$ 2.25 trillion Biden plan squeezed by all sides of Congress (2)

President Joe Biden set out what he described as a “brave” plan to rebuild the US infrastructure, but it now requires equally ambitious efforts to challenge him through Congress in the face of Republican opposition and criticism within his Democratic Party.

In a speech in Pittsburgh on Wednesday, Biden cited the major public investments of the past – the transcontinental railroad, the highway system, and the space program – to sell his idea, $ 2.25 trillion for one over an eight-year period Series of projects. from strengthening the power grid to modernizing childcare facilities.

“This is not a plan that tinkers with the margins. It’s a one-time investment in America, ”said Biden. “It’s big, yes. It’s brave, yes. And we can do it. “

WATCH: Biden outlines his administration’s infrastructure plan, focused on supporting U.S. manufacturing, job creation, and eradicating inequality.

(Source: Bloomberg)

To illustrate the challenges Biden’s plan is facing by Congress, it was quickly criticized by Republicans who said they did not want any part of the corporate tax hike he is proposing to pay for it. Meanwhile, some progressive Democrats said it wasn’t spending nearly enough.

The competing pressures mean Biden’s proposal will likely have to be broken down into two or even three pieces of legislation, which can ultimately deviate significantly from the administration’s plan. Some parts need Republican support to get through the Senate, while other provisions may be included in accelerated budget bills that only require Democratic votes to pass.

Biden hoped to get at least some Republicans on board.

“The departments of the moment shouldn’t stop us from doing what’s right for the future,” he said. “We will negotiate in good faith with any Republican who wants to help make this happen. But we have to do it. “

He called GOP Senate Chairman Mitch McConnell the day before his speech to inform him of the proposal. But he made little progress.

McConnell has called Biden’s plan a “Trojan horse” for tax hikes and liberal sociopolitical changes that Republicans do not want to be a part of.

“I think it’s a big mistake,” McConnell said Thursday at an event in Kentucky. Despite the fact that everyone wants more infrastructure, Biden’s proposal “will not get any support on our side”.

Tax increases

While many of the physical infrastructure projects proposed by Biden are likely to have bipartite backing, the biggest obstacle is agreeing on how to pay for them. Biden would increase the corporate tax rate from 21% to 28% set in former President Donald Trump’s 2017 tax cut. Companies would also pay significantly more for their global profits. He also proposes removing all fossil fuel tax breaks and removing incentives to relocate assets and jobs overseas.

“We can work together to find sensible ways to pay for real infrastructure laws without resorting to partisan tax hikes that will hurt our economy,” said Rob Portman, Republican Senator from Ohio.

Several Washington corporate lobby groups also issued statements criticizing the proposed tax hikes.

Portman was one of ten GOP senators invited to the White House in February to negotiate a pandemic relief bill with Biden, despite the president ultimately choosing a $ 1.9 trillion partisan measure without pushing Republican votes through Congress.

Washington Democratic Representative Pramila Jayapal, chair of the Progressive Caucus of Congress, said the Biden plan was way too small.

“We believe our country is ready for an even bolder, more comprehensive and integrated plan,” she said. “It makes little sense to narrow down your previous ambitions with regard to the infrastructure or to compromise with the physical realities of climate change.”

New York representative Alexandria Ocasio-Cortez, a prominent voice among young liberals, described Biden’s plan as “admirable”.

“But even if you have the vision that the Biden administration has, my concern is that they have allocated $ 2.25 trillion over eight years to make that vision happen, and that is just not enough “she said on Wednesday in a virtual town hall night.

The Democrats are already laying the groundwork for the package to be drawn up and voted on, regardless of its final form. Spokeswoman Nancy Pelosi set a deadline for the House to pass on July 4th. This could allow the Senate to complete work on the bill in early August before the month-long congressional recess.

Decisive decisions about the packaging and sequencing of both the infrastructure proposal and another social policy plan worth several trillion euros must be made in-house, which Biden plans to present in April. How that’s done depends on how tough Republicans are for working together in the parts of the plan they like and how united Democrats will stand outside the pressures of the pandemic.

Ear tags return

Part of Biden’s plan is most ripe for bilateral support and could be broken down into a separate bill. The land transport section – roads, bridges and the like – could receive GOP support. This would be necessary because it contains elements that are not eligible for the accelerated budgetary vote process, where the legislature can only pass the Senate by democratic votes.

In an effort to do business, Democrats and Republicans in the House are encouraging the use of ear tags, special projects in member’s districts that can be included in expense packages. House members can begin formally submitting their local or other project proposals on Thursday, each of which must be publicly released.

The climate initiatives in Biden’s plan, which are important to progressive Democrats, are not going to get much, if any, Republican support and are unsuitable for reconciliation.

But Missouri representative Sam Graves, the top Republican on the House’s Transportation and Infrastructure Committee, revised a statement Wednesday warning: “Republicans could not support an infrastructure bill that is actually a climate bill They don’t focus on core transportation and infrastructure needs. “

In a subsequent, more conciliatory statement, he said that “our country desperately needs Congress to find common ground to make smart and responsible investments in our infrastructure,” and Biden’s proposal is “just the beginning of the process.”

“I hope the focus will be on proposals that can actually be supported by both parties,” he added.

Shelley Moore Capito

Photographer: Stefani Reynolds / Bloomberg

West Virginia Senator Shelley Moore Capito, the senior Republican on the Senate Environment and Public Works Committee, was part of the stimulus meeting with Biden in February and said last week she would “try” to work with Democrats. However, she expressed skepticism about his infrastructure plan and suggested that it would cost her government coal jobs.

“President Biden’s so-called ‘job’ proposal is a clear attempt to transform the economy by advancing progressive priorities in unprecedented ways,” she said in a statement. “The proposal would aggressively reduce the use of traditional energy resources and eliminate well-paying jobs in West Virginia and across the country.”

She added that the corporate tax hikes would “weigh on” the economy as it recovers from the pandemic.

Republican opposition to tax hikes means that part of the Biden plan will most likely need to be included in a reconciliation bill, which will also be used for Biden’s incentives. The multi-stage process of drawing up this law provides that the legislature predicts completion in September or October.

Senate Majority Leader Chuck Schumer is investigating whether Senate rules would allow him to push up to three reconciliation laws this year and next.

The budget process will be difficult because of moderate Democrats ‘skepticism about tax hikes and progressives’ calls for a larger bill. Pelosi can only lose four votes in the House, and a single Democratic defect can cut the bill in the 50-50 Senate if all Republicans are against it.

Three Northeastern Democrats in the House of Representatives have already called for an end to a cap on state and local tax deductions in Trump’s tax law for 2017 as the price of their vote.

The government argues that it is about nothing less than America’s competitiveness against an emerging China.

“This is the biggest game I have seen in my economic career in the onshore industry to build emerging industries and gain global market share in areas where we could beat our competitors,” said Jared Bernstein, member of the Economic Council White House advisors said in a Bloomberg TV interview on Thursday.

(Updates with McConnell comments in 10th paragraph)

– With the assistance of Jarrell Dillard.

How to contact the reporters on this story:
Erik Wasson in Washington at [email protected];
Laura Litvan in Washington at [email protected];
Billy House in Washington at [email protected];
Jennifer Epstein in Washington at [email protected]

To contact the editors responsible for this story:
Joe Sobczyk at [email protected];
Alex Wayne at [email protected]

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