Updated 10:56 a.m. | Even before President Barack Obama makes his new “grand bargain” offer official in a speech Tuesday, Republican leaders insisted it was neither grand, nor a bargain.
A senior House GOP leadership aide said the “the first we heard about this 'offer' was through the press, so it’s probably not really a serious effort to break the logjam and should not be reported as such.”
Obama, in an economic address at an Amazon.com distribution center in Chattanooga, Tenn., is expected to announce Tuesday the details of a new proffer that would cut corporate tax rates, which Republicans have long derided as too high. It also would grant additional stimulus spending, which Democrats and the president have long called for to create jobs and address the nation’s aging infrastructure.
"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.
Speaker John A. Boehner's office remained unimpressed.
“The president has always supported corporate tax reform,” said Michael Steel, spokesman for the Ohio Republican. “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."
Senate Minority Leader Mitch McConnell, R-Ky., also weighed in, saying the proposal included "a tax hike," an apparent reference to Obama's reported plan to tax overseas earnings. McConnell's prepared remarks for the Senate floor said this:
Reports of the deal trickled out Tuesday morning through various news organizations and had many on Capitol Hill scratching their heads. A senior House GOP leadership aide said Republicans “have always” been opposed to a corporate-only tax overhaul.
It’s just a further-left version of a widely panned plan he already proposed two years ago – this time, with extra goodies for tax-and-spend liberals.
The plan, which I just learned about last night, lacks meaningful bipartisan input, and the tax hike it includes is going to dampen any boost businesses might otherwise get to help our economy. In fact, it could actually hurt small businesses. And it represents an unmistakable signal that the President has backed away from his campaign-era promise to corporate America that tax reform would be revenue neutral to them.
“Not only is this a rebuke to one of his party’s most senior Senators – the Finance Committee Chairman – it also represents a serious blow to one of the best chances for true bipartisan action in Washington. I truly hope the President re-considers this plan and consults with Congress before moving any further.
“Cutting the corporate rate to 28 percent or 25 percent, while leaving the individual rate at 39.6 percent, would have a devastating effect on small businesses in America,” the aide said, referring to the top individual rate.
Efforts to overhaul the corporate tax rate have usually been coupled with an effort to overhaul the individual tax rate. Republicans want both tax rates lowered. But Democratic willingness to lower corporate tax rates may be the carrot conservatives need to agree to additional stimulus spending.
The White House has not yet said exactly how much it is willing to lower corporate tax rates, nor how much stimulus spending it seeks. But Democrats were already praising the offer.
“While deficit reduction continues to be an important goal, more and more decision-makers are realizing that our greatest problem is the decline in middle-class incomes,” Sen. Charles E. Schumer said in a statement Tuesday morning.
“With these speeches, the president is adroitly and powerfully beginning to move the debate in that direction," Schumer said. "It is both substantively and politically the right thing to do.”