With Possible Shutdown Nearing, Obama Looks to Take Budget Fight to G.O.P.

With Possible Shutdown Nearing, Obama Looks to Take Budget Fight to G.O.P.

By DAVID M. HERSZENHORN and JULIE HIRSCHFELD DAVISSEPT. 16, 2015

WASHINGTON — Congress hurtled toward a government shutdown on Tuesday, with Republicans threatening to block a budget deal if it includes financing for Planned Parenthood, as President Obama prepared to join the fight by pushing Republicans to scrap a multibillion-dollar tax advantage for private equity managers.

In a speech on Wednesday, Mr. Obama is expected to call on Republicans to end the tax break and use the funds to pay for spending increases on domestic and national security programs, and he will enlist business leaders to help him make his case.

In a session at the Business Roundtable in Washington, Mr. Obama will seek to shame Republicans who control Congress for failing to strike a deal with Democrats to fund the government’s operations, using the so-called carried-interest provision as an example of what he argues are misplaced priorities, according to White House officials.Congress returns from summer recess on Tuesday with just 12 legislative days to avoid a government shutdown.

President Obama called the Iran vote on Thursday “a victory for diplomacy, for American national security, and for the safety and security of the world.”
Democrats Hand Victory to Obama on Iran Nuclear DealSEPT. 10, 2015
Anti-abortion protesters gathered outside a Planned Parenthood clinic in Vista, Calif., this month.

The tax break is one that the president has repeatedly proposed eliminating, and it is a favorite bête noire of Democrats condemning income inequality. Its repeal has little chance of passing a divided Congress, but it has gained new political potency in recent days, with two Republican presidential candidates, Donald J. Trump and Jeb Bush, endorsing it.

Speaker John A. Boehner at a news conference on Capitol Hill this month. Mr. Boehner is again confronted with a rank-and-file uprising by Republican lawmakers who want to end financing of Planned Parenthood. Credit Saul Loeb/Agence France-Presse — Getty Images

Mr. Obama will call the proposal “one area of common ground,” a White House official said, speaking on the condition of anonymity to preview the remarks, that can pay for government programs and promote economic growth.

The carried-interest change would treat the profits that fund managers earn from investing money like ordinary income, which is taxed at a top rate of 39.6 percent, rather than as capital gains, which are subject to a rate of no more than 23.8 percent. It would raise about $18 billion over a decade, according to the Treasury Department.

But the larger fight is likely to be over the funding of Planned Parenthood. Speaker John A. Boehner is again confronted with a rank-and-file uprising by lawmakers who want to end financing of the group despite pledges by him and Senator Mitch McConnell, the majority leader, to avoid a government shutdown.

In the Senate on Tuesday, the skirmishing over the budget took a back seat to continued fighting over Mr. Obama’s nuclear deal with Iran. Senate Republicans forced another vote on a resolution rejecting the accord, a move that Democrats again blocked as they accused Republicans of wasting time.

Far from giving up, Mr. McConnell announced plans to force a vote on an amendment that would bar Mr. Obama from lifting economic sanctions against Iran unless Iran released American prisoners being held in Iran and recognized Israel as a state. Republican aides said that vote could take place Thursday morning.

Mr. McConnell said last week that he supported a broad agreement that would keep the government funded for several months — a position that the Senate Democratic leader, Harry Reid of Nevada, endorsed Tuesday.

“The Republican leader and I disagree on many things, but I was very glad, glad to hear the Republican leader say last week that he believes any government funding bill must be clean,” Mr. Reid said in a speech on the Senate floor.

“I agree that any budget deal must be clean, that is, no riders,” Mr. Reid continued, “nothing with Planned Parenthood, nothing with repealing what the Environmental Protection Agency has done, no repealing what the Dodd-Frank bill put into effect to stop us from having another Wall Street meltdown, no riders dealing with immigration.”

Mr. Boehner has been more hesitant but also said that he was working to avoid a shutdown.

Asked at a news conference last week if he could guarantee there would be no shutdown over Planned Parenthood, Mr. Boehner replied: “Listen, the goal here is not to shut down the government. The goal is to stop these horrific practices of organizations selling baby parts.”

Mr. Boehner has long been a fierce opponent of abortion rights. And privately, his leadership team has been warning House Republicans that they could risk causing severe political damage to abortion opponents if they force a shutdown over the issue.

Planned Parenthood is not the only potential pitfall as the clock ticks toward the end of the fiscal year on Sept. 30. Some Democrats are demanding a reversal of spending cuts that were agreed to in previous years’ battles — a position that will certainly meet fierce Republican resistance.

Until this week, the White House had not maneuvered aggressively in the budget fight.

But embedded in Mr. Obama’s message on Wednesday is a defense of his own economic record and a rebuke of Republicans.

Seven years after the financial meltdown that he has spent much of his time in office addressing, the president will say, Republicans are engineering another fiscal crisis with potentially disastrous consequences.

Some congressional Democrats voiced pessimism that a shutdown could be avoided, given past fights, particularly in 2013, when the government was shut for 16 days in a battle over Mr. Obama’s health care law.

“First Republicans shut down our government because they despised the Affordable Care Act,” said Representative Xavier Becerra of California, a member of the House Democratic leadership. “Then they tried to shut down the U.S. Department of Homeland Security. Now it’s Planned Parenthood.”

He added: “Every day, 3,000 of our wives, mothers, daughters and sisters count on Planned Parenthood for lifesaving cancer screenings. Why should women in America lose their essential health care simply because Speaker John Boehner can’t control his Tea Party Republicans?”

Planned Parenthood funding was the subject of a lengthy and emotional discussion among House Republicans last week, in which Mr. Boehner endorsed pursuing legislation separate from the larger budget fight.

According to one Republican official who was in the room, Mr. Boehner expressed support for legislation that would limit Planned Parenthood’s activities and allow criminal prosecutions in some cases of late-term abortions. He also backed a separate bill ending government financing for Planned Parenthood.

Some Republicans have expressed concern that two of their colleagues most aggressively pushing for a budget fight over Planned Parenthood, Representatives Jim Jordan of Ohio and Mark Meadows of North Carolina, were also strong advocates of shutting down the government in 2013 over the health care law. That shutdown was ultimately viewed by most Republicans as a strategic mistake.

Carl Hulse contributed reporting.

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