President Obama called on business executives to lobby congressional Republicans to cut a deal on spending and avert a government shutdown, presenting it as a matter of stability for their businesses.
“If we don’t reverse the cuts that are currently in place, a lot of the drivers of growth that your companies rely on … they are going to be reduced, effectively at a time when other countries around the world are racing to get ahead of us,” Obama said at a quarterly meeting of the Business Roundtable, a group of big business CEOs, in Washington Wednesday.
“I hope you’ll talk to your friends in Congress, Republicans and Democrats alike, as Congress flirts with another shutdown,” Obama said.
Congress faces a Sept. 30 deadline to pass legislation funding the government.
Obama reiterated Wednesday that he would block GOP efforts to keep caps limiting spending in place or to attach “ideological” provisions to must-pass spending bills. Republicans have discussed adding legislation defunding Planned Parenthood or accomplishing other goals to the funding bills.
Instead, Obama wants to raise the caps on defense and non-defense spending appropriated by Congress by equal amounts, with no significant policy riders attached.
One way to offset such spending, he suggested Thursday, would be to close the “loophole” in taxation on capital gains accrued by private equity firms managing clients’ money.
In recent weeks, two Republican presidential candidates, businessman and reality TV star Donald Trump and former Florida Gov. Jeb Bush, have also proposed eliminating the tax provision, commonly known as the “carried interest” loophole. Those proposals were interpreted by many financial analysts as populist gestures. Bush also would significantly lower the income tax rate, making it less advantageous for private equity managers’ income to be taxed at the capital gains rate.
Obama said the tax provision is “not justifiable” and that closing it would allow the government to spend more on job training programs or college aid.
“This is an example of how we can maintain fiscal responsibility while at the same time making the investments we need to grow,” Obama told the Business Roundtable.
The group on Tuesday expressed concern about the uncertainty caused by the budget debate, along with looming questions about tax policy and other matters.
Obama told the executives to lean on GOP members, with whom they are often more closely aligned than with the Obama administration.
“You still have influence on at least some of those folks,” Obama said. “And challenge them: Why wouldn’t we do things that everybody knows make sense?”
