Boehner Calls for Two-Year Freeze on All Tax Rates

Wednesday, 08 Sep 2010 07:59 AM

 

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House Republican Leader John Boehner on Wednesday proposed a two-year freeze on all tax rates and a cut in government spending to the levels of 2008, before a deep recession took hold of the economy.

In a broadcast interview, the Ohio Republican said he was offering a "bipartisan" alternative to the package of business tax incentives and infrastructure spending that President Barack Obama was slated to announce later Wednesday in Cleveland.

Obama has charged that the GOP criticizes him harshly, without offering any policy alternatives. Boehner touted his freeze-and-cut roadmap to recovery as an option instead of a catchall spending bill that Congress would pass later this fall, the Associated Press reported.

Boehner said the biggest problem with the economy currently is the "uncertainty facing small businesses" that have been reluctant to engage in significant new hiring.

Appearing on ABC's "Good Morning America," Boehner said the American people are asking, "Where are the jobs?" and that the Obama White House is "out of touch" with voters. But he also said that "I'm open to the president's ideas."

Obama was traveling to Cleveland, Ohio, in a personal challenge to Boehner, who used a recent visit to the city to demand the president sack his top economic aides.

In what USA Today bills as the "battle of Cleveland," Obama was highlighting a multibillion-dollar package of tax breaks for businesses and spending on transport infrastructure meant to spur jobs growth and woo voters.

His plan, which faces an uncertain fate in Congress with lawmakers fixated on their own political skins ahead of the November 2 polls, appears to be a bid by Obama strategists to ease their boss's political weakness on the economy.

"We are in a very political period, people are going to be making choices," said a senior Obama administration official on condition of anonymity, AFP reported.

"It is propitious we will be in Cleveland, where Boehner was a couple of weeks ago, unveiling what he said was the Republican economic vision."

Boehner, a conservative Ohio Republican with a colorful turn of phrase, is eyeing the speaker's chair with his party tipped to grab control of the House from Democrats.

On August 24, in the city hugging the southern shore of Lake Erie, Boehner slammed Obama for "job killing tax hikes" and claimed the president had left America broke — though Boehner offered few detailed policies of his own.

Obama will accuse Republicans of pining for policies that caused the crisis, argue his actions prevented an even deeper disaster, and promote new initiatives costing around 180 billion dollars.

He will highlight a new plan to allow companies to fully deduct the cost of investments in equipment for their business from their tax bill.

The largest-ever temporary investment incentive in U.S. history would accelerate $200 billion in tax cuts over the next two years — most of which would eventually be paid back to the government.

Obama will also propose expanding a research and experimentation tax credit for businesses by 20 percent, a program worth about 100 billion dollars over 10 years.

He will also offer further details of the plan he unveiled in Wisconsin on Monday, for an immediate $50 billion investment in transport infrastructure.

The president will also likely reject the idea of extending Bush-era tax cuts for people earning more than $250,000, setting up a populist showdown with Republicans on the campaign trail.

Republican Senate minority leader Mitch McConnell warned late Tuesday that such a move would hit many small businesses and was tantamount to "a massive tax hike" in the "middle of a recession."

Obama's aides admit that they face an uphill task in getting his plans through Congress in the four weeks before lawmakers hit the campaign trail.

"The president is doing his job, which is to propose ideas to move this country forward . . . We are not calibrating these decisions based on a political calendar," said a senior official.

But Republicans will brand the approaches Obama lays out on Wednesday as the act of a president doubling down on a failed economic bet — the $800 billion stimulus plan he passed last year.

Boehner got in a preemptive strike on Tuesday.

"It shows how out of touch the White House is," Boehner told CNBC.

"Instead of working on getting the economy going again and getting people back to work, the White House is panicked over what I've got to say."

"I don't think the American people want any more 'stimulus' spending coming out of Washington . . . I think the White House is missing the big point here."

Obama aides refuse to characterize the latest measures as a "stimulus" — recognition perhaps of Republican successes in painting last year's plan as a massive government spending spree that failed.

Senior officials previewed Obama's plans amid more grim news for Democrats in polls suggesting the party faces a shellacking in November.

A Wall Street Journal/NBC News poll gave Republicans a yawning 49 percent to 40 percent advantage among likely voters, probably enough for them to grab back control of the House.

All 435 House seats are up for grabs along with 37 of the 100 Senate seats.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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