Biden: I’d be open to deal with the GOP on $2T plan
President Joe Biden, anticipating intense negotiations with Congress over his infrastructure and jobs plan, said Wednesday that he was willing to compromise but would not slow his push for one of the most bold and expensive proposals in recent years.
President Joe Biden on Wednesday said he was open to compromise with Republicans on how to pay for his approximately $2 trillion jobs and infrastructure package but insisted that inaction was unacceptable.
“Debate is welcome. Compromise is inevitable. Changes to my plan are certain,” Biden said. He added that he would soon invite Republican lawmakers to the White House and that the administration is “open to good ideas and good-faith negotiations.”
He said, for example, that he was willing to agree to a lower corporate tax rate than his proposal of 28% if Republicans had other ideas that would work. Such a change could be politically necessary for the measure’s success. Sen. Joe Manchin, D-W.Va., said this week that he supported raising the corporate rate from 21% to 25%, but not to 28%.
The remarks reflect a rapidly changing political calculus for Biden as he
seeks to build momentum for another of his top campaign promises. Biden signed a $1.9 trillion stimulus bill into law in March without Republican support. His comments on Wednesday suggest that he might not try the same approach with his infrastructure package.
Some Republicans, such as Senate Minority Leader Mitch McConnell, R-Ky., have said they support a scaled-back infrastructure plan, but they have criticized the proposed tax hikes and the large scale of Biden’s pitch.
Biden on Wednesday was unapologetic about the scope of his proposal, saying the money is needed to finance projects beyond just roads and bridges. He said, for example, that new spending was needed to do things like improve waste treatment plants and remove asbestos from schools.
“Maybe it’s because I come from a middle-class neighborhood, but I’m sick and tired of ordinary people being fleeced.”
Biden has not backed down on his insistence that the proposed spending increases be offset by a range of corporate tax hikes. This has prompted bipartisan unease. The Treasury on Wednesday outlined the proposed tax increases on businesses that Biden is seeking in his initial plan. It would raise about $2.5 trillion over 15 years, meant to offset the costs of the infrastructure package. These changes would have to be approved by Congress. They would also amount to one of the largest tax increases in decades.
“I’m open to ideas about how to pay for this plan,” Biden said. Biden added that he would not raise taxes on households earning less than $400,000 per year, a pledge he’d made during the presidential campaign.
In a 19-page report, Treasury officials called for more than a half-dozen tax measures affecting
U.S. companies, including an increase in the corporate tax rate and subjecting the overseas earnings of businesses to higher tax rates.
Unlike the $1.9 trillion stimulus plan that passed in March, the cost of which was almost entirely added to the national debt, the White House has said it will seek to pay for the infrastructure plan through tax hikes on businesses and corporations.
Fifty-five corporations saw zero federal tax liability in 2020, according to a report released this week by the Institute on Taxation and Economic Policy, a left-leaning think tank. The amount of corporate tax revenue raised by the government has fallen by half from above 2% of
U.S. Gross Domestic Product before the GOP tax law, the Treasury report says.
“Here you have 51 or 52 corporations of the Fortune 500 haven’t paid a single penny in taxes for three years,” Biden said this week. “Come on, man. Let’s get real.”
Biden’s plea arrived as House and Senate leaders forged ahead with their early work to enact his
multitrillion-dollar blueprint. The process of writing infrastructure spending into law is one that spans much of Congress, where many Democrat-led committees already have held hearings to examine federal funding for roads, bridges, pipes and other policy priorities, such as housing and climate change.
In doing so, Democratic leaders have echoed Biden’s pledge to compromise with Republicans.
But they have also threatened to try to move forward without Republicans if they must. Democrats passed the $1.9 trillion stimulus package in March without GOP support through a budget process known as reconciliation, which in the Senate requires 51 votes to pass legislation. The Democratic caucus has 50 votes; Vice President Kamala Harris can break a tie.
Democrats have signaled that they could use reconciliation again to adopt some or all of Biden’s infrastructure proposals, seeking to bypass a potential Republican filibuster. They gained an additional political advantage Monday, when the Senate’s parliamentarian appeared to open the door for the party to use reconciliation at least three more times than they initially anticipated between now and the
2022 midterms. Senate Majority Leader Chuck Schumer, D-N.Y., has declined to say how he plans to take advantage of the ruling.
“The American people want bold action to address our country’s many challenges, and Democrats now have more options to overcome Republican obstruction and get things done,” Ron Wyden, D-Ore., chairman of the Senate Finance Committee, said Monday.
First, Democrats face the task of passing major tax hikes to fund their infrastructure push. The centerpiece of Biden’s tax proposal is in increasing the corporate rate from 21% to 28%, after President Donald Trump’s
2017 tax law cut it from 35% in 2017. Trump compromised on his tax proposal after insisting for months that the rate needed to be lowered to 15%. He eventually softened his proposal.
The Treasury report released Wednesday projects more than $700 billion in new government revenue through revamping America’s international tax system. The plan would increase the global minimum tax paid by U.S. firms operating abroad from about 13% to 21%. It would also repeal provisions from the Republican tax law that the Biden administration says encourages outsourcing of U.S. manufacturing and production.
Biden’s plans have been criticized by American business groups and congressional Republicans.
“What the president proposed this week is not an infrastructure bill,”
Sen. Roger Wicker, RMiss., said this month. “It’s a huge tax increase, for one thing. And it’s a tax increase on small businesses, on job creators in the United States of America.”