President to propose ‘grand bargain’ on jobs
WASHINGTON (CNN) — President Barack Obama will offer a new proposal Tuesday that would cut corporate taxes while investing in programs that could put more Americans in well paying, full-time jobs, White House officials said.
The so-called “grand bargain” is being made in an attempt to break partisan gridlock currently plaguing attempts to pass deficit-reducing budget plans, though congressional Republicans signaled on Tuesday they were unlikely to back the plan, which the president will formally announce at an Amazon.com distribution center in Tennessee.
“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,” said Dan Pfeiffer, a senior adviser to the president.
Obama will suggest Congress cut corporate tax rates – long a goal of Republicans – while simultaneously making jobs investments, which Democrats and the president have been championing.
In the past, Obama and Republicans have insisted that corporate tax reform be passed alongside reform for individual earners. Republicans argue that many small business owners file taxes as individuals, and would only benefit from an overhaul of the entire tax code.
Last year, the Obama administration proposed slashing the corporate tax rate to 28% from 35% and paying for the reduction by eliminating “dozens” of business tax breaks.
On Tuesday, Obama will explain that he’s open to changing only the corporate tax code, as long as it’s combined with major investments in programs that creates high-paying middle class jobs, such as bolstering the country’s manufacturing infrastructure or network of community colleges.
The White House would not say Tuesday what the individual price tags of each side of the bargain – the tax changes and the investment – would amount to.
Early reaction from Republicans to the outlines of Obama’s plan was not receptive. A spokesman for House Speaker John Boehner cast the proposal as old news.
“The President has always supported corporate tax reform,” Michael Steel wrote in a statement. “Republicans want to help families and small businesses, too. 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.”
A House Republican leadership aide said the White House was taking their own plan and making it less amenable to Republicans than previous offers, while “trying to extract a ransom of infrastructure spending” at the same time.
The aide argued the new White House plan was an attempt to “get a headline that says they’re offering a grand bargain.”
Obama’s address in Chattanooga is the latest in a series of speeches the president will deliver on the economy and jobs, part of an attempt to turn back to the issue that rates as most important among Americans. The tour began last week in Illinois, Missouri and Florida.
Tuesday’s announcement of a “grand bargain” will be the first specific proposal the president makes in his new push to focus on the economy, though White House officials say there will be more as the initiative continues.
Amazon.com, whose facility Obama will speak at Tuesday, announced this week plans to hire 7,000 workers for its U.S. operation, with most jobs offering pay and benefits far above typical retail wages, the company said.
Amazon did not give specific pay scales for the positions, but said the 5,000 warehouse jobs will pay 30% more than jobs in traditional retail stores.
The jobs are full-time permanent positions and also include stock grants that, over the last five years, have averaged 9% of pay for Amazon’s full-time workers. And the company said many workers would also be eligible for 95% tuition reimbursement for those attending college, whether or not their field of study is related to their job.
In addition, Amazon is looking for 2,000 workers for its customer service department, with those jobs being a mix of full-time, part-time and seasonal positions.