Politics
11:01 pm
Tue September 13, 2011

GOP Opposes Obama Call To Pay For Jobs With Taxes

Originally published on Wed September 14, 2011 2:21 pm

Republicans aren't exactly crazy about the public works spending President Obama proposes in his $447 billion jobs bill sent to Congress this week, but they are even less enamored with how the president wants to pay for it: by ending a slew of tax breaks for wealthy individuals and corporations.

Under his plan, households with annual incomes of more than $250,000 would have tax deductions for mortgages and charitable contributions capped; firms with corporate jets would get a smaller annual tax break; hedge fund managers would have to pay income tax rather than the much lower capital gains tax.

"We've got to decide what our priorities are," Obama said at a Columbus, Ohio, high school Tuesday. "Do you want to keep tax loopholes for oil companies? Or do you want to renovate more schools ... so the construction workers have jobs again?

"Do you want to keep tax breaks for multimillionaires and billionaires, or do you want to put teachers back to work and help small businesses and cut taxes for middle class families?"

Opposition To Plan

Republicans were having none of it.

Senate Minority leader Mitch McConnell (R-KY) accused the president of pushing permanent tax increases to finance a temporary economic stimulus. McConnell saw no chance of Congress accepting the president's so-called pay-fors.

"I don't think the pay-fors are going to go anywhere because we know these are not new ideas," he said. "The pay-fors have all been around the track before, and there is bipartisan opposition to every one of them."

Indeed, there are conservative Democrats such as Nebraska Sen. Ben Nelson who, like virtually every Republican, oppose making anyone pay more taxes.

"Effectively raising taxes is in this point of time, in my opinion ... not the way to go," Nelson said.

But other Democrats say Obama is right to lean on the wealthy to pay for his jobs bill. Dick Durbin, the Senate's No. 2 Democrat, says it's Republicans who insist the bill be paid for.

"If they've got other sources to pay for it, let's hear from them," he said. "But, you know, it isn't going to be a matter of cutting spending to create tax cuts for working people. At some point, some Republicans have to step up and acknowledge that one more penny in taxes on the wealthiest people in America is not punitive."

Deficit-Reduction Panel

The White House says there is another way to pay for the jobs bill: by letting the newly formed supercommittee on deficit reduction come up with a plan to offset its costs.

Sen. Jon Kyl (R-AZ), a committee member, says he can't see the panel trying to find the pay-fors to underwrite Obama's plan.

"First of all, it assumes that the committee members will agree with his stimulus program, I don't think they will, but secondly, that we'll just volunteer to find a way to pay for it," Kyl said. "He said it's paid for, well, it's only paid for apparently if this joint select committee can figure out a way to pay for it; we've got a big enough problem coming up with $1.5 trillion in savings."

At the supercommittee's very first hearing Tuesday, Douglas Elmendorf, the director of the Congressional Budget Office, was the sole witness. His main message: raising taxes now is not a good idea, but neither is cutting spending:

"The combination of fiscal policies likely to be most effective would be policies that cut taxes or increased spending in the near term, but over the medium and longer term, move in the opposite direction, and cut spending or raise taxes."

But Elmendorf did not specify just whose taxes should eventually be raised.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

DAVID GREENE, host: It's MORNING EDITION from NPR News. Good morning. I'm David Greene.

STEVE INSKEEP, host: And I'm Steve Inskeep.

The jobs bill that President Obama sent to Congress this week includes payroll tax cuts, infrastructure spending and more - a total cost of $447 billion. The next question is how to keep that from expanding the nation's debt. While many Republicans are skeptical the plan will work, they're even less enamored with how the president wants to pay for it - ending many tax breaks for wealthy individuals and corporations. Here's NPR's David Welna.

DAVID WELNA: To offset the cost of creating jobs for possibly millions of idled workers, President Obama is asking this of Congress: make rich people pay more taxes.

Households with annual incomes of more than a quarter million dollars would have tax deductions for mortgages and charitable contributions capped. Firms with corporate jets would get a smaller annual tax break. Hedge fund managers would have to pay income tax rather than the much lower capital gains tax. Yesterday, at a Columbus, Ohio high school, President Obama presented some stark choices.

President BARACK OBAMA: We've got to decide what our priorities are. Do you want to keep tax loopholes for oil companies?

UNIDENTIFIED GROUP: No.

OBAMA: Or do you want to renovate more schools like Fort Hays so that construction workers have jobs again?

(SOUNDBITE OF APPLAUSE)

OBAMA: Do you want to keep tax breaks for multimillionaires and billionaires?

UNIDENTIFIED GROUP: No.

OBAMA: Or do you want to put teachers back to work and help small businesses and cut taxes for middle-class families?

(SOUNDBITE OF APPLAUSE)

WELNA: Back at the Capitol, Republicans were having none of it. Senate Minority leader Mitch McConnell accused the president of pushing permanent tax hikes to finance a temporary economic stimulus. McConnell saw no chance of Congress accepting the president's so-called pay-fors.

Senator MITCH MCCONNELL: I don't think the pay-fors are going to go anywhere, because we know these are not new ideas. The pay-fors have all been around the track before. And there is bipartisan opposition to every one of them.

WELNA: Indeed, there are conservative Democrats such as Nebraska Senator Ben Nelson who, like virtually every Republican, oppose making anyone pay more taxes.

Senator BEN NELSON: Effectively raising taxes is in this point of time, in my opinion, is not the way to go.

WELNA: But other Democrats say the president's right to lean on the wealthy to pay for his jobs bill. Dick Durbin, who's the Senate's number two Democrat, says it's Republicans who insist the bill be paid for.

Senator DICK DURBIN: I mean, if they've got other sources to pay for it, let's hear from them. But, you know, it isn't going to be a matter of cutting spending to create tax cuts for working people. At some point, some Republicans have to step up and acknowledge that one more penny in taxes on the wealthiest people in America is not punitive.

WELNA: The White House says there is another way to pay for the jobs bill, and that's by letting the newly formed supercommittee on deficit reduction come up with a plan to offset its costs. Jon Kyl, who's the Senate's number two Republican, is on that committee. He cannot see that panel trying to find the pay-fors to underwrite the president's plan.

Senator JON KYL: First of all, it assumes that the committee members will agree with his stimulus program. I don't think they will. But secondly, that we'll just volunteer to find a way to pay for it. He said it's paid for. Well, it's only paid for apparently if this joint select committee can figure out a way to pay for it. We've got a big enough problem coming up with $1.5 trillion in savings.

WELNA: At the supercommittee's very first hearing yesterday, Congressional Budget Office Director Douglas Elmendorf was the sole witness. His main message: raising taxes now is not a good idea, but neither is cutting spending.

DOUGLAS ELMENDORF: The combination of fiscal policies likely to be most effective would be policies that cut taxes or increase spending in the near term, but over the medium and longer term, move in the opposite direction, and cut spending or raise taxes.

WELNA: But Elmendorf did not specify just whose taxes should eventually be raised.

David Welna, NPR News, the Capitol. Transcript provided by NPR, Copyright NPR.