Biden initially sought $2.4 trillion for infrastructure. Then it was $1.7 trillion. Now, supposedly it is $1 trillion.
The WSJ reports Biden Floats New Infrastructure Spending Offer of $1 Trillion
During a Wednesday meeting with Sen. Shelley Moore Capito (R., W.Va.), Mr. Biden put forward the $1 trillion proposal, down from $1.7 trillion previously, and outlined options to pay for the spending that wouldn’t boost the corporate tax rate to 28% from 21%, as he previously proposed. Republicans have called any effort to boost the corporate tax rate or unwind the Republicans’ 2017 tax law a nonstarter.
“This should be completely acceptable to a number of Republicans who have said their bottom line is they want to leave the 2017 tax law untouched,” White House press secretary Jen Psaki said Thursday. “We’re also going to keep options open and keep a range of paths open,” she said.
Under one of Mr. Biden’s suggestions, the biggest companies would pay a minimum corporate tax of 15%, according to people briefed on the matter. Unlike Mr. Biden’s proposed corporate tax-rate increase or changes to taxes on U.S. companies’ foreign income, the minimum tax wouldn’t directly reverse the 2017 law, passed by Republicans with no Democratic support. That law reduced tax bills for most families and businesses, eliminated some breaks and dropped the corporate tax rate to 21% from 35%.
But the minimum corporate tax, already proposed by Mr. Biden as part of his broader agenda, would have some of the same effects by clawing back various tax breaks.
GOP Mulls Throwing Biden More Infrastructure Money
Politico reports GOP Mulls Throwing Biden More Infrastructure Money
Sen. Shelley Moore Capito (R-W.Va.), her party’s lead infrastructure negotiator, is preparing to come back to the table with Biden tomorrow in the latest round of high-stakes talks that have frozen the White House’s initial $4 trillion proposal on Capitol Hill. The gap between the two sides is massive at the moment — Biden and Republicans aren’t even counting the size of the bill the same way and are approximately $750 billion apart. Their differences appear nearly impossible to bridge right now, according to two GOP sources familiar with the negotiations.
Sen. Ben Cardin (D-Md.) said on Thursday that his party would give the GOP about 10 days before making moves toward passing a package using budget reconciliation, an arcane process that allows certain spending bills to evade the Senate’s 60-vote requirement. Cardin described Democrats’ strategy as “going as far as we can with Republicans and not delay[ing] it beyond this work period without seeing some action.”
Republicans are skeptical they can muster the willingness to come up significantly from their current offer of about $250 billion in new money over current spending levels on roads, bridges and other infrastructure. Biden wants at least $1 trillion over current levels — a concession from his initial proposal of more than $2 trillion in new infrastructure spending, but a pitch that Republicans still view as a “major backslide” in negotiations, one GOP source said.
During a meeting at the White House on Wednesday, Biden presented a new offer to Capito about how the package could be paid for. Instead of raising corporate tax rates from 21 percent to 28 percent, Biden proposed that negotiators could impose a new corporate version of the alternative minimum tax, set at 15 percent.
Questions of the Day
Q: What is Biden proposing to cut from his original request?
Q: Where are Republicans willing to spend more?
The answer to both is no one seems to know. I read a dozen articles but found no answers.
For example, WaPo notes the alleged “Tax Concession” but does not address any spending changes.
President Biden signaled at a private meeting on Wednesday that he would be open to significant revisions on the size of his infrastructure package and how it would be paid for in order win Republican support, outlining a plan for about $1 trillion in new spending financed through tax changes that do not appear to raise the top corporate rate.
In his meeting with the GOP’s top negotiator, Sen. Shelley Moore Capito (R-W.Va.), Biden raised the possibility he could take the proposed rate increase off the table in an attempt to broker a compromise, according to a person familiar with the talks who spoke on the condition of anonymity to describe them. The president still intends to seek the tax increase, the source said, meaning the White House could pursue the policy outside of the infrastructure debate — or in the case that bipartisan negotiations ultimately collapse.
Biden’s emphasis on these elements of his tax plan Wednesday marked an attempt by the White House to thread a delicate political needle. It aimed to preserve the president’s 2020 campaign pledge not to raise taxes on Americans making under $400,000 a year, while steering clear of the “red line” set down by Republicans who see the 2017 tax cuts as their crowning economic achievement.
Threading a Needle
No one in their right mind believes Biden can thread a needle keeping his campaign pledges intact while steering clear of Republican and Democrat “red lines”.
There are 25 New York representatives alone who insist on restoring State and Local Tax deductions. Other high tax reps have stated the same. But Biden can only afford to lose a few reps or he loses a House majority.
If the House restores that deduction, where does the revenue come from?
A minimum corporate tax of 15% will not raise much money.
Question of Semantics
These numbers swirling around have a huge context difference as Republicans want to count unspent stimulus money in their totals while Biden insists on new spending.
The Republicans are willing to spend $1 trillion on infrastructure but only $250 billion is “new spending”.
All of Biden’s demands are for “new spending”.
So despite a deep plunge from $2.4 trillion to $1.0 trillion the camps are roughly $750 billion apart despite the fact they both propose spending $1 trillion.
And we still do not have any answers to my seemingly simple questions.
Budget Reconciliation
Many Democrats are ready to throw in the towel on negotiations hoping to ram this through on budget reconciliations.
The budget reconciliation only takes a simple majority and it avoids a filibuster too.
Under a budget reconciliation process, if all 50 Democrats vote passage (assuming the House can deal with the SALT issue), then Kamala Harris would cast the tie breaking vote.
What About Democrat Senators Manchin and Cinema?
White House correspondent Garrett Haake just interviewed Senator Joe Manchin of WV.
A Manchin defection would kill Reconciliation in one shot.
And we still have not heard from Krysten Cinema (D., AZ) who has expressed similar concerns in the past.
With all these forces in play, it’s no wonder Biden keeps dropping his demands. If only we knew what he actually dropped.
Regardless, the tax issue alone is still not settled, neither of them actually, corporate taxes and SALT.
Mish
