President Obama's post-election press conference confirmed the premise of my Monday column. The column began: " The new Congress hasn't even been elected yet, but it's already under pressure to add billions of dollars in new government spending to pay for 'infrastructure.'"
From the transcript of the Obama Wednesday afternoon press conference:
I look forward to Republicans putting forward their governing agenda. I will offer my ideas on areas where I think we can move together to respond to people's economic needs.
So, just take one example. We all agree on the need to create more jobs that pay well. Traditionally, both parties have been for creating jobs rebuilding our infrastructure -- our roads, bridges, ports, waterways. I think we can hone in on a way to pay for it through tax reform that closes loopholes and makes it more attractive for companies to create jobs here in the United States. ..
I do think there are going to be areas where we do agree -- on infrastructure...
I want to just see what works. And there are some things like rebuilding our infrastructure or early childhood education that we know works...On repatriation, I said in my opening remarks that there is an opportunity for us to do a tax reform package that is good for business, good for jobs, and can potentially finance infrastructure development here in the United States.
Now, the devil is in the details. So I think, conceptually, it's something where we may have some overlap, and I'm very interested in pursuing ideas that can put folks to work right now on roads and bridges and waterways and ports, and a better air traffic control system. If we had one, by the way, we would reduce delays by about 30 percent. We could reduce fuel costs for airlines by about 30 percent. And hopefully that would translate into cheaper airline tickets, which I know everybody would be interested in.
So there's all kind of work we can do on our infrastructure. This may be one mechanism that Republicans are comfortable in financing those kinds of efforts. So that will be part of the discussion that I think we're prepared for on Friday and then in the weeks to come leading into the new Congress....
And from a post-election column by the American Enterprise Institute's James Pethokoukis on "3 Deals Obama and the GOP Should Make":
Work together to create good-paying jobs through the public investment Democrats want and the business tax reform Republicans want. According to a Third Way proposal, Democrats could boost spending on public investments — including infrastructure and worker-training programs — by $400 billion over 10 years, creating jobs on all these projects. Meanwhile Republicans could cut the uncompetitive US corporate tax rate — the highest among advanced economies — from 35% to 31%, allowing businesses to hire more freely.
This would also require Democrats to find savings in mandatory spending programs, and Republicans to limit itemized deductions to $50,000 for couples making over $250,000.
For reasons I partly explain in the column, I think this would be a bad deal for Republicans and for taxpayers. Obama has already proposed lowering the corporate tax rate to 28%. Republicans shouldn't have to bribe him with pork-barrel spending or negotiate the rate upward to 31%, much less further raise the tax burden on "couples making over $250,000," just to get him to do something that's correct, policy-wise, and that he's already endorsed. Republicans can handle this, if they want, by splitting the deal into two parts. Put the corporate tax cut and repatriation in one bill, pass it through the Republican Congress, and let President Obama veto it if he dares to, violating his own campaign promise and damaging America's international competitiveness. And if Democrats want to propose a bill to increase spending by $400 billion over 10 years for "roads and bridges and waterways and ports," let the Democrats propose it, along with a way to pay for it, and let the Republicans vote it down.