Is the White House Mulling Another Olive Branch to Business?
Democrats are trying to make nice with business leaders in anticipation of the fiscal cliff, according to Sen. Chuck Schumer, D-N.Y., who told reporters Thursday morning that he expects the White House to "reach out to the business community" shortly in order to build support for a deficit reduction deal.
The remarks came as post-election worries over the fiscal cliff combined with concerns over Europe to rattle the stock market, pushing equity prices lower for a second day in a row.
The Obama administration has had a rocky relationship with Wall Street, but business owners have repeatedly voiced concern over the looming package of tax increases and spending cuts, with some signaling they would be open to higher taxes as long as certainty is restored to the markets.
The support of high-profile business leaders could help Democrats in the upcoming negotiations over taxes and the budget. Democrats want to allow the Bush-era tax cuts on upper-income Americans to lapse. Republicans are zeroing in on the tax stance to try to paint Democrats as anti-business, saying raising taxes on Americans in upper-income brackets would hit small business owners.
Schumer lauded House Speaker John Boehner, R-Ohio, for signaling new flexibility on revenues yesterday.
"The speaker is going to need some help in bringing his colleagues [on board] to a good position on revenues," Schumer said, "and I am very hopeful that that help will come from the business community."
Democrats want the rate on upper-income earners to return to 39.6 percent from the 35 percent implemented with the Bush-era tax cuts, set to expire as part of the cliff. Schumer said he'd spoken with "five or six business leaders over the last few weeks" and that nearly all of them said they would be O.K. with tax reform that did not lower their income tax rates as long as reform helped lessen the deficit.
'We're even willing to see them go up to 39.6,'" Schumer said they told him, "provided - and it's a big proviso - that it's part of a real deficit reduction package that voids the fiscal cliff. And so I hope that they'll step up to the plate."
Schumer was optimistic about the prospect of a deal. And while welcoming Boehner's comments, he acknowledged they did not indicate a huge shift.
"You can't expect the speaker to turn on a dime in 24 hours and embrace everything," Schumer said. "But I think that privately he's seen the handwriting on the wall, and it makes me very hopeful that we can do something big in the next month and a half. It's a good first step."
Schumer also signaled that he would prefer to extend the payroll tax cut - a temporary cut that everyone seems to have a different opinion on - because "there needs to be some kind of stimulus" in a still-fragile economy.