Democrats Dismiss Republican Infrastructure Offer, Before It’s Even Introduced
Republicans are still working on their scaled-back counterproposal to President Joe Biden’s $2.3 trillion infrastructure plan, but Democrats say they’ve already heard enough to know the GOP offer is a non-starter.
The GOP plan, being spearheaded by Sen. Shelley Moore Capito (R-WV), the ranking Republican on the Environment and Public Works Committee, is likely to total $550 billion to $880 billion, with the costs paid for with user fees and unspent Covid relief funds.
Capito told reporters Tuesday that she hoped to have a “conceptual” infrastructure proposal by the end of the week and that the Republican offer would present a contrast to Biden’s sweeping blueprint. Republicans have criticized the scope of Biden’s plan and the corporate tax increases the president has proposed. The GOP offer is expected to focus on roads, bridges, ports and airports, as well as water infrastructure, broadband access and updating the electric grid. Senate Minority Leader Mitch McConnell said Tuesday that Republicans were “open to a more modest and targeted” package. Sen. Roger Wicker (R-MS) said he thought the GOP’s initial offer "might be somewhere south of $600 billion.”
That’s enough for Democrats to say the GOP plan will fall far short. “Six hundred billion dollars is not what the country needs — the country needs $2 trillion,” Commerce Secretary Gina Raimondo told Politico. “It’s not nearly enough.”
Politico’s Burgess Everett and Marianne LeVine report that Senate Democrats are also dismissing the nascent GOP plan, suggesting that it’s too small to be useful as the basis for bipartisan talks:
“Sen. Richard Blumenthal (D-Conn.) called the proposal ‘totally anemic’ and an ‘insult’ to Biden’s offer. Sen. Elizabeth Warren (D-Mass.) summarized Democrats’ feelings by observing that ‘the Republican proposal does not meet the moment.’
“’A far cry from $2.5 trillion,” added Sen. Mazie Hirono (D-Hawaii). ‘Until the Republicans realize the needs are far, far greater from what they’re proposing, I don’t know that we’re going to get much further. I hope so … but we’re not going to wait forever.’”
The bottom line: The dynamics of the infrastructure talks may be reminiscent of those on President Biden’s $1.9 trillion Covid relief package. In that case, Republicans’ initial offer, also less than a third the size of Biden’s proposal, was promptly rejected and Democrats moved quickly to pass the legislation on their own. But there may be more interest in reaching a bipartisan deal on at least part of the infrastructure plan, and less pressure to act quickly.
There’s still a long, bumpy road ahead before lawmakers settle on an infrastructure plan.
Meanwhile, lawmakers are wasting no time lobbying to receive federal infrastructure money for their districts. Democrats are already highlighting specific projects to the Biden administration, from bridges in Minnesota to rail tunnels in New Jersey, and GOP lawmakers are getting in on the action, too. “Even Republicans who have been disinclined to support Biden’s economic agenda have pushed their pet projects at a moment when Democrats are vying to spend big,” The Washington Post’s Tony Room reports.
Number of the Day: 200 Million
President Joe Biden said Wednesday that by the end of the day, the U.S. will have achieved his stated goal of administering 200 million Covid-19 vaccine doses within the first 100 days of his administration. “Today, we did it, today we hit 200 million shots in the 92nd day in office,” Biden said at the White House.
Biden also highlighted new tax credits for small businesses intended to defray the costs of getting employees vaccinated. The credits, which were part of the $1.9 trillion Covid relief bill signed into law in March, will be in effect between April 1 and September 30 and reimburse companies up to $500 per day per employee getting vaccinated.
“I'm calling on every employer, large and small, in every state, to give employees the time off they need, with pay, to get vaccinated,” Biden said. “Any time they need with pay to recover, if they're feeling under the weather after the shot. No working American should lose a single dollar from their paycheck because they chose to fulfill their patriotic duty of getting vaccinated.”
Another Battle Brewing Over Lowering Prescription Drug Prices
The White House is expected to include proposals to lower prescription drug prices as part of President Biden’s next big spending plan, focused on caregiving and what the White House calls “human infrastructure.” In anticipation, House Republicans and Democrats are going on the offensive, reintroducing their own drug-pricing plans.
That GOP legislation “contains dozens of provisions with bipartisan support aimed at lowering the price of prescription pharmaceuticals,” The Washington Post’s Paige Winfield Cunningham reported Wednesday. “Most of the provisions are relatively minor, involving things such as expanding transparency or tweaking incentives, but the bill would cap what seniors pay out of pocket for Medicare drugs for the first time ever.”
Democrats, meanwhile, are expected to reintroduce sections of their own legislation to lower drug prices, known as H.R. 3, as early as Thursday, The Hill reports.
The fight ahead: Biden’s plan and the Democratic bill are expected to call for allowing the Department of Health and Human Services (HHS) to negotiate prices for drugs in the Medicare program, a key element of the Democratic health care agenda. Republicans don’t want to go that far, objecting to what they call “government price control.” They also argue that a Democratic health reform passed by the House in late 2019 would have hobbled drug companies’ efforts to develop Covid-19 vaccines and treatments.
“That argument seems dubious,” Winfield Cunningham writes, “considering the federal government has paid pharmaceutical companies billions of dollars for developing, manufacturing and distributing six different coronavirus vaccines.” But a Congressional Budget Office analysis did estimate that the 2019 Democratic reforms would have led to lower revenue for drugmakers and lower investment in research and development. As a result, CBO estimated, eight fewer drugs would be brought to market from 2020 through 2029 and about 30 fewer drugs would be released over the following decade.
The bottom line: The drug-pricing debate to come is likely to sound a lot like the one we had in 2019, and the result could be much the same, too. “Expect to hear Republicans talk about their bill a lot, but it won't go anywhere,” Winfield Cunningham writes, adding that it’s far from clear that Democrats will be able to pass some portions of their legislation. “Even if they use budget reconciliation, requiring just 50 votes in the Senate, they're operating on extremely narrow margins. And while allowing direct negotiations with HHS is likely to pass muster within budget reconciliation rules, other parts of the bill, including the international pricing index, might not.”
Read the full story at The Washington Post.
Progressive Lawmakers Introduce Plan for Free College for Most Families
A group of progressive lawmakers led by Sen. Bernie Sanders (I-VT) and Rep. Pramila Jayapal (D-WA) released a plan Wednesday to make college free for most American families, paid for by new taxes on investors.
The legislation, called the College for All Act, would eliminate tuition at community colleges and allow students from households earning less than $125,000 per year to attend public universities at no cost. It would also double the Pell Grant maximum to nearly $13,000, up from the current $6,495, and increase funding for historically Black colleges and universities, among other things.
The costs of the proposal are to be covered by new taxes on Wall Street trading. A separate bill released Wednesday, called the Tax on Wall Street Speculation Act, calls for a tax of 0.5% on stock trades, a 0.1% tax on bond trades, and a 0.005% tax on derivative trades. The taxes could raise as much as $2.4 trillion over 10 years, the bill’s backers say, while also reducing excessive trading. Critics argue the tax proposal offers something of a contradiction, since if it reduces trading activity, it will also reduce the revenues it generates.
Sanders and Jayapal have introduced similar measures before, Roll Call notes, but this is the first time Democrats have controlled the Senate when they’ve done so. President Biden has endorsed some parts of the proposal in the past, but not the whole package.
Foxconn’s $10 Billion Wisconsin Project Gets Scaled Way Back
In 2017, Foxconn, a massive electronics manufacturer based in Taiwan, committed to spending $10 billion to build an LCD manufacturing plant in Wisconsin. Fueled by roughly $3 billion in state tax credits and millions more in state-funded site improvements, the facility was to generate as many as 13,000 jobs, turning tiny Mount Pleasant, Wisconsin, into a global high-tech hub.
At the groundbreaking ceremony in 2018, then-President Donald Trump and then-Gov. Scott Walker, both Republicans, sang the praises of Foxconn CEO Terry Gou, with Trump calling him “one of the great men of the world, one of the great business leaders of the world,” while referring to the still theoretical plant as “the eighth wonder of the world.”
“America is open for business more than it has ever been,” Trump said, neatly patting himself on the back for a job well done.
This week, current Wisconsin Gov. Tony Evers, a Democrat, announced that the state was drastically reducing the scope of the deal — confirming critics’ fears that the agreement was something less than realistic. In the latest iteration, Foxconn has agreed to spend $672 million to build a factory that will employ 1,454 people. The incentive package has been reduced more than thirty-fold, with the state offering about $80 million in tax breaks.
“I made a promise to work with Foxconn to cut a better deal for our state,” Evers said. “The last deal didn’t work for Wisconsin.”
The bottom line: From the start, critics of the Foxconn deal accused the company of promising far more than it could deliver and charged Walker with putting too much public money into a sketchy deal. The renegotiation of the agreement will save Wisconsin residents money, though there’s no way to get back the hundreds of millions of dollars already spent by state and local agencies to prepare the site, or to recover the dozens of buildings torn down, some seized through eminent domain.
“The cleared, prepped site is bigger than Central Park, with nearly 100 homes and small farms bulldozed to make way for Foxconn,” The Wall Street Journal reported. “For now, the site houses a few shell buildings and a nearly complete glass-and-steel dome that can be seen from nearby Interstate 94.”