Obama would hike taxes to pay for his jobs bill

Associated Press
President Barack Obama, accompanied by Vice President Joe Biden, and others, holds up a copy of his American Jobs Act during a statement in the Rose Garden of the White House in Washington, Monday, Sept. 12, 2011. (AP Photo/Susan Walsh)
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WASHINGTON (AP) — In a sharp challenge to the GOP, President Barack Obama proposed paying for his costly new jobs plan Monday with tax hikes that Republicans have already emphatically rejected. The reception to his new proposal was no more welcoming, setting the stage for a likely new fight with Congress.

Flanked at the White House by workers he said the legislation would help, Obama declared, "This is the bill that Congress needs to pass. No games. No politics. No delays." He sent it to Capitol Hill saying, "The only thing that's stopping it is politics."

The president's proposal drew criticism from House Speaker John Boehner, who'd previously responded in cautious but somewhat receptive tones to the $447 billion jobs plan made up of tax cuts and new spending that Obama first proposed in an address to Congress last Thursday.

"It would be fair to say this tax increase on job creators is the kind of proposal both parties have opposed in the past. We remain eager to work together on ways to support job growth, but this proposal doesn't appear to have been offered in that bipartisan spirit," Boehner spokesman Brendan Buck said.

The biggest piece of the payment plan would raise about $400 billion by eliminating certain deductions, including on charitable contributions, that can be claimed by wealthy taxpayers. Obama has proposed that in the past — to help pay for his health care overhaul, for example — and it's been shot down by Republican lawmakers along with some Democrats.

Yet by daring Republicans anew to reject tax hikes on the rich Obama could gain a talking point as the 2012 presidential campaign moves forward, if not a legislative victory.

At a Rose Garden event Monday, Obama brandished his jobs bill in the air and surrounded himself with police officers, firefighters, teachers, construction workers and others he said would be helped by it. Adopting a newly combative tone that's been welcomed by dispirited Democrats, Obama demanded immediate action on the legislation, which the White House sent to Capitol Hill Monday afternoon.

"Instead of just talking about America's job creators, let's actually do something for America's job creators."

Obama told of reading a quotation in a newspaper article from a Republican congressional aide who questioned why Republicans should work with Obama since the result might just be to help the president politically. "That was very explicit," Obama said.

Buck, the Boehner spokesman, said the anonymous quote cited by the president didn't reflect the view of Republican leadership.

And even as Obama was accusing Republicans of playing politics, he and his Democratic allies were marshaling an aggressive political response of their own.

Obama was traveling to Boehner's home state of Ohio Tuesday to promote his jobs plan, and following that with a trip Wednesday to North Carolina, a traditionally Republican state he won in 2008.

He was getting backup from the Democratic National Committee, which announced a television ad campaign starting Monday to promote Obama's jobs plans in key swing and early-voting states and to call on voters to pressure their lawmakers for support. The ads urge viewers to "Read it. Fight for it. ... Pass the President's Jobs Plan."

The back-and-forth was taking on elements of a political campaign, with high stakes for both sides as Obama heads into his re-election fight with the economy stalled, unemployment stuck at 9.1 percent and polls showing deep public unhappiness with his leadership on the economy.

In an appearance later Monday with his aides on five African-American news Web sites, Obama suggested that even a legislative loss for his plan could translate into a political win for him.

"I need people to be out there promoting this and pushing this and making sure that everybody understands the details of what this would mean, so that one of two things happen: Either Congress gets it done, or if Congress doesn't get it done people know exactly what's holding it up," the president said.

The jobs package would combine tax cuts for workers and employers by reducing the Social Security payroll tax, with spending elements including more money to hire teachers, rebuild schools and pay unemployment benefits. There are also tax credits to encourage businesses to hire veterans and the long-term unemployed.

The payment method the White House announced Monday would consist of:

—$405 billion from limiting the itemized deductions for charitable contributions and other deductions that can be taken by individuals making over $200,000 a year and families making over $250,000;

—$41 billion from closing loopholes for oil and gas companies;

—$18 billion from requiring fund managers to pay higher taxes on certain income;

—$3 billion from changing the tax treatment of corporate jets.

White House Budget Director Jacob Lew said that Obama will also include those tax proposals in a broader debt-cutting package he plans to submit next week to a congressional "supercommittee" charged with finding $1.2 trillion in savings later this year. He said that the supercommittee would have the option of accepting the payment mechanisms for the jobs bill proposed by Obama, or proposing new ones.

Republicans have indicated they're receptive to supporting Obama's proposed payroll tax cut and finding a way to extend unemployment benefits, though many have rejected Obama's planned new spending. Obama's new proposal Monday to pay for it all by raising taxes without any proposals to cut spending is unlikely to win him any new GOP support for any element of his plan.

"I sure hope that the president is not suggesting that we pay for his proposals with a massive tax increase at the end of 2012 on job creators that we're actually counting on to reduce unemployment," said House Majority Leader Eric Cantor, R-Va.

The new DNC ads are airing in: Denver; Tampa and Orlando, Fla.; Des Moines, Iowa; Las Vegas; Manchester, N.H.; Raleigh and Charlotte, N.C.; Columbus and Cleveland, Ohio and Norfolk, Richmond and Roanoke, Va.; as well as Washington, D.C.

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Associated Press writers Julie Pace and Darlene Superville contributed to this report.

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