CHATTANOOGA, Tenn. — 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 today during a trip to an Amazon.com distribution center in Chattanooga, Tenn.
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.
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.”