CQ TODAY ONLINE NEWS
Updated May 8, 2012 – 5:21 p.m.
Reid to Push on Latest Obama Plan
By Alan K. Ota, CQ Staff
Senate Democrats are preparing to move as early as this week on a first piece of President Obama’s latest agenda for spurring job creation and mortgage refinancing.
But Senate Republicans quickly gave Obama’s proposals a thumbs down, meaning that Majority Leader
The legislative proposals Obama outlined during a speech at a science and engineering college in Albany, N.Y., on Tuesday include elimination of tax benefits for companies that locate overseas and renewed tax breaks for producers of renewable energy.
The president also called for streamlining mortgage market regulations to help homeowners refinance mortgages at lower interest rates and establishing a job corps training program to help veterans get jobs as police, firefighters or community service workers. He urged Congress to pass legislation to provide a 10 percent income tax credit to companies that increase their payrolls or give workers pay raises and to continue the ability of businesses to deduct the full cost of new equipment through the end of this year.
Senate Democratic leaders plan to begin their effort to implement the administration’s agenda by offering an extension of the depreciation tax break, coupled with a new tax credit equal to 10 percent of the cost of new job creation or wage increases in 2012. The new credit would be capped at $500,000, a move the administration says would focus its impact on smaller companies.
Reid, D-Nev., has introduced a bill (
A cloture vote would put Republicans in the position of supporting an Obama proposal or opposing a business-friendly tax bill. However, Republicans might argue that a simpler and better approach is a House-passed measure (
Reid praised Obama’s proposals, saying Democrats will work to pass them to “strengthen our economic recovery and create jobs.” It will be June at the earliest, however, before the Senate takes up other measures on the to-do list the president offered Tuesday, a senior Democratic aide said.
Republican Opposition
Republican senators portrayed Obama’s latest proposals as too modest, and signalled they will oppose much of the president’s election year effort to seize the high ground on employment and the economy.
“These are anemic proposals,” said Minority Whip
Instead of supporting items on Obama’s to-do list, added Republican Conference Chairman
Sen.
Reid to Push on Latest Obama Plan
Majority Whip
“Speaker [John A.] Boehner is gaming this. He does not want us to bring up these extenders . . . and he’s holding it off so it becomes part of the journey to the cliff at the end of the year for bargaining purposes,” Durbin said.
Boehner spokesman Brendan Buck declined to comment on plans for handling the production tax credit, but said the Senate should act on House-passed bills to spur job growth. “The House has sent the Senate a lengthy ‘to-do list’ — more than two dozen jobs bills — they should focus on right now,” Buck said.
Boehner said in an interview on CNBC Tuesday the House will vote to extend the 2001 and 2003 income tax rates for at least a year before the November elections. “Otherwise, we’re going to have this mess stacked up until after the election. And you want to talk about train wreck. You’re talking about a big one,” the Speaker said.
Senior Democratic aides said Obama’s veterans jobs corps initiative could incorporate provisions of several proposals including one (
And aides said party leaders were likely to respond to Obama’s request for legislation to ease home mortgage refinancing by moving a draft bill by Democrats
“By introducing more competition into the mortgage market, our bill will ensure that the benefits of refinancing will flow to homeowners struggling to make ends meet, not to banks,” Boxer said in a written statement.
Offsets Under Discussion
In an earlier analysis, the Joint Committee on Taxation estimated that the new jobs tax credit and investment incentive would together reduce tax revenue by about $26 billion over 10 years. Reid’s legislation does not include offsetting revenue increases or spending reductions.
Begich said another potential offset is a tax increase for owners of S corporations. Democrats have also proposed such a move to pay for stalled legislation (
Democrats have long called for ending tax provisions that benefit companies that move overseas. The president’s proposal would use resulting revenue to pay for a 20 percent tax credit for companies that move operations back into the United States.
Grassley said Republicans will probably not support Obama’s proposal to prevent companies from taking the tax deduction that offsets moving expenses for companies that relocate overseas, even if they support the tax credit for companies that move their operations back to the United States. “Half of that proposal is okay — encourage businesses to come to this country,” Grassley said.
Reid to Push on Latest Obama Plan
Niels Lesniewski and Sam Goldfarb contributed to this story.
First posted May 8, 2012 1:00 p.m.