President Joe Biden will meet with a bipartisan group of lawmakers, all former mayors or governors, in an effort to discuss possible areas of compromise for his infrastructure plan as lawmakers float alternatives to sticking points such as the White House’s proposed corporate tax hike.
Several of the senators attending a meeting in the Oval Office on Monday are former governors, along with Florida Rep. Charlie Crist, a Democrat, while the rest are former mayors.
It’s a group that the White House said will “understand firsthand the impact of a federal investment in rebuilding our nation’s infrastructure on their communities.” Biden is still waiting to introduce a “human infrastructure” proposal that will be focused on social programs such as the child tax credit, but he has not yet said when this will be rolled out.
Under pressure is Biden’s broader definition of infrastructure in the more than $2 trillion American Jobs Plan, nearly one-fifth of which targets expanded in-home care for seniors and the disabled. A corporate tax hike has also proven to be divisive, drawing the ire of Republicans and some centrist Democrats who say Biden’s proposed rate at 28% is too high.
NO SINGLE POINT PERSON FOR BORDER SITUATION, WHITE HOUSE SAYS
Biden, a 36-year senator from Delaware, has repeatedly said he hopes to work with Republicans, emphasizing this ahead of his first infrastructure meeting with lawmakers last week.
And ahead of the second meeting, White House press secretary Jen Psaki repeated that sentiment.
“We’re quite open,” Psaki told reporters on Monday. Here are two sticking points that should dominate the meeting.
Tax tussle
To harness a deal, Biden may need to hew to a more typical infrastructure definition and remove the two major sticking points. That would mean targeting roads, bridges, ports, and airports over provisions such as the $400 billion for home-care and eldercare workers.
The White House said it is awaiting a proposal from a group of 10 Republicans and that this is the next step in the process, but ideas for cooperation floated by some Republicans and Democrats have garnered some traction.
“What we’re waiting for is a counterproposal from Republicans in Congress,” Psaki said last week.
Biden has pledged that the scope of his bill and how to pay for it is up for negotiation.
A compromise on the 28% corporate tax rate proposed by a companion bill and a narrower plan of action have gained steam among some Democrats and Republicans, even as some Democrats in the House urge further reforms.
Biden’s proposed corporate tax hike earned sharp a rebuke from business groups, and some Democrats and Republicans argued it would make companies in the United States less competitive.
Instead, a potential 25% rate has emerged as a possible compromise as it is higher than the 21% secured in the GOP-led 2017 Tax Cuts and Jobs Act, which cut the rate down from 35%.
In 2017, Democratic Sen. Joe Manchin of West Virginia supported a 25% rate amendment to the Tax Cuts and Jobs Act bill, and he has revived his push. Boosting the rate to 25% would raise $400 billion over 10 years, Manchin said in late March, arguing that a pay-for was needed.
“I think we should be paying for anything that adds to the debt,” he added. “I think the corporate tax should have never gone below 25%.”
Crucially, Manchin, who has emerged as a key vote in the evenly divided Senate, has also said he won’t back the higher 28% hike. Democrats hold little chance of passing legislation without his vote.
“As the bill exists today, it needs to be changed,” Manchin said earlier this month in an interview with Hoppy Kercheval of West Virginia MetroNews’s Talkline.
“If I don’t vote to get on it, it’s not going anywhere,” he said.
And there are others in the Democratic Party’s upper chamber who favor a smaller hike.
“It’s more than just me, Hoppy,” Manchin said. “There’s six or seven other Democrats who feel very strongly about this. We have to be competitive, and we’re not going to throw caution to the wind.”
A group of House Democrats also wants to roll back a $10,000 cap on deductions for state and local taxes enacted under the 2017 tax bill.
‘Sweet spot’
Republicans in the Monday session are expected to push the president to consider a smaller package. That size of a bill would allow Biden to claim a bipartisan victory because it would garner GOP votes in the Senate and likely the House.
Texas Sen. John Cornyn, a Republican, said he is working with Democrats on an $800 billion proposal.
“There is a core infrastructure bill that we could pass with appropriate pay-fors like roads and bridges and even reaching out to broadband, which this pandemic has exposed a great digital divide in the country,” Cornyn told Fox News on Sunday.
West Virginia Sen. Shelley Moore Capito, a Republican, last week told CNBC that she views a $600 billion to $800 billion plan as a “sweet spot.”
Biden has faced pressure to drop the eldercare and home-care provisions and the accompanying tax hikes to pay for them.
Delaware Sen. Chris Coons, a Biden ally, has said he anticipates that the final bill will be smaller and focused on hard infrastructure, without the companion pay-fors.
“If there are political challenges with raising the rate, then I think we need to be having a conversation about what are the pay-fors,” Coons told Punchbowl News. “The other option, frankly, is for us to not to fully pay for it.”
Last week, Coons said the bill could be split into two: a bipartisan package of around $800 billion and a second package that would pass through a budgetary process with only Democratic votes.
Asked on Sunday what Republicans stood to gain from supporting a Biden bill, Coons said Republicans could show voters that Congress works.
“If we come together in a bipartisan way to pass that $800 billion hard infrastructure bill, then we show our people that we can solve their problems,” he said.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
Some Democrats are wary of the approach, concerned that the bill will make compromises while still failing to draw GOP votes, a complaint that surfaced around Biden’s coronavirus spending package.
