Obama: Can Cut Corporate Tax If Loopholes Closed

President Barack Obama said it would be possible to lower the rate on corporate taxes if the many loopholes in the tax code were closed.

"If you closed loopholes you could actually lower rates. That's an area where there should be the potential for some bipartisan agreement," Obama said at a White House "Fiscal Responsibility Summit." He said that the tax rate "on the books" was high in the United States.

But Obama added, "In practice, depending on who it is—what kind of accountant you can hire —they're not so high. That's an area we can work on," Obama added.

AP

And Obama pledged Monday to cut the ballooning U.S. budget deficit by half in the next four years and said the country would face another economic crisis if it did not address its debt problems soon.

Calling for fiscal restraint even while federal spending soars, Obama pledged to dramatically slash the annual budget deficit and announced $15 billion in Medicaid money to states from his $787 billion economic stimulus package.

"If we confront this crisis without also confronting the deficits that helped cause it, we risk sinking into another crisis down the road," Obama said at the opening of Monday's White House summit.

By Obama's own account, the new stimulus bill will add to this fiscal year's deficit, which the administration projects will be $1.5 trillion. Obama said he will at least cut that in half by the end of his first term 2013.

Obama will unveil his budget on Thursday and will set out big goals: to rescue the economy from freefall, expand U.S. health care coverage and move within a few years to slash huge deficits.

Obama needs to reassure markets he has a responsible attitude toward the deficit and wants to show fiscal discipline that will keep interest rates down and the economy in shape.

The Dow Jones industrial average fell to an 11-year low on Monday as investors dumped shares on uncertainty about the latest potential U.S. government action to shore up beleaguered banks.

Although his administration has focused its energies almost entirely on pulling the United States out of recession and addressing the financial sector problems that sparked it, Obama also wants to make good on campaign promises such as extending health care benefits to uninsured Americans and fighting climate change.

Health Care An Economic Opportunity

His budget director, Peter Orszag, said reducing healthcare costs was critical to assuaging U.S. economic ills. "The single most important thing we can do to put the nation back on a sustainable (fiscal) course is slow healthcare costs," he said.

Vice President Joe Biden underscored Obama's push to boost the country's fiscal position, saying the economic crisis should not overshadow necessary fiscal changes. "We want to be clear: as we take the steps that we must to get through the crisis that we're in now, we will not lose sight of the long-term," Biden told the same gathering.

"We will not lose sight of the need to tackle unmet needs for health care reform, to deal with the energy policy that we need and so many other challenges that are going to determine what the 21st century looks like," Biden said.

Obama invited lawmakers from both parties, business people, union leaders and budget experts to Monday's fiscal summit to discuss ways to deal with long-term issues including health care, entitlement programs and federal contracting in areas such as defense.

Prominent Republicans including House Minority Leader John Boehner and Arizona Senator John McCain, Obama's rival in last year's presidential campaign, attended.

Boehner and other Republicans, who have lambasted the president's stimulus package, called on Monday for a federal spending freeze.

"President Obama has called for both parties to get serious about fiscal responsibility," Boehner said in a statement. "With our budget deficit potentially reaching $3 trillion this year, Republicans stand ready to work with him, and we believe we should start right now." "We cannot and will not sustain deficits like these without end.

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