Obama to Back More Business Tax Breaks 09/07 12:26

   President Barack Obama will call on Congress to pass new tax breaks that 
would allow businesses to write off 100 percent of their new capital 
investments through 2011, the latest in a series of proposals the White House 
is rolling out in hopes of showing action on the economy ahead of the November 
elections.

   WASHINGTON (AP) -- President Barack Obama will call on Congress to pass new 
tax breaks that would allow businesses to write off 100 percent of their new 
capital investments through 2011, the latest in a series of proposals the White 
House is rolling out in hopes of showing action on the economy ahead of the 
November elections.

   An administration official said the tax breaks would save businesses $200 
billion over two years, allowing companies to have more cash on hand. The 
president will outline the proposal during a speech on the economy in Cleveland 
Wednesday.

   Amid an uptick in unemployment to 9.6 percent, and polls showing that the 
November election could be dismal for Democrats, Obama has promised to propose 
new steps to stimulate the economy. In addition to the business investment tax 
breaks, he will also call for a $50 billion infrastructure investment and a 
permanent expansion of research and development tax credits for companies.

   The proposals would require congressional approval, which is highly 
uncertain given Washington's partisan atmosphere and the approaching midterm 
elections --- a reality that's not lost on the White House.

   "We understand what season we've entered in Washington," White House 
spokesman Robert Gibbs said Tuesday. "We certainly hope that there are 
measures, including some of the ones that the president will outline, that 
Congress will consider. If they don't do that prior to the election, the 
president and the economic team still believe that these represent some very 
important ideas."

   Republicans were quick to attack the president's proposals for missing the 
mark.

   "The White House is missing the big picture. None of its plans address the 
two big problems that are hurting our economy: excessive government spending, 
and the uncertainty that their policies....are creating for small businesses," 
House Minority Leader John Boehner said.

   With the public growing increasingly concerned about the mounting federal 
deficit, the White House has been careful to avoid labeling their proposals as 
a stimulus program, hoping to avoid drawing comparisons to the massive $814 
billion stimulus Obama signed last year.

   "I don't think this is anything near the level of what was enacted near the 
beginning of the administration," Gibbs said.

   Even if legislators could pass some of the proposals in the short window 
between their return to Capitol Hill in mid-September and the elections, it's 
unlikely the efforts would significantly stimulate the economy by November.

   The tax breaks for capital investments Obama is proposing would build on 
stimulus measures enacted in 2008 and 2009 that allowed businesses to 
depreciate 50 percent of their capital investments. A separate small business 
bill the White House is urging the Senate to pass would extend that tax break 
through the end of this year.

   If Congress passes the administration's proposal to expand the tax breaks to 
100 percent, several million people and 1.5 million businesses would benefit, 
said the administration official, who spoke on the condition of anonymity 
because the formal announcement has not been made.

   The official estimated the ultimate cost to taxpayers over 10 years would be 
$30 billion, with most of the money lost in tax revenue being recouped as the 
economy strengthens.


(KA)