McConnell Vows to Fight Biden’s Infrastructure Plan

McConnell Vows to Fight Biden’s Infrastructure Plan

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Plus, 5 things you should know about the Biden plan
Thursday, April 1, 2021
 

McConnell Vows to Fight Biden’s Infrastructure Plan

The fight over President Joe Biden’s $2.25 trillion infrastructure plan is just getting started, and it’s bound to drag on far longer than the race to pass his $1.9 trillion Covid rescue law.

White House Press Secretary Jen Psaki told reporters Thursday that Biden hopes to see Congress pass the infrastructure package by the summer. “The American Rescue Plan was an emergency package, we needed to get it done as quickly as possible to get the pandemic under control, to get relief, direct checks out to Americans,” Psaki said. “We’ve got a little bit more time here to work and have discussions with members of both parties.”

Senate Minority Leader Mitch McConnell (R-KY) on Thursday pledged to fight Biden’s proposal. "That package that they're putting together now, as much as we would like to address infrastructure, is not going to get support from our side. Because I think the last thing the economy needs right now is a big, whopping tax increase," McConnell told reporters at an event in Kentucky.

McConnell also pointed to the national debt as a reason Republicans would oppose the massive spending plan. "You're either alarmed about the level of national debt and the future impact of that on our children and our grandchildren or you aren't," he said. "My view of infrastructure is we ought to build that which we can afford, and not either whack the economy with major tax increases or run up the national debt even more."

White House Chief of Staff Ron Klain told Politico that Biden would try to work with Republicans, but he left the door open to again use the budget reconciliation process to get the package through Congress without GOP votes. “In the end – let me be clear – the president was elected to do a job and part of that job is to get this country ready to win the future. That’s what he’s going to do. We know it has bipartisan support in the country and so we’re going to try our best to get bipartisan support here in Washington,” Klain said.

Biden on Thursday named five members of his Cabinet to help sell the package to the public: Transportation Secretary Pete Buttigieg, Secretary of Housing and Urban Development Marcia Fudge, Energy Secretary Jennifer Granholm, Commerce Secretary Gina Raimondo and Labor Secretary Marty Walsh.

The bottom line:
Democrats are likely to take the reconciliation route again, but the White House’s summer timetable is ambitious and keeping Democrats united won’t be easy.

The package faces a “brutal slog,” as Politico puts it: “Absent a seismic political shift, Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer will have to draft a sprawling bill that can only afford to lose three Democratic votes in the House and zero in the Senate.” Democratic lawmakers will be coming up with their own demands, pushing what at times will likely be competing interests. “The first package was obviously a pandemic, an emergency. It was his first ask. It was wildly popular,” said one Democratic lawmaker told Politico. “This one, it’s different territory.”

5 Things You Should Know About Biden’s Infrastructure Plan

Here’s a roundup of some initial reaction to and analysis of Biden’s $2.25 trillion plan.

Critics find plenty to dislike: “While there’s widespread support across the political aisle to upgrade the nation’s infrastructure, critics of Biden’s plan ― and even some of its supporters ― have raised questions whether all the spending in the plan is truly needed, whether the tax increases on corporations are excessive and why the White House is using an unusual accounting approach to capture the deficit impact,” The Washington Post’s Heather Long writes.

Biden is making a big bet on the benefits of tackling climate change: The president is trying to make the case that fighting climate change can create jobs, not destroy them. “For decades, Democrats have insisted ‘jobs versus the environment’ is a false choice. But in the scale of his proposal and the audacity of his promises, Mr. Biden may be laying his political future on that idea,” The New York Times reports. “He faces a lot of skepticism.” Union leaders, the Times adds, “are skeptical that the well-paying union jobs the president promises will materialize, noting that, so far, the ecosystem of manufacturers, contractors and utility developers that has grown up around the green economy has often been low-paying and hostile to unions.”

And he’s challenging GOP orthodoxy on taxes and economic growth: The 2017 Republican tax cuts were based on the argument that lowering taxes on businesses would spur investment and job creation. But gross domestic product grew at a 2.4% rate in the two years before the tax overhaul and 2.4% in the two years after, writes Patricia Cohen of The New York Times.

“By contrast,” Cohen says, “the animating idea behind the tax plan put forward by the Biden administration on Wednesday is that the best way to increase America’s competitiveness and foster economic growth is to raise corporate taxes to finance huge investments in transportation, broadband, utilities and more. … By shifting the tax burden, the Biden administration is saying corporations — among the biggest winners the last time around — should pick up more of the tab this time.”

Not surprisingly, that’s drawn strong opposition from the business community. “We strongly oppose the general tax increases proposed by the administration, which will slow the economic recovery and make the U.S. less competitive globally — the exact opposite of the goals of the infrastructure plan,”
Neil Bradley, chief policy officer of the U.S. Chamber of Commerce said in a statement Wednesday.

He’s also taking sides in a Democratic Party argument: In announcing his infrastructure plan Wednesday, Biden said he wants to build from the “middle out.” Bloomberg Businessweek’s Peter Coy explains that the phrase is more than just a rhetorical flourish. Biden, he says, “was taking sides in a long-running argument inside the Democratic Party. He was siding with the populist, liberal wing of the party and implicitly distancing himself from the low-tax, pro-business wing associated with former Treasury secretaries Robert Rubin and Lawrence Summers, among others.”

The phrase, Coy explains, was coined by Nick Hanauer, a wealthy entrepreneur and venture capitalist who now advocates for liberal causes, and it indicates an economic approach focused on building a prosperous middle class in order to juice broad-based growth. “It’s the left’s alternative to top-down, or trickle-down economics, which is based on the concept that cutting taxes and reducing regulation on the rich will unleash their entrepreneurial energies and benefit all,” Coy writes. And Biden’s use of the term is another indication that while he has long been seen as a centrist, he’s taking a more progressive approach to the economy than Bill Clinton or Barack Obama did.

“The Biden administration is the first administration in my lifetime to actually believe that the neoliberal framework is wrong and to advance a counter-narrative and new agenda,” Hanauer tells Coy. “It’s incredibly exciting and will lead to ridiculous prosperity for everyone.”

Tax hikes on the rich are popular. Corporate tax hikes less so:
A Morning Consult/Politico poll released Wednesday found that more than half of voters support tax hikes to fund infrastructure spending — and voters by a two-to-one margin prefer infrastructure improvements paired with tax increases on the rich and corporations to those without tax hikes.

But the tax hikes on individuals earning more than $400,000 a year and those on corporations aren’t seen the same, with a 10 percentage point drop in support for the business taxes.

The survey of 2,043 registered voters was conducted March 26 to 29 and has a margin of error of 2 points.

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