Obama's tax-credit plan getting a cool reception
Thursday, September 9, 2010
Facing a rising jobless rate and the possibility of a GOP blowout in the November midterm elections, President Obama sought Wednesday to convince voters that he is charting a new path to revive the American economy.
But Obama's proposal for $180 billion in fresh infrastructure spending and business tax breaks is not satisfying many of the groups he needs on his side - not lawmakers on Capital Hill who are leery of raising the deficit by spending more, not economists who say the plan is too modest to create many jobs, and not business groups that say the tax benefits come with too many strings attached.
Even some vulnerable Democrats - who have been begging the White House for a jobs strategy to present to recession-battered voters - quickly condemned the president's latest proposal, suggesting that it bears an uncomfortable resemblance to last year's unpopular stimulus package.
"I will not support additional spending in a second stimulus package," said Sen. Michael Bennet (D-Colo.), a close White House ally in a tough race against Republican Ken Buck, who has campaigned against government spending.
Bennet suggested that Obama recycle "unused funds" from last year's stimulus if he wants to "improve our infrastructure."
"We must make hard choices to significantly reduce the deficit," he said.
In a speech in Cleveland, Obama suggested that congressional Republicans should find much to admire in his latest economic package.
His plan would make permanent a corporate tax credit for research and allow companies to deduct from their taxes this year and next the entire cost of whatever they spend in new investments - ideas pulled directly from GOP playbooks.
President George W. Bush proposed to increase the deduction for investments at least three times during his eight years in office.
Obama's proposals were unveiled after months of criticism from prominent chief executives who have said the president is out of touch with the needs of big business in a slow economy.
But his speech was also notable for what it didn't say: how all of this will be paid for.
The White House has said the proposals could be paid for in three ways: raising taxes on corporations with large international operations, eliminating tax benefits for oil and gas firms, and increasing enforcement of tax payments by firms. But senior administration officials declined to go into further detail, referring reporters to the president's February budget, in which more than $300 billion in options are laid out.