House GOP rejects Obama jobs proposals

A July 15, 2011 file photo of Speaker of the House John Boehner (R-Ohio) and House Majority Leader Eric Cantor (R-Va.) during a news conference at the U.S. Capitol in Washington, D.C. Chip Somodevilla/Getty Images

WASHINGTON — House Republican leaders say they are rejecting President Barack Obama's jobs proposals to rebuild schools and blighted neighborhoods, and help keep state and local employees on the job.

In a memo to GOP lawmakers that was also issued publicly and reprinted in The New York Times, House Speaker John Boehner, House Majority Leader Eric Cantor, R-Va., and other Republican leaders also objected to the president's proposal for a temporary reduction in payroll taxes, in order to boost consumer spending and increase demand.

The GOP leaders say such a temporary reduction means taxes will go up later when the reduction expires in 2013.

"While employees would see an additional temporary benefit from this proposal in 2012," they wrote, "they would experience a larger effective tax increase 12 months later when the payroll tax reverted back to its full level.

"There may be significant unforeseen downsides to large temporary tax cuts immediately followed by large tax increases," they added.

Boehner and his GOP colleagues also say that Mr. Obama's move to tax the wealthy claiming itemized deductions will hurt churches and other nonprofits.

The memo says Mr. Obama's proposal to spend $50 billion to repair and improve infrastructure and to create a $10 billion national infrastructure bank is "adding more money to the same broken system," and is "more likely to produce waste and inefficiency than meaningful results."

The Republicans supported a proposal by Mr. Obama to delay a law requiring the U.S. government to withhold 3 percent of its payments to contractors for good and services as income tax. House Republicans call the withholding law "onerous," and want it repealed outright.

Boehner said he is willing to negotiate on extending payroll tax cuts for both workers and employers.

The memo also criticizes Mr. Obama's proposal for an additional $30 billion in spending to state and local governments. The Republicans say the 2009 stimulus bill - "under the guise of preventing the layoff of teachers, law enforcement officers, and other municipal employees" - was a band-aid approach that "masked over the true fiscal problems facing states and local governments."

[The White House Council of Economic Advisers reported that as of 2Q 2010 the stimulus preserved or created between 2.5 and 3.6 million jobs, as state and local governments suffered increased budgetary problem.]

They also restated their views that Mr. Obama's jobs bill has some elements that they like, such as tax cuts for small businesses, and passage of free trade agreements with Panama, Colombia and South Korea.

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