Biden Offers Major Concession in Infrastructure Talks

By Yuval Rosenberg

Biden Offers to Slash Infrastructure Plan,
Adjust Corporate Tax Hike in Bid for GOP Support

In his meeting Wednesday with the top Republican negotiator on
infrastructure, President Joe Biden reportedly insisted that the
GOP must accept about $1 trillion in new spending as part of any
deal but indicated that he was open to shifting his corporate tax
proposals in an attempt to win bipartisan support.

Biden has proposed raising the corporate tax rate from 21% to
28%. Republicans have said that rolling back their 2017 tax cuts,
which reduced the corporate rate from 35% to its current level, is
a non-starter.

In talks Wednesday with Sen. Shelley Moore Capito (R-WV), Biden
outlined a plan that would leave the corporate tax rate unchanged,
at least for now, but would instead rely on a minimum corporate tax
of 15%, aiming to ensure that profitable companies can’t avoid
paying federal taxes, according to reports in
The Washington Post and other outlets.

"Biden still wants to raise the corporate tax rate to 28
percent, but that effort could now be pursued outside of the
infrastructure negotiations," the Post’s Seung Min Kim and Tony
Romm report. Biden reportedly also proposed increasing IRS
enforcement on corporations and top earners who use loopholes to
avoid taxes.

Those two revenue-raising measures were already part of Biden’s
tax plans, but the offer to set aside the corporate tax rate
increase "amounted to a major concession," Kim and Romm say — and
represented "an attempt by the White House to thread a delicate
political needle" by raising revenue while avoiding the GOP’s red
line on the 2017 tax law.

Republicans are still likely to oppose the revenue plans. Some
have criticized Biden’s proposal to increase IRS funding by $80
billion over 10 years. And the 15% minimum corporate tax "has been
criticized by Republicans and some economists for being an
inefficient way to increase taxes," Justin Sink and Laura Davison
report at
Bloomberg News. "Critics have said that imposing a
minimum tax on profits would mean that companies would be less
incentivized to spend money on things that Congress wants to
promote, such as R&D or renewable energy, because they wouldn’t
be able to claim those tax breaks."

Biden’s call for $1 trillion in new infrastructure spending is
also about four times as high as the new spending included in
Republicans’ latest offer. Republicans have said that Biden told
them previously that existing spending plans could count toward the
total, and their most recent $928 billion plan included about $257
billion in new outlays. The GOP plan calls for using unspent Covid
relief funds and user fees for drivers to cover the costs of the
infrastructure package.

What’s next: "The GOP is considering another counteroffer
that could come as soon as Friday, when Capito will be talking to
Biden again, this time likely by phone. It’s unclear what that
would look like — or even whether Republicans will make a new
proposal," Politico
reported Thursday morning, noting that some
Republicans involved in the talks "are starting to feel
discouraged."

Number of the Day: 25 Million

The Biden administration has announced that it plans to send at
least 80 million doses of Covid-19 vaccine from U.S. stockpiles to
other countries, and on Thursday the White House
released its plan for sharing the first 25 million
doses.

About 19 million doses will be shared through COVAX, the global
vaccine initiative affiliated with the World Health Organization; 6
million will go to South and Central America, 7 million to Asia and
5 million to Africa. The other 6 million doses will be sent
directly to what the White House referred to as "regional
priorities and partner recipients," a group that includes Mexico,
Canada, the Republic of Korea, West Bank and Gaza, Ukraine, Haiti,
Egypt, Jordan, India, Iraq, and Yemen.

Moving forward, the White House plans to share about 75% of its
donated vaccines through COVAX, with the other 25% going toward
"immediate needs and to help with surges around the world."

More Progress in the Labor Market

Initial jobless claims hit another pandemic low last week, the
Labor Department announced Thursday, with applications in state
systems falling to 385,000. Another 76,000 people applied for
Pandemic Unemployment Assistance, the temporary federal program
that aids self-employed and gid workers, bringing the total to
461,000.

"Claims are steadily coming down as the labor market
strengthens," said
Heidi Shierholz of the Economic Policy Institute. "Total initial
claims are now around 40% what they were the first week of March,
just shy of three months ago. This is a remarkable
improvement."

Joseph Brusuelas, chief economist at the consulting firm RSM,

said the report is another sign that the U.S.
economy is making a transition from recovery to growth, with full
employment on the horizon.

Still, initial claims are still more than twice what they were
before the pandemic, and the labor market still shows signs of
unusual distress. "While the initial jobless claims report is
encouraging," Brusuelas wrote, "there are still 15.4 million people
on some form of unemployment insurance, including 3.46 million on
regular state benefits, 6.3 million on federal Pandemic
Unemployment Assistance and 5.29 million on Pandemic Emergency
Unemployment Compensation."

Government to Small Business Owners: No Relief
for You, You’re Dead!

The Shuttered Venue Operators Grant program, a federal effort
created by Congress last year to provide $16 billion in aid to
performance spaces that had to shut down during the Covid pandemic,
has started to distribute funds, providing a lifeline to a subset
of small business owners across the country. But the program took
months to get off the ground and continues to be hounded by an odd
problem: the federal government thinks some of its applicants are
dead, even though they are very much alive.

The New York Times’ Ben Sisario, Stacy Cowley and Julia Jacobs
report:

Bob Hansan, the managing partner of Bobby McKey’s, a piano bar
near Washington, received a cryptic email Tuesday afternoon that
began: "Your name appears on the Do Not Pay list with the Match
Source DMF."
A few minutes of frantic Googling revealed that was a
reference to the government’s Death Master File, a record of more
than 83 million people whose deaths have been reported to the
Social Security Administration.
Mr. Hansan immediately called Social Security’s headquarters,
which referred him to his local office, which told Mr. Hansan that
they could find no record of his name anywhere on the death list.
The office agreed to send him a form affirming that he’s alive, but
the document can only be sent by mail, he was told — a process he
worries will be slow.
"It’s this continual drip-drop of delays," he said.

Another applicant, Michael Swier, the founder of the Bowery
Ballroom and the Mercury Lounge in New York City, also was recently
told that he is dead as far as the government is concerned,
resulting in a denial of his grant application.

"What do I do? What kind of proof do they need?" Swier asked the
Times. "Can I say over the phone, ‘It’s me’?"

The Small Business Administration, which runs the grant program,
told him the problem was out of their hands.


Read the full story at The New York Times.

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