Republicans Prepare $1 Trillion Infrastructure Counteroffer to Biden

By Yuval Rosenberg

Republicans Prepare a Nearly $1 Trillion Infrastructure
Counteroffer to Biden

Although there are growing doubts about the likelihood of
reaching an agreement, Republican negotiators said they plan to
make a substantial counteroffer on Thursday to President Joe
Biden’s $1.7 trillion infrastructure proposal.

"This is going to be a very good offer," Senator Roger Wicker
(R-MI) said Tuesday, adding that the proposal will come "close" to
$1 trillion over eight years.

A significant increase over their initial $568 billion proposal
over five years, the counteroffer will get the Republicans closer
to Biden’s latest plan, while still leaving an enormous $700
billion gap between the two sides.

Enough for a deal? The lead Republican negotiator, Sen.
Shelley Moore Capito (WV), said Tuesday that Biden had previously
signaled a willingness to accept a proposal in the neighborhood of
$1 trillion, and that she may request another in-person meeting to
try to seal the deal, Politico
reports.

"We were pretty universal on this, I mean there was no dispute
with what he said to us in the room that day," Capito said,
referring to her first meeting with Biden last week. "That’s why I
think, when we left there, we were pretty optimistic that this is
doable."

Wicker also referred to what he saw as Biden’s willingness to
accept a $1 trillion deal. "We’re going to hit a figure very close
to what the president said he would accept," he said.

The White House, though, pushed back against that version of
events, with Press Secretary Jen Psaki saying the latest $1.7
trillion offer correctly represents the president’s stance on the
matter, casting doubt on Biden’s purported interest in accepting a
much smaller deal.

Financing the GOP proposal will also likely be an issue. Wicker
said that Republicans want to repurpose funds already authorized
for Covid relief to help pay for their plan, an option that will
not likely be embraced by Democrats, who want to use corporate tax
hikes to fund their programs.

Bipartisan end run? Meanwhile, a bipartisan group of
senators is working on its own infrastructure proposal, Sen. Mitt
Romney (R-UT) said Tuesday. The group reportedly includes Sen. Joe
Manchin (WV), a moderate Democrat who could be a key vote on any
eventual package.

Romney told
The Washington Post that the group is close to
agreement on a plan that focuses on traditional elements of
infrastructure such roads and bridges. "We’re not very far from the
Biden proposal on areas where we both think it’s appropriate for an
infrastructure bill," he said.

The more expansive set of programs included in Biden’s proposal,
such as money for elder care and electric vehicles, are not part of
the bipartisan blueprint, Romney said. Also being left out is
Biden’s proposal to undo parts of the 2017 Republican tax cuts in
order to help pay for his plan.

Clock is ticking. Pressure to reach a deal is building as
negotiators run up against Biden’s self-imposed deadline of
Memorial Day. Leaning into that pressure, Senate Majority Leader
Chuck Schumer (D-NY) said Tuesday that he plans to take up
infrastructure in July.

In the meantime, negotiators will continue to make offers and
counteroffers, all in the hope – or at least the appearance – of
trying to reach a bipartisan deal.

Point-Counterpoint: The ‘Blame Game’ Politics of Infrastructure
Talks

As the kabuki theater of infrastructure plays out this week,
here’s a look at the "blame game" politics involved from the
perspective of a conservative and a liberal:

Biden is trying to make sure Republicans get blamed for
failed bipartisanship: Biden’s $1.7 trillion counteroffer to
Republicans, slimmed down from an initial $2.25 trillion, wasn’t
really a good-faith effort to negotiate,
writes conservative Washington Post columnist Marc
A. Thiessen.

"First of all, it is simply insanity that anyone would consider
Biden’s plan to spend $1.7 trillion a major concession — or
Republicans offering to spend $800 billion chump change," Thiessen
says. "Second, Biden didn’t really cut his plan at all. … His
original plan
included just $821 billion in actual
infrastructure spending, which he has now reduced to $747 billion.
That means, to increase their offer above $800 billion, Republicans
would have to go along with Biden’s Orwellian redefinition of
‘infrastructure’ and agree to spend hundreds of billions on the
non-infrastructure items in his package."

Biden’s real goal here is to look like he’s trying to reach a
bipartisan consensus while forcing Republicans to walk away from
talks first, all with the aim of securing the support of Sen. Joe
Manchin (D-WV), who has pushed for bipartisanship — and whose vote
is critical if Democrats ultimately want to pass their massive
social spending plans without any Republican backing.

No, it’s Republicans who aren’t serious about a deal: A
bipartisan infrastructure bill would be a double victory for Biden,
liberal Washington Post columnist Paul Waldman
says: "He can claim a big legislative win, and
also tell voters that he has achieved his goal of bringing
cooperation back to Washington."

Republicans, on the other hand, want Biden and his
infrastructure bill to fail. That would be "a huge win for the GOP,
a black eye for Biden, and proof that Democratic rule isn’t
delivering for people," Waldman says. "While Republicans can’t
guarantee that outcome (since Democrats can still pass the bill
through the reconciliation process with a simple majority), by
withholding their votes they reduce the margin for error Democrats
have down to zero. … There is no outcome, substantive or political,
that Republicans would rather have than to see the infrastructure
bill go down in flames."

Number of the Day: 50%

Half of U.S. adults age 18 and over are now fully
vaccinated against Covid-19, according to the Centers
for Disease Control and Prevention. Nearly 74% of
seniors age 65 and over are fully vaccinated, according to the CDC,
and nearly 62% of adults have gotten at least one dose of vaccine.
President Biden earlier this month announced a goal of getting 70%
of adults at least one vaccine shot by July 4th.

Quote of the Day

"If you think of public health as a building, we haven't
quite built the foundation yet. We've flooded public health money
for the covid response atop this crumbling foundation."

– Dara Lieberman, director of government relations at
Trust for America's Health, an organization dedicated to boosting
community health, in a piece by The Washington Post’s Dan Diamond
on concerns surrounding the hundreds of billions of dollars
lawmakers provided for public health in response to the coronavirus
pandemic. "Now officials have a new challenge: responsibly
spend the money — while convincing Congress to set aside funds for
future priorities too," Diamond
writes.

Elizabeth Warren Proposes Tripling the IRS Budget to Help Stop
Wealthy Tax Cheats

Sen. Elizabeth Warren (D-MA) on Monday introduced a bill that
would remove the Internal Revenue Service’s base funding from the
annual appropriations process and provide the agency with a
mandatory $31.5 billion a year, nearly triple its current
budget.

Warren said that her bill, the Restoring the IRS Act of
2021, would help stop
wealthy tax cheats and close the tax gap, or the
difference between taxes owed and those collected each year, which
the Treasury Department recently estimated to be $600 billion as of
2019. Other estimates have put the annual gap at $1 trillion or
more.

Warren pointed to a
recent study from the National Bureau of Economic
Research that showed that the top 1% of Americans fail to report
more than a fifth of their income on tax returns and account for
more than a third of all unpaid federal income tax. Audit rates for
taxpayers making more than $10 million a year, meanwhile, are
nearly
80% lower than they were a decade ago, while audit
rates for corporations with more than $20 billion in assets have
fallen by nearly half.

President Biden has proposed boosting the IRS budget by $80
billion over 10 years, and the Treasury Department estimated in a
report last week that the increased funding and enforcement
measures would raise an additional $700 billion over a decade.
Warren’s plan calls for providing the IRS with even more funding —
and would do so annually instead of through a one-time boost spread
out over 10 years.

"Strengthening the IRS’s ability to go after wealthy tax cheats
will not only require more funding, but more stable
funding," Warren
said in a summary of her legislation. "Most of the
IRS’s funding is discretionary, meaning Congress decides every year
how much money the agency receives. This leaves the IRS budget
unpredictable and vulnerable to cuts. By contrast, mandatory
funding would provide funding on an ongoing basis, ensuring that
the IRS budget is steady, predictable, and sustained – money that
lobbyists can’t easily strip away."

Warren’s press release said that the legislation would boost tax
compliance by:

  • Requiring new third-party reporting from financial institutions
    to help verify tax filings for taxpayers with less visible income
    streams;
  • Requiring the IRS to shift audits toward corporations and
    wealthy individuals;
  • Requiring the IRS to report annually on the tax gap;
  • Requiring the IRS to analyze racial disparities in its
    enforcement;
  • Increasing underpayment penalties for taxpayers earning more
    than $2 million.

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