Biden open to compromise on infrastructure
But inaction ‘not an option,’ president says
President Joe Biden drew a red line on his $2.3 trillion infrastructure plan Wednesday, saying he is open to compromise on how to pay for the package but inaction is unacceptable.
The president turned fiery in an afternoon speech, saying that the United States is failing to build, invest and research for the future and adding that failure to do so amounts to giving up on “leading the world.”
“Compromise is inevitable,” Biden said. “We’ll be open to good ideas in good-faith negotiations. But here’s what we won’t be open to: We will not be open to doing nothing. Inaction, simply, is not an option.”
Biden challenged the idea that low tax rates would do more for growth than investing in care workers, roads, bridges, clean water, broadband, school buildings, the power grid, electric vehicles and veterans hospitals.
Biden last week proposed funding his $2.3 trillion infrastructure plan largely through an increase in the corporate tax rate to 28% and an expanded global minimum tax set at 21%. But he said Wednesday he was willing to accept a rate below 28% so long as the projects are financed and taxes are not increased on people making less than $400,000.
“I’m willing to listen to that,” Biden said. “But we gotta pay for this. … There’s many other ways we can do it. But I am willing to negotiate.”
He stressed that he had been open to compromise on his $1.9 trillion coronavirus relief plan, but Republicans never budged beyond their $600 billion counteroffer.
“If they’d come forward with a plan that did the bulk of it and it was $1.3 billion or four … that allowed me to have pieces of all that was in there, I would have been prepared to compromise,” Biden said. “But they didn’t. They didn’t move an inch. Not an inch.”
The president added that America’s position in the world was incumbent on taking aggressive action on modern infrastructure that serves a computerized age. Otherwise, the county would lose out to China in what he believes is a fundamental test of democracy. Republican lawmakers counter that higher taxes would make the country less competitive globally.
“You think China is waiting around to invest in this digital infrastructure or on research and development? I promise you they are not waiting. But they’re counting on American democracy, to be too slow, too limited and too divided to keep pace.”
His administration was pressing the case for tax increases. Treasury Secretary Janet Yellen said it was “self-defeating” for then-President Donald Trump to assume that cutting the corporate tax rate to 21% from 35% in 2017 would make the economy more competitive and unleash growth. Yellen said that competing on tax rates came at the expense of investing in workers.
“Tax reform is not a zero-sum game,” she told reporters on a call. “Win-win is an overused phrase, but we have a win-win in front of us now.”
Yellen said the tax increases would produce roughly $2.5 trillion in revenues over 15 years, enough to cover the eight years’ worth of infrastructure spending being proposed.