President Obama proposes allowing companies to write off their investments in equipment. Obama seeks biz equipment write-off

President Barack Obama is stepping up his outreach to Big Business with a new proposal to allow companies to write off 100 percent of their investments in new plants and equipment through the end of next year, an administration official said Monday night.

Obama will lay out the proposal, which the White House says could be worth nearly $200 billion over two years, during a speech in Cleveland on Wednesday. The news caps a weekend of intensive activity by the White House to show that Obama is trying to tackle economic sluggishness head on.


On Monday Obama announced a plan to invest $50 billion in new roads and railways. Obama also is expected during his speech in Cleveland to ask Congress to permanently extend a tax credit, valued at close to $100 billion over 10 years, for businesses that conduct new research and development in the U.S.

It’s all part of an aggressive White House effort to both boost a struggling economy heading into a difficult midterm election — and, in the case of the investment credit, to reverse a long-standing perception that the administration is hostile to the interests of big corporations.

That sentiment, reflected in comments from chief executives such as Jeffrey Immelt of General Electric, set in following the long fights over health care and financial reform. Executives also say their regulatory burden has gone up dramatically under the current administration.

The White House strongly denies such charges but also has found itself fighting a two-front war on the economy, with both disgruntled voters and angry corporate executives — and now is taking steps to convince both that Obama is on the case.

The R&D proposal is not new — Obama has asked for it before — but the plants and equipment write-off is. The write-off is designed to convince companies to plow stockpiles of cash into big-ticket spending in the hopes of giving the economy a jolt, which is particularly important with skittish consumers on the sidelines. It was first reported by the Wall Street Journal.

The administration is expected to ask Congress to make the write-off retroactive to Sept. 8 in order to spur businesses to make investments right away.

The new write-off proposal is likely to be popular with tax-cutting Republicans and business groups, but it is unclear how it will be received by Democrats wary of adding to the deficit. The White House will also have a window of just a few weeks in September and early October to pass anything before members return home to campaign ahead of an election in which the Democrats' hold on the House, as well as possibly the Senate, is in serious jeopardy.