Obama plan poor substitute for growth: Boehner

Sep 15, 2011, 6:43 p.m.
Speaker of the House John Boehner addresses the Economic Club in Washington September 15, 2011. REUTERS/Kevin Lamarque

By Andy Sullivan

WASHINGTON (Reuters) - The top Republican in Congress on Thursday dismissed President Barack Obama's jobs-creation package as a "poor substitute" for policies that would boost the economy and ruled out tax increases as a way to close the country's budget gap.

House of Representatives Speaker John Boehner, in high-profile speech, called on a special congressional "super committee" to consider tax reforms that would close loopholes but not raise rates -- or tax revenues -- as part of its bid to cut the U.S. deficit.

Boehner's address to the Economic Club of Washington was a comprehensive statement of Republican economic principles as Congress works to bring down the stubbornly high 9.1 percent unemployment rate and tame the national debt.

Republicans already have said they do not support many elements of Obama's $447 billion jobs package and will not back the tax increases he has proposed to pay for it.

Boehner's comments indicated the bill is unlikely to emerge from Congress in anything like its current form.

Obama said later on Thursday he would keep pressing Congress to pass his jobs act, noting estimates that it would add as much as 2 percentage points to GDP and add as many as 1.5 million jobs.

"My hope is that we are going to keep seeing some governance out of Washington over the next several months because the American people can't afford to wait for an election to actually see us start doing something serious about jobs," he told donors at a Washington fundraiser for his 2012 re-election campaign.

Even as Boehner said there were some opportunities for common ground, he indirectly criticized the temporary tax breaks that other senior Republicans had said they might support.

Boehner attacked "short-term gimmicks" and said a proposed tax credit for businesses that hire new workers would have little impact if employers were worried about other government policies. Washington's energies would be better channeled toward reducing regulations on business, he said.

"Let's be honest with ourselves. The president's proposals are a poor substitute for the pro-growth policies that are needed to remove barriers to job creation in America," Boehner said.

Boehner said the newly created "super committee" of congressional Democrats and Republicans should try to simplify the tax code in order to trim at least $1.2 trillion from annual budget deficits over 10 years.

But that overhaul should not bring more revenue to the government and the committee should focus only on spending cuts and benefit reforms to trim deficits, Boehner said.

The overhaul should yield a top rate of 25 percent for both income and personal taxes, Boehner said later on CNBC, down from their current level of 35 percent.


The committee must finish its work by November 23 and many budget experts say it would be hard pressed to finish a comprehensive rewrite of the tax code by then. But the panel could lay out the broad outlines of tax reform and instruct other lawmakers to fill in the details at a later date.

Republicans and Democrats broadly agree on the need to eliminate some of the loopholes and exemptions that cost the government about $1 trillion in lost revenue each year.

But they disagree about the details -- particularly how much the tax system would raise in revenue, and what the top income-tax rate should be.

In negotiations earlier this summer, Boehner proposed an overhaul that would raise about $36.2 trillion over 10 years -- about $800 billion more than if temporary tax breaks, including the income-tax cuts put in place under President George W. Bush, were kept in place.

Allowing those tax breaks to expire would raise about $3.9 trillion.

During the negotiations, Boehner aides said the extra revenue would come not from higher rates but from a healthier economy operating under a more efficient tax code.

"The Joint Select Committee has a huge opportunity," Boehner said of the deficit-cutting panel. "It has a chance to lay the foundation for economic growth by dealing with some of the obstacles that are standing in the way." (Additional reporting by Thomas Ferraro and Patricia Zengerle; Editing by Sandra Maler, Vicki Allen and Bill Trott)

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