President Barack Obama attacked companies that use cross-bordermergers to escape U.S. taxes, accusing them of being “corporatedeserters who renounce their citizenship to shield profits.”

In remarks at a technical college in Los Angeles yesterday, thepresident called for a new “economic patriotism” from companies. Healso decried those that use corporate inversions to benefiteconomically by being in the U.S. while adding to the tax burden ofmiddle-income families.

“You shouldn't get to call yourself an American company onlywhen you want a handout from American taxpayers,” he told anaudience gathered between palm trees on the campus green.

While dealing with multiple foreign policy crises and a sloweconomic recovery, Obama is turning to a populist economic messageto help Democrats in the November congressional elections, blamingRepublicans for obstructing progress.

There's little chance Obama will get Congress to act quickly onthe inversion issue. Republicans, who favor addressing the matteras part of a revamp of the U.S. tax code, can block any suchlegislation in the Democratic-controlled Senate and can keep itfrom even coming up in the House, where they are the majorityparty.

Senate Democrats, including Charles Schumer of New York, saidtoday that they don't expect to act on the issue before Congressleaves at the end of next week for a month-long recess. SomeDemocrats on the Senate Finance Committee, including Mark Warner ofVirginia and Robert Casey of Pennsylvania, have declined to endorseObama's approach. Instead, they say they prefer a broader revamp ofthe tax code.

Republicans blame Obama for the stalemate on taxes, saying hehasn't done enough to negotiate with them.

“Until the White House endorses our tax reform plan or convincesSenate Democrats to act, every pink slip from companies movingoverseas may as well be signed, 'President Barack H. Obama,'” HouseSpeaker John Boehner's spokesman, Michael Steel, said in ane-mail.

Boehner, an Ohio Republican, hasn't endorsed his party's taxplan beyond generalities, and the draft from Ways and MeansChairman Dave Camp of Michigan has languished since it was releasedearlier this year.

In an interview with CNBC recorded before he spoke at thecollege, Obama rejected criticism that he's not put effort intopushing a reworking of the tax code. He said he continues tosupport lowering corporate tax rates while closing loopholes.

Blaming Congress

“We reached out repeatedly,” he told CNBC. “The reason it's notgetting done right now is that Congress, as you may have noticed,is just not real productive.”

About 41 U.S. companies have switched their addresses to low-taxnations such as Ireland since 1982, often through a takeover of asmaller company, reducing their tax bills while typically keepingtheir executives and listings in the U.S.

Eight more such moves are pending, including byMinneapolis-based Medtronic Inc. and Canonsburg, Pennsylvania-basedMylan Inc.

Pfizer Inc., based in New York, attempted to move its taxaddress to the U.K. by purchasing London-based AstraZeneca Plc. Thecompany's effort was rebuffed.

Giants including Walgreen Co. and Monsanto Co. have flirted withthe idea, and more may do so amid no sign that Congress will actquickly on legislation to stop them.

“I don't care if it's legal, it's wrong,” Obama said. “It sticksyou for the tab to make up for what they're stashing offshore.”

The quickening pace of inversions prompted the White House tointensify its calls for action, administration officials said. Lastweek, Treasury Secretary Jacob J. Lew called for a “new sense ofeconomic patriotism,” asking Congress to pass tax changes. TheTreasury has said that blocking inversions would prevent $17billion from escaping the U.S. tax system over the next decade.

The administration's plan, which was included in its budgetreleased earlier this year, would effectively prevent U.S.companies from taking advantage of inversions through purchasingsmaller foreign businesses. The curbs would be retroactive to Mayof this year, a proposal the administration says will encouragecompanies to reevaluate pending mergers.

Election Politics

“This Democratic push on inversions is entirely about midtermelection politics,” Guggenheim Securities LLC said in a marketcommentary to clients today. “There is likely to be a lot of noiseas Democrats believe this issue will resonate with voters in themidterm elections.”

According to a Gallup poll conducted in April, 66 percent ofAmericans say corporations are paying too little in taxes, comparedwith 20 percent who say they are paying their fair share and 8percent who say they are paying too much.

Camp's plan for the broader reworking of the tax code hasn'tadvanced in Congress in part because of Republican concerns aboutpolitically unpopular votes it would require and in part, partymembers say, because Obama hasn't engaged deeply enough in theissue.

“He's not been a willing participant,” Representative CharlesBoustany, a Louisiana Republican, told reporters yesterday.“There's no easy fix for this. Tax reform is the answer.”

The Senate yesterday advanced a Democratic bill that would denycompanies federal tax deductions for the physical cost of movingoperations abroad and provide them with a tax credit for movingoperations into the U.S. The legislation, backed by theadministration, doesn't address inversions. Rather, it would denycompanies deductions for what are typically ordinary businessexpenses.

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