President Embraces Corporate Tax Rate Cut
President proposes corporate tax reform in exchange for infrastructure spending. NYT: "Mr. Obama outlined the terms of his tax plan in early 2012 during the presidential election, when he said the corporate tax rate would be reduced to 28 percent, from 35 percent, with a lower rate of 25 percent for manufacturing firms ... In the Republicans’ view, Mr. Obama’s offer was less of a 'grand bargain' than an effort to extract a new fiscal stimulus program with money from a corporate tax cut that would end up, for accounting reasons, initially generating billions of dollars of revenue for the government."
Lack of specificity over what would happen to cash parked overseas. W. Post's Ezra Klein: "This policy actually gets to one of the most interesting and difficult problems in tax reform: What do you do with the $1.5-2 trillion in foreign earnings that’s sitting overseas because corporations don’t want to pay American tax rates? The business community’s favored solution is a 'repatriation holiday.' That’s when Congress temporarily cuts taxes for corporations bringing money back from overseas ... Both the White House and House Republicans have settled on a different solution: A small, one-time fee on all deferred foreign earnings ... After paying the fee, that money is free and clear so far as the taxman is concerned — corporations can bring it back, leave it overseas, or set it on fire ... both the White House and the House Republicans only see this fee happening in the context of a broader corporate tax reform deal that includes a complete overhaul of how we tax foreign earnings — the White House wants a global minimum tax, and House Republicans want to leave foreign earnings alone."
Corporations complain. US News: "'The president used all the right buzz words but said nothing of substance,' says Martin Regalia, chief economist at the U.S. Chamber of Commerce, in an emailed statement. He blasted the president's plan as incomplete, since it doesn't also reform the individual income tax code, whose rates some small businesses pay instead of the corporate rates. The Business Roundtable agreed. While the group says it welcomes lower rates, it also believes the president's plan doesn't go far enough. '[C]orporate tax reform should be part of a comprehensive fix for the individual and business tax codes,' the group's president, John Engler, said in a statement. Both groups also voiced concerns over the use of revenues from reform for spending in other areas like infrastructure."
GOP Grapples With Shutdown Push
GOP splits over shutdown as Boehner and McConnell stay mum. The Hill: "The battle pits powerful rank-and-file freshmen such as Sens. Ted Cruz (R-Texas), Marco Rubio (R-Fla.) and Rand Paul (R-Ky.) against veteran Washington players, including Karl Rove, Rep. Tom Cole (R-Okla.) and Sens. John McCain (R-Ariz.) and Tom Coburn (R-Okla.) ... Speaker John Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Ky.) have been non-committal on their strategy. However, they have previously signed off on deals that funded ObamaCare implementation. The issue is particularly sensitive for McConnell, who is facing a primary challenge ... McConnell has reportedly pressured Republican senators to back away from the shutdown plan, conceived by Lee. But at a Tuesday press conference, hours after Cruz swore to mobilize a 'grassroots army' behind Lee’s strategy, the minority leader kept his poker face."
But Boehner reportedly will propose an alternative to shutdown to GOP caucus today. Politico: "Boehner (R-Ohio) will give a presentation saying that the House Republican leadership supports continuous votes to build 'on the successful, targeted strikes against the law that took place in the House this month and resulted in significant Democratic defections, chipping away at the legislative coalition that keeps the president’s health care law on the books,' a GOP leadership aide said on Tuesday evening ... But House leadership thinks a government shutdown would be treacherous for the GOP majority. Boehner, speaking on Tuesday afternoon at a closed leadership meeting where the strategy was discussed, warned of the political dangers of shutting down the federal government, according to sources both present and familiar with the meeting."
Some Republicans hopeful for deal on sequester that may cut some entitlement spending. The Hill: "Senate GOP centrists, including some who have bucked their party’s leaders on a series of issues in recent weeks, hope they can reach a breakthrough this week that could lead to a deal to end the sequester. While a grand-bargain deficit-reduction plan seems out of reach, Sen. John McCain (Ariz.) and other Republican senators believe a compromise that would end or reduce the sequester and increase agency budgets is possible ... Corker said two options are being discussed: a small deal that would replace some of the next eight years’ automatic spending cuts with different spending cuts and new taxes, or a larger, multi-trillion-dollar deal that would include broader changes to entitlements and the tax code. "
Breakfast Sides
Obama looking to take more executive action on the economy. Politico: "...CBC members asked him to change the Medicaid process in territories to base allocations on income level, to repeal the Bush minimum wage federal contractor policies and to address child welfare ... Obama told them he was open to all of them, and said his staff is working on others in the model of the new emission standards he announced as part of his climate agenda last month. Eventually, executive actions and orders will be unveiled as part of the economic agenda Obama began hinting at in his speeches last week, addressing things like mortgage refinancing and restructuring ..."
Senate confirms NLRB picks. AP: "The Senate voted Tuesday to fill all five seats on the National Labor Relations Board ... Without confirmation of at least one of them before Congress’ recess, much of the NLRB’s work would have ground to a halt by late August."
