WASHINGTON — Less than two weeks after Republicans won control of Congress, acrimony over immigration is dampening hopes for cooperation on more ambitious initiatives, with President Barack Obama and Republican lawmakers bracing not for compromise, but for combat.
White House officials insist Obama remains interested in finding common ground when Republicans consolidate their hold on the Capitol in January, with an overhaul of federal tax laws at the top of everyone’s agenda.
Obama has been promising to cut the nation’s highest-in-the-world corporate tax rate for nearly three years. With a rash of companies moving abroad to escape U.S. taxes, many Republicans see action on that issue as critical to both the U.S. economy and their political fortunes in 2016, when more than 20 GOP senators will be up for re-election.
Instead of engaging with Republicans, however, lawmakers accuse Obama of provoking them on a range of issues, most explosively his threat to unilaterally halt deportations of millions of immigrants in the country illegally.
Instead of starting work on tax legislation that promises to be politically and substantively challenging under the best circumstances, Republicans were threatening another bitter partisan showdown that risks shutting down the government.
“I privately talk to senators, and they’re just baffled,” said Sen. Jeff Sessions, R-Ala., who is in line to become chairman of the Senate Budget Committee. “All the things that people were seriously upset with the administration about, it seems the president is doubling down on them.”
At a news conference in Myanmar, also known as Burma, Obama defended his pursuit of priorities on immigration and climate change, advising Republicans not to take things so personally.
“The fact that I disagree or Republicans disagree with me on a certain set of issues doesn’t preclude us working on areas where we do agree,” Obama said. “One thing that’s going to be important for us to have a successful partnership the next couple of years is not making disagreements on a single issue suddenly a deal-breaker on every issue.”
Still, even some Republicans who have been inclined to work with the White House were skeptical of the president’s approach.
“We need to start seeing White House proposals to accept or reject, rather than just listening to rhetoric about executive orders,” said Sen. Johnny Isakson, R-Ga., who last year helped persuade his colleagues to attend a series of informal meetings where Obama tried unsuccessfully to revive a big tax and spending deal.
Asked about the prospects for tax reform, Isakson said, “I’m not a gambler, but I wouldn’t bet on it.”
In addition to being a legacy-making achievement in its own right, tax reform could help grease the skids for must-pass deals that are looming large on the political calendar. The highway trust fund, for example, will run out of cash in the spring, and the federal debt limit will rear its head again sometime next summer.
After eight years in the minority, Senate Republicans find themselves with primary responsibility for solving both problems, which are likely to require uncomfortable votes to raise revenue and to authorize an increase in the nearly $18 trillion federal debt. A broad package to cut the corporate tax rate could help ease that pain.
The day after the election, incoming Senate Majority Leader Mitch McConnell of Kentucky suggested that trade policy and corporate tax reform were “two very significant areas of potential agreement” between the parties. This signaled a new willingness by the GOP to discuss corporate reform separate from an overhaul of the individual tax code, which the White House views as irresolvably contentious.
Rep. Chris Van Hollen, D-Md., the senior Democrat on the House Budget Committee, said the White House is “genuinely interested in having a dialogue on corporate tax reform.”
Still, senior tax aides, lobbyists and analysts in both parties said they have seen few signs that the administration is preparing to pounce on the opportunity.
