WASHINGTON Reuters Republicans in Congress showed little willingness to help President Barack Obama approve billions of dollars in measures to boost the economy with midterm elections less than two months away.
Obamas plans for hefty tax breaks for businesses are policies Republicans typically embrace, but the party has little motivation to give the Democratic White House a win with polls giving them strong hope of gaining seats in Congress -- possibly winning both houses in November.
Obama will announce his plans to stimulate the sagging U.S. economy in a speech on Wednesday in Cleveland.
He also hopes to aid consumers by extending Bush-era tax cuts for families earning less than $250,000, which are due to expire at the end of the year.
But the president will stick to his guns on insisting taxes go back up for wealthier Americans.
The New York Times, citing unnamed officials, said Obama would explicitly rule out a compromise on this issue during his remarks in Cleveland, holding to a line that White House spokesman Robert Gibbs insisted on Tuesday was never in doubt.
"The presidents viewpoint is that we cannot afford to extend the tax cuts for those making more than $250,000 a year," Gibbs told a regular White House news briefing.
Senate Republican leader Mitch McConnell said there was little appetite for new economic proposals from Obama, arguing that the $814 billion stimulus the president already pushed through Congress in early 2009 has not had the desired effect.
"After the administration pledged that a trillion dollars in borrowed stimulus money would create 4 million jobs and keep the unemployment rate under 8 percent, their latest plan for another stimulus should be met with justifiable skepticism," he said.
Obama needs support from Republicans, who are far outnumbered by Democrats in the current Congress but are nonetheless able to block legislation.
The Republicans hope to take the House of Representatives and perhaps even the Senate in the November 2 vote, which would put them in position to call the shots on any new economy-boosting initiative.
Even Obamas own Democrats held little hope of pushing new wide-ranging legislation through Congress to lift the economy.
REPUBLICAN OBSTRUCTIONISM
Steny Hoyer, the No. 2 Democrat in the House, said House Democratic leaders will "be looking at" Obamas initiative to add jobs through infrastructure projects. But he said it will be "very difficult to get a broad jobs agenda through" Congress, citing "Republican obstructionism."
With fellow Democrats facing punishment from recession-weary voters in November, Obama is under pressure to do more to create jobs and bring down the stubbornly high 9.6 percent unemployment rate, even as economists agree he has few good options left.
White House spokesman Robert Gibbs said officials there realize Congress has only weeks left to work before adjourning for the campaign trail ahead of November 2. He said Obamas plan "isnt about the next 60 days or the next 90 days," but rather is a long-term strategy for growth.
"In the end, this president and this administration will be graded on what happens at the end of this road, not some place in between," Gibbs said.
The Senate Banking Committee will hold a hearing September 21 on the need to invest in U.S. infrastructure, Committee Chairman Christopher Dodd said, in an attempt to get one of the Obama ideas onto the legislative agenda.
Obamas plans include a cut in business taxes worth $200 billion over two years, at an additional budget cost of $30 billion over 10 years.
The plans also seek a boost for infrastructure with an initial $50 billion investment, and increasing and permanently extending a tax credit for business research and development that would cost $100 billion over 10 years.
"These arent necessarily bad proposals, but they dont address the two big problems that are hurting our economy -- excessive government spending, and the uncertainty that Washington Democrats policies, especially their massive tax hike, are creating for small businesses," said House Republican leader John Boehner.
It was unclear what effect the plan would have on the large U.S. budget deficit.
Analysts say the new economic proposals direct government assistance to some of the strongest parts of the economy without solving the biggest problem: finding work for the 14.9 million unemployed.
QUESTIONS MARKS
Andrew Busch, a currency and public policy strategist at BMO Capital Markets in Chicago, said there were big question marks about how Obama intended to pay for them.
"If he chooses to take away a corporate tax break to pay for this proposal, the net gain is zero," he said. "This is likely why U.S. stocks are not seeing much of a bounce on the news."
Republicans said their main objective is for Congress to extend tax cuts enacted during the Bush administration which are set to expire this year. Party leaders are calling expiration of the cuts a tax hike.
Democrats want to extend the tax cuts for those making $250,000 a year or less, but Republicans want tax cuts for the wealthy to be retained as well.
Tax cuts should be extended for all Americans to help spur the economy, but even the middle-class cuts should end in two years, former U.S. budget director Peter Orszag said on Tuesday. Orszags views differed from those of his old boss, Obama.
Gibbs said the United States "cannot afford" to extend all the tax cuts.
Congress returns to session next week for a limited period of three to four weeks before lawmakers leave Washington for a final burst of elections campaigning.
Jim Manley, a spokesman for Senate Majority Leader Harry Reid, urged Republican help pass the new economic measures.
"We are continuing to work with the administration and others on how to proceed," said Manley. "But if we are going to get anything done, Republican cooperation, which has been all but nonexistent recently, will be necessary."
Additional reporting by Andy Sullivan, Kim Dixon, Richard Cowan, Ross Colvin and Caren Bohan; editing by Philip Barbara and Todd Eastham
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