House Republican leaders Tuesday reacted negatively to a proposal
floated by President Obama to cut corporate taxes in exchange for higher
spending on job-creation programs.
The president is traveling Tuesday to Chattanooga, Tenn., where he is expected to outline the proposal as part of a "grand bargain" to create more middle class jobs. But a spokesman for Speaker John A. Boehner, Ohio Republican, said Mr. Obama is trying to have it both ways on taxes and spending.
"The president has always supported corporate tax reform," said Boehner spokesman Michael Steele. "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."
Mr. Obama plans to use the trip to an Amazon.com distribution center in Chattanooga to build on his summer series of speeches focusing on the middle class. The president long has called for a cut in corporate tax rates, but previously insisted such tax reform be coupled with an individual tax overhaul.
Now he's expected to drop that demand in favor of combining a corporate tax cut with more government spending on programs to boost job growth in manufacturing or construction projects.
It's the first new economic idea from the president as he prepares to battle House Republicans in September on budget cuts and raising the nation's borrowing limit.
A House Republican leadership aide said the president's proposal would raise tens of billions in tax revenue, which the GOP opposes.
The aide also said that cutting corporate taxes from 35 percent to 28 percent or lower, while keeping the top individual tax rate at 39.6 percent, "would have a devastating effect on small businesses in America."
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