U.S. home prices continue to surge. The Standard & Poor’s/Case-Shiller index out today shows a 12 percent increase in May compared to a year ago.
Low interest rates and an improving job market are boosting demand for homes and driving prices up.
President Obama is out with a plan that he says will improve the job market even more. The president is touring an Amazon distribution center in Chattanooga, Tenn. to announce a so-called “grand bargain” to overhaul the corporate tax system.
JEREMY HOBSON, HOST:
From NPR and WBUR Boston, I'm Jeremy Hobson. It's HERE AND NOW. In business news today, home prices continue to surge. The Standard & Poor's/Case-Shiller housing index out today shows a 12 percent increase in May in many cities compared with a year ago. Low interest rates and an improving job market are helping to boost demand and drive up prices. Meanwhile, President Obama is out with a plan today that he says will improve the job market. And Jason Bellini of the Wall Street Journal joins us with more on that. Jason, welcome back.
JASON BELLINI: Thanks, Jeremy.
HOBSON: So the president is in Chattanooga today. He's touring an Amazon distribution center there to announce a so-called grand bargain - we've heard those words before - to overhaul the corporate tax system. What's he talking about?
BELLINI: That's right, a grand bargain overhauling the corporate tax system. The deal would be one where they'd reduce the taxes that corporations pay. And Republicans have been calling for this. Many Democrats have been saying that we're not competitive enough because the corporate tax is so high. And they've also agreed that, you know, if they can reduce the corporate tax rate from, you know, Obama said in the past, from 35 to 28 percent and we cut the rate on manufacturing to around 25 percent, they could also perhaps offset some of that lost revenue by tax break, by getting rid of some of tax breaks and loopholes.
Now, the president also wants to facilitate bringing home the piles of cash that U.S. companies have been hoarding overseas - they've been hoarding it there to avoid paying tax on it - and give them this limited window of opportunity to bring that money home and pay a lower tax rate on it.
HOBSON: And what does he want from Republicans in return for this concession?
BELLINI: Well, here's how it works. This one-time tax break would create a huge one-time tax windfall for the U.S. Treasury. And in exchange for this, the president wants a guarantee that the money will be used to fund his job creation proposals, including infrastructure projects like roads and bridges, other projects to boost employment, including, you know, help for manufacturing and worker training. In the past, Obama has proposed $50 billion in such spending. Now, the administration hasn't said yet how much money exactly would be coming back as a result of this tax break for companies bringing their money back if it were to be adopted by Congress.
HOBSON: And is this likely to go anywhere? I mean, the president has had a lot of proposals on the economy that Republicans have not been into at all.
BELLINI: Well, early signs are that the Republicans aren't so into it, and it could really be a tough sell because Republicans reject the notion of using new revenue for new federal spending. Senator McConnell of Kentucky said today that this plan could hurt small businesses that file taxes as individuals, and he's calling the president to consult with Congress before moving any further on this. And the president's going to be up on the Hill tomorrow. But he's going to be - probably get a tepid response from Republicans who just aren't thrilled with the notion of using more tax revenue to support new programs. They think that that money, if there is that windfall, should be used to help offset the money that they would be, you know, losing by lowering the tax rate.
HOBSON: Jason, I can't let you go without asking you about something else that happened today in your city, New York City, an appeals court today ruled that the city health board overstepped its power when it banned those supersized sugary drinks. How are New Yorkers reacting to all this?
BELLINI: Well, I can tell you that the owners of movie theater chains, they're pretty thrilled about it because they were making this about personal freedom. And so they're quite happy to see this plan of the mayor, on his way out, going away and it doesn't sound like there's anyone else who's going to take office who will be supporting it in the same way. And, you know, New Yorkers themselves, you know, it's been, you know, a hot debate topic, but many people, you know, like some of these other measures to improve health but, you know, it's really a mixed bag of feelings here on that issue.
HOBSON: Maybe a welcome distraction from some of the other things going on in the city - in city politics right now. We'll leave it at that.
BELLINI: It's been hot here so people want drinks.
HOBSON: Exactly. Jason Bellini of The Wall Street Journal, thanks as always.
HOBSON: Back in a minute, HERE AND NOW. Transcript provided by NPR, Copyright NPR.