol hill today; and how many Republicans did he meet with? Oh.... that's right... ZERO! Only Demwits... and they're increasingly nervous about the disaster (aka "Train wreck") that is Obamacare. BOzo is the most partisan president since LBJ.

By: bfra on 7/31/13 at 4:14

Obama went to Chattanooga today!

By: ancienthighway on 7/31/13 at 5:36

bfra, Chattanooga was Tuesday (7/30) afternoon.

shinestx, are you suggesting that the Democrats should have invited Republicans to the Democratic Caucus in both the House and Senate? And when do Republicans invite Democrats to their Caucuses? It seems you are also suggesting that the POTUS should be bi-partisan, but House and Senate Republicans should continue to stonewall any efforts made towards a bi-partisan government, as they have since Bush left office..

By: Libertine on 8/1/13 at 4:26

By: Blanketnazi2 on 7/31/13 at 3:19

"Libertine, Indeed shows posts of various people who work or have worked there. I would be more likely to give that credibility over the article you posted."

I went to the site. Basically after reading about a dozen the summary was, $11/hour, decent benefits, no chance for advancement, but I sure am to glad to have any job in this economy.

The link I provided came from the City Paper "What we're reading" column.

I expected the Democratic Party line to be the same as it is with Wal-Mart. It is a evil corporation destroying communities and all the mom and pop stores out there.

By: pswindle on 8/1/13 at 10:56

Did anyone else read Lamar's statement abut the President coming to TN? Lamar said, "I hope he does not come o TN and mess up our free to work state." What he really meant is I hope the unions do not come back because the workers might get good wages and benefits. Lamar has been a government employee for so long that he forgets that others do not have his salary and benefits. TN is in good shape because of Gov. Bredesen. We are surely going down hill fast with this wimpy governor. He just takes care of his family and buddies.

By: yucchhii on 8/1/13 at 12:59

Did someone just take a dump? I smell so much shit here! Oh, it's osama,...I mean obama. "ALL politicians have that smell because they are ALL so full of it, it comes out their ears"!! BRING OUR JOBS BACK FROM japan, china, Indonesia....(ASIA) Either that or our ECONOMY "WILL NOT RECOVER". The politicians KNOW this already and they do it INTENTIONALLY!! There is not one word to be truthful out of ANY politician!! Yeah so, the japs have mfg nissan plants HERE in the USA...yeah so? Buy a NEW japanese car and where does that $$$ go?.......BACK TO JAP LAND!! It doesn't come back here...back into circulation. There is NO WAY our economy will recover without OUR jobs coming back HERE and to have "AMERICANS" working and NOT the MEXICANS. You tell me when you see the economy gets back to normal with out our jobs coming back HERE! Guess I won't hear from anyone, ay?

By: Specter47 on 8/1/13 at 5:04

Since Obama fouled the air in our beautiful state, I say that he should have the EPA investigate the vicinity that he fouled and apply the proper penalties. An incredible douche bag if ever one lived.