THURSDAY, SEPTEMBER 9, 2010


KLMNO Democrats attack GOP in speeches


Economy is main subject of addresses


to energize party base BY ANNE E. KORNBLUT


AND LORI MONTGOMERY


cleveland —President Obama and other leading Democrats lashed out at Republicans on Wednesday in a pair of tough- talking speeches intended to en- ergize their party’s base and frame the fall elections. In a far-reaching economic ad-


dress in Cleveland, Obama ac- cused Republicans of distorting recent history by saying that Democrats are responsible for the nation’s faltering employ- ment rate and ballooning deficit. And he made clear that he oppos- es extending tax cuts for the wealthy that were enacted by President George W. Bush and are set to expire at the end of the year.


But Obama made his argu-


ments about more than just eco- nomic policies, saying core Amer-


ican values — such as hard work and individual responsibility — are at stake in the November midterm elections. “I had a single mom who put


herself through school, and would wake before dawn to make sure I got a decent education. Michelle can still remember her father heading out to his job as a city worker long after multiple sclerosis had made it impossible for him to walk without crutch- es,” Obama told the crowd of about 800 at Cuyahoga Commu- nity College. “Yes, our families believed in


the American values of self-reli- ance and individual responsibili- ty, and they instilled those values in their children,” he continued. “But they also believed in a coun- try that rewards responsibility. A country that rewards hard work. A country built upon the promise of opportunity and upward mo- bility.” In Philadelphia, Democratic


National Committee Chairman Timothy M. Kaine defended his party’s record on the economy, health-care reform and financial regulation. He acknowledged


that the political climate is treacherous for his party, but said that “tough is what Democrats do.” “We campaign tough, we win


tough, we govern tough,” he said. In his introduction of Kaine,


Pennsylvania Gov. Edward G. Rendell (D) ridiculed Republi- cans, saying theGOPisnowbeing run by “fruit loops.” “It’s a party that’s slowly but


surely being taken over by wackos,” he said. “They’re nuts. They’re flat-out crazy.” The speeches came as Demo-


crats face dipping poll numbers when it comes to the economy. In a newWashington Post-ABC poll, 43 percent of voters said they prefer Republicans on financial issues, compared with 39 percent for Democrats, the first time the GOP has been ahead on the question since 2002. The White House chose Cleve- land for Obama’s trip as a direct rebuttal to HouseMinority Lead- er JohnA. Boehner (R-Ohio),who in the same city twoweeks earlier called on the president to fire his economic team. Obamaseemed to revel in criti-


cizing Boehner’s speech. “There were no new policies from Mr. Boehner. There were no new ideas. There was just the same philosophy we already tried dur- ing the decade that they were in power — the same philosophy that led to this mess in the first place: cut more taxes for million- aires and cut more rules for corporations,” he said. Boehner, meanwhile, sought to


take advantage of Obama’s visit, announcing what he called a new “two-point plan” to freeze spend- ing and continue the Bush tax cuts. On the Bush-era cuts, Obama


took the position his administra- tion has sought for months to defend: Tax cuts for the middle class should be extended, but taxes on families earning more than $250,000 a year should be able to be raised. Obama also discussed his pro-


posal for $180 billion in new business tax breaks and infra- structure spending to help the nation’seconomy. But rather than selling that plan to voters, he again used it to draw a contrast with Republicans.


LARRY DOWNING/REUTERS


President Obama speaks about the economy at Cuyahoga Community College, near Cleveland.


For example, the president


said he wants make permanent an existing tax credit for research and development — a provision that helps keep jobs in theUnited States. He also wants to allow corporations to write off 100 per- cent of their investments in 2011. To cover the cost — about $130 billion over the next decade — Obama said he would close “bil-


lions of dollars in tax breaks that encourage companies to create jobs and profits in other coun- tries.”


kornbluta@washpost.com montgomeryl@washpost.com


Montgomery reported from Washington. Staff writer Philip Rucker in Philadelphia contributed to this report.


Obama plan for corporate tax credit gets cool reception, even from Democrats credit from A1


to last year’s unpopular stimulus package. “I will not support additional


spending in a second stimulus package,” said Sen.Michael Ben- net (D-Colo.), a close White House ally in a tough race against Republican Ken Buck, who has campaigned against government spending. Bennet suggested that Obama


recycle “unused funds” from last year’s stimulus if he wants to “improve our infrastructure.” “We must make hard choices


to significantly reduce the defi- cit,” he said. In a speech in Cleveland,


Obama suggested that congres- sional Republicans should find much to admire in his latest economic package. His plan would make perma-


nent a corporate tax credit for research and allow companies to deduct from their taxes this year


and next the entire cost of what- ever they spend in new invest- ments — ideas pulled directly fromGOP playbooks. PresidentGeorgeW. Bush pro-


posed to increase the deduction for investments at least three times during his eight years in office. Obama’s proposals were un-


veiled after months of criticism from prominent chief executives who have said the president is out of touchwith the needs of big business in a slow economy. But his speech was also nota-


ble for what it didn’t say: how all of this will be paid for. The White House has said the


proposals could be paid for in three ways: raising taxes on corporations with large interna- tional operations, eliminating tax benefits for oil and gas firms, and increasing enforcement of tax payments by firms. But se- nior administration officials de- clined to go into further detail,


referring reporters to the presi- dent's February budget, in which more than $300 billion in op- tions are laid out. White House spokeswoman


Amy Brundage said the proposed revisions to the tax code “are broadly supported by econo- mists and business leaders as ways to encourage investment and R&D in the United States.” Some companies such as Intel


and General Electric said they would reserve judgment until they see details. Yet many busi- ness groups reacted coolly to Obama’s ideas to pay for the tax cuts. “The new taxes would negate


the intended effects of these new policies,” the Business Roundta- ble, an industry group that has often aligned itself with the White House, said in a state- ment. Senate Republicans also


quickly rejected the administra- tion’s plan.


“More taxes and more spend-


ing makes as much sense as throwing a drowning man an anvil,” Sen. Orrin G. Hatch (R- Utah) said. The president’s budget from


February offers some clues into how the administration wants to pay for its package of tax breaks and infrastructure spending. Perhaps the most controver-


sial is a plan to revamp the taxes multinational companies pay. The administration stated in the budget that it wants to make it harder for these companies to reduce their tax bills in the United States by claiming a cred- it on levies paid to foreign gov- ernments. The president has frequently


said that an overhaul of this part of the corporate tax code will make it more expensive for com- panies to operate overseas and discourage them from shipping jobs out of the country. “For years, our tax code has


actually given billions of dollars in tax breaks that encourage companies to create jobs and profits in other countries,” Obama said Wednesday. “I want to change that.” But the White House has run


into vociferous opposition from politically influential firms. In early 2009, after the admin-


istration proposed raising $200 billion in higher taxes for multinational companies in 2009, chief executives including John Chambers of Cisco, James Owens of Caterpillar and Paul Otellini of Intel trekked toWash- ington to personally protest. The administration backed


down this yearwhen it presented the president’s budget for 2011, scaling back the proposed tax hikes onmultinationals by about half. The president’s budget also


proposes raising about $40 bil- lion in taxes fromthe oil and gas industry and improving enforce-


ment of tax laws by making sure taxpayers actually pay what they owe. The proposals could divide


corporate America. IBMsaid this summer it is more concerned about paying higher taxes than losing research tax credits.Other companies have expressed strong support for more tax benefits for research and devel- opment. In spite of the risk of seeing


higher taxes, a group of corpora- tions including American Ex- press, GE and Bank of America sent a letter in August to Senate Majority Leader Harry M. Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) reinforcing their support for such tax credits. yangjl@washpost.com


montgomeryl@washpost.com


Staff writer Paul Kane contributed to this report.


EZ SU


Economy & Business A15


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