Jobs Pivot: Obama Proposes ‘Grand Bargain,’ Exchanging Corporate Tax Reform in Exchange for New Programs

The president is in the midst of a summer campaign for a ‘middle out’ economic overhaul

Obama Proposes 'Grand Bargain' for Jobs (AP)

WASHINGTON (AP) - President Barack Obama is extending a new proposal to Republicans that he hopes will break the political gridlock on budget negotiations, offering to cut corporate tax rates in exchange for job investments.

White House officials say just because they're at an impasse with congressional Republicans over a grand bargain on reducing the deficit doesn't mean they shouldn't look for other areas of agreement. So Obama plans to use a trip to an distribution center in Chattanooga, Tenn., on Tuesday to propose a "grand bargain for middle-class jobs."

Obama long has called for a cut in corporate tax rates, but previously insisted such business tax reform be coupled with an individual tax overhaul. He's dropping that demand and says instead that he's open to the corporate tax cut that that businesses crave. But he wants it to be coupled with a significant investment on some sort of job creation program, such as manufacturing, infrastructure or community colleges.

"As part of his efforts to focus Washington on the middle class, today in Tennessee the president will call on Washington to work on a grand bargain focused on middle-class jobs by pairing reform of the business tax code with a significant investment in middle-class jobs," Obama senior adviser Dan Pfeiffer said.

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