| WASHINGTON, July 29
WASHINGTON, July 29 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
"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
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
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.