Obama to Congress: Tax rich Americans to pay for $447B jobs-creation bill

Obama to Congress: Tax rich Americans  to pay for $447B jobs-creation bill

President Obama demanded on Monday that Congress pay for his $447 billion jobs bill with higher taxes on the rich and businesses.

The tax proposals, which have all previously been advocated by Obama, underline the White House’s political agenda for the fall, which increasingly is focused on setting up congressional Republicans as foils on the economy during the 2012 presidential race.


Few, if any, of the proposed tax hikes have any chance of being approved by the Republican-held House, but they all could help the White House frame the GOP as protecting Wall Street money mangers and corporate interests at the expense of the middle class.

At the same time, the attacks on the rich open Obama up to new charges of class warfare, not only from Congress, but from the Republicans campaigning to replace him.

“The president is asking Congress to make choices,” White House press secretary Jay Carney said at his briefing, where Office of Management and Budget Director Jack LewJacob (Jack) Joseph LewThe Hill's Morning Report - Biden argues for legislative patience, urgent action amid crisis On The Money: Senate confirms Yellen as first female Treasury secretary | Biden says he's open to tighter income limits for stimulus checks | Administration will look to expedite getting Tubman on bill Sorry Mr. Jackson, Tubman on the is real MORE laid out $467 billion in higher taxes.

Obama did not mention any of the tax hikes in his own appearance Monday at the Rose Garden, where he implored Congress to approve the jobs bill he presented last week.

“This is a bill that will put people back to work all across the country,” Obama said, holding up the bill while surrounded by teachers, construction workers and first responders he said would be helped by it.

“This is the bill that will help our economy in a moment of national crisis,” he continued. “No games. No politics. No delays. I’m sending this bill to Congress today, and they ought to pass it immediately.”

The chief provision announced by Lew would limit itemized deductions for individuals who make more than $200,000 a year and families that make more than $250,000. Lew said the proposal, previously included in White House budget proposals, would raise about $400 billion, a higher estimate than the administration has previously offered for the provision.

The White House also targeted hedge fund managers, owners of corporate jets and oil and gas companies for higher taxes.

All have previously been targeted for higher taxes by the White House, but many of the provisions will be difficult to move in Congress.

For example, Obama would tax the income investment fund managers make, known as “carried interest,” as regular income instead of as capital gains.

But not all Democrats are on the same page on whether to scrap the carried interest exemption, which allows hedge fund managers and private equity investors to be taxed at a 15 percent rate even if they make millions for this income.

Some in the party have argued that the exemption needs to be ended as a simple matter of fairness. But Reps. Jared Polis (D-Colo.) and Mike Quigley (D-Ill.) have argued that getting rid of the exemption would hurt the real estate market and other parts of the economy, not to mention stifle entrepreneurship.

The administration estimates the capital gains change would provide $18 billion in revenue.

The administration also wants to eliminate tax breaks for the oil-and-gas sector, which would raise $40 billion, the administration said. Another $3 billion would come from changing the way corporate jets depreciate.

Republicans quickly labeled the proposals a political move, pointing out the proposal on itemized deductions had run into resistance even during the last Congress, when Democrats held large majorities in both chambers.

“It would be fair to say this tax increase on job creators is the kind of proposal both parties have opposed in the past,” Michael Steel, a spokesman for House Speaker John BoehnerJohn Andrew BoehnerLobbying world A new kind of hero? Last week's emotional TV may be a sign GOP up in arms over Cheney, Kinzinger MORE (R-Ohio), said in a statement. “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.”

Even before making his jobs proposal last week, Obama had been arguing Congress was acting as an impediment to economic growth. The effort is intended to bolster the president’s case for another four years in office at a time when his poll numbers have plummeted on worries over the economy.

During his address to a joint session of Congress last week, the president implored lawmakers to move his package of tax breaks, unemployment benefits and infrastructure spending, a theme he continued in an appearance Friday in the home district of House Majority Leader Eric CantorEric Ivan CantorBottom line Virginia GOP candidates for governor gear up for convention Cantor: 'Level of craziness' in Washington has increased 'on both sides' MORE (R-Va.).

He is scheduled to visit Ohio and North Carolina this week, which, like Virginia, are states he carried in the 2008 presidential election.

Though the White House on Monday spelled out how it would pay for these proposals, it will be the job of a deficit supercommittee set up under the debt-ceiling deal to actually do so.

Obama next Monday is to formally unveil his recommendations to the supercommittee, and Carney said the president will challenge its members to “overachieve” and cut more than the $1.2 trillion over 10 years they are required to find.

The White House dug in on its refusal to say how many jobs the package would create, pointing instead to an estimate from Moody’s that said the bill would create about 1.9 million.

After months of being reminded by Republicans that the 2009 stimulus did not cut unemployment, which is now at about 9 percent, Lew said he thinks it is “dangerous to ever predict unemployment rates.”

Bernie Becker contributed.