Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Obama to propose another business tax cut

By Ed Henry, senior White House correspondent


WASHINGTON (CNN) -- In another move aimed at stabilizing the still-shaky economy, President Obama on Wednesday will introduce a new $200 billion tax cut giving businesses across the country an incentive to buy new equipment in the short term, according to a senior administration official.

The tax cut would allow businesses to write off 100% of new investments in plants and equipment made between now and the end of 2011, according to the senior administration official.

The new tax cut will be in addition to a $100 billion permanent extension of the business tax credit for research and development, as well as $50 billion in new infrastructure spending included in a package that the president will officially unveil Wednesday during an economic speech in Cleveland.

The $100 billion tax credit proposal was reported by CNN on Sunday while Obama himself disclosed the infrastructure spending Monday in a fiery speech at a Labor Day event in Milwaukee in which he tried to draw a sharp contrast with Republican economic plans.

"I don't want to give them the keys back," Obama said. "They don't know how to drive ... They're going to pop it into reverse and have special interests riding shotgun and we'd be right back in the ditch."

The leaks of a flurry of Obama proposals in just the last 36 hours show just how anxious White House officials are to show the president is on top of trying to rescue the still-faltering economy at a time when Democrats strategists are privately starting to panic that their majorities in both the House and Senate may now be up for grabs.

Altogether, the three new Obama proposals add up to $350 billion, which is starting to creep up to nearly half the size of the $787 billion stimulus plan the president pushed through Congress in the first 100 days of his administration.

A package of that size could call into question the insistence of top White House aides that they are not putting together a "second stimulus" package. The packaging of the proposals carries great political weight because if the new plan is seen as a new stimulus program it could give Republicans new ammunition that the first plan did not work as well as advertised.

Nevertheless, all three proposals face an uncertain fate in a Congress that is still out of session for its August recess and when it comes back to work next week will only be in session for a few weeks before the election.

In addition to the compressed calendar, the president has to contend with Republicans who are itching to deny him a last-minute victory, and Democrats who are racing to get home again to campaign full-time. To top of page

Search for Jobs

Index Last Change % Change
Dow 20,721.16 59.86 0.29%
Nasdaq 5,834.70 13.06 0.22%
S&P 500 2,353.50 5.05 0.22%
Treasuries 2.42 0.02 0.83%
Data as of 2:51pm ET
Company Price Change % Change
Bank of America Corp... 23.19 0.25 1.09%
Ford Motor Co 11.64 -0.13 -1.07%
Advanced Micro Devic... 13.96 -0.14 -0.99%
Chesapeake Energy Co... 5.15 0.15 3.00%
Micron Technology In... 26.36 0.30 1.13%
Data as of 2:36pm ET
Sponsors

Sections

Valeant paid CEO Joseph Papa $63 million last year despite investigations, billions of dollars of losses and a stock plunge of nearly 90%. More

If President Trump and the Republicans fail to push repeal-and-replace across the finish line, in either the House or the Senate, there will be implications for their tax reform agenda. More

The Federal Communications Commission voted Thursday to approve a proposed rule that would make it easier for phone companies to crack down on robocalls. More

Your credit score plays a major role in your personal finances. The better the score, the better it is for your wallet. Here's how to help get it above the 800 mark. More