Biden sets off Capitol Hill scramble on spending, taxes
President Biden’s rollout of a sweeping $2.25 trillion infrastructure plan is setting off a scramble by Democrats on Capitol Hill to get the bill across the finish line.
Passing the bill — which includes massive spending on transportation, broadband, the nation’s water supply and manufacturing — will be a months-long slog laced with potential pitfalls as Democrats lean on their razor-thin majorities in both chambers.
Unlike the recent coronavirus debate, where Congress passed a $1.9 trillion package just weeks ago, Democrats won’t be able to rally around a public health emergency to unify their members. And there are already signs that Biden and congressional leadership could face headaches from different factions in the party.
Here are five things to watch as Congress plots its path forward.
Can the proposal get any GOP support?
If Biden can pick up GOP support, it will be a big win after going it alone on COVID-19 relief and allow him to tout the bipartisan dealmaking skills he talked up during the presidential campaign.
But so far, top Republicans are signaling they aren’t likely to support his plan, particularly if it’s all pieced together as one package.
Biden called Senate Minority Leader Mitch McConnell (Ky.) this week to discuss his proposal, the Republican senator disclosed to reporters on Wednesday.
But McConnell said he was “not likely” to support the final product, comparing it to a “Trojan horse.”
“It’s called infrastructure, but inside the Trojan horse is going to be more borrowed money and massive tax increases,” he said.
Biden’s proposal includes raising the corporate tax rate from 21 percent, a level decided by Republicans in 2017, to 28 percent. Top GOP senators have warned it would be tough to get any Republicans to vote for raising taxes, even as they’ve also panned the idea of paying for a large infrastructure package through deficit spending.
If Biden could peel off just a few GOP lawmakers, it could help ease pressure on getting the eventual bill through both the House and Senate, where Democrats have narrow majorities and members with competing interests that could complicate holding the party together on infrastructure.
One idea that has been discussed is breaking the proposal into multiple pieces, and passing what could get bipartisan support as one component. From there, Democrats could use the budget reconciliation process, allowing them to avoid a GOP filibuster, for the rest of the legislation.
In a blow to hopes of garnering bipartisan support, Sen. Rob Portman (R-Ohio), a member of the Senate’s bipartisan gang, criticized Biden’s proposal as including “broad policy priorities that are a far cry away from what we’ve ever defined as infrastructure.”
Can Biden satisfy progressives?
Biden’s plan falls short of what more liberal Democrats and progressive groups were hoping for, and they are already exerting pressure to try to get him to go bigger.
Congressional Progressive Caucus Chair Pramila Jayapal (D-Wash.) called Biden’s proposal a “first step” and said “more must be done on this initial framework,” including merging the infrastructure component with a forthcoming second proposal focused on health care and child care.
“We believe this package can and should be substantially larger in size and scope,” she said.
The push for one big package, instead of multiple bills, was echoed by outside groups, with the advocacy group Indivisible saying, “Congress must be bold and push for one inclusive Recovery package.”
Biden’s plan to increase the corporate tax rate to 28 percent is also below the 35 percent pushed for in a proposal released last week by Senate Budget Committee Chairman Bernie Sanders (I-Vt.). The rate was 35 percent before Republicans lowered it to 21 percent in their 2017 bill.
Senate Finance Committee Chairman Ron Wyden (D-Ore.) said that he and Biden are “rowing in the same direction” on overhauling part of the 2017 GOP tax bill, but he added that he will “be introducing my own framework to overhaul international taxation” with Sens. Sherrod Brown (D-Ohio) and Elizabeth Warren (D-Mass.).
What will Joe Manchin do?
If the first three months of the 117th Congress have offered any lessons it is this: If there’s a policy fight to be had on Capitol Hill, Sen. Joe Manchin (D-W.Va.) will be in the middle of it. The debate on Biden’s infrastructure plan will be no different.
The administration appears to have put pieces of the package in place with Manchin in mind, including money for mine redemption.
In a 50-50 Senate, and if Democrats are going to go it alone, Manchin’s vote will be crucial, a fact illustrated after the recent coronavirus bill was stuck in limbo for hours as Biden and leadership tried to nail down his support.
Biden’s push to increase the corporate tax rate to 28 percent exceeds Manchin’s stated preference of 25 percent. But a bigger headache could be that Manchin has indicated that he wants to see a sincere effort to make the infrastructure bill bipartisan.
He’s not the only potential hurdle for Biden and congressional leadership from their moderate flank.
A growing number of House Democrats are threatening to withhold support unless it includes the repeal of a rule that caps state and local tax (SALT) deductions at $10,000, a provision that was enacted as part of the 2017 tax law signed by former President Trump to help offset the cost of some of the tax cuts in the GOP package that year.
Democratic Reps. Thomas Suozzi (N.Y.), Bill Pascrell (N.J.) and Josh Gottheimer (N.J.) on Tuesday issued a joint statement vowing to oppose any efforts to change the tax code unless the earlier SALT deduction is restored.
House Democrats can only afford three defections with their razor-thin majority and still pass legislation on their own without any GOP support.
What’s the timeline for taking it up?
Biden’s speech is effectively Congress’s starting gun for passing an infrastructure package, but it’s still expected to take months to all come together.
Speaker Nancy Pelosi (D-Calif.) reportedly told Democrats during a conference call this week that she would like to pass infrastructure legislation by July 4, though that isn’t a hard deadline. That could set up Senate floor action for late July or August.
The House would need to pass a bill by the end of July, and the Senate the first week of August, in order to stick with their plans to take a weeks-long summer recess and leave town until mid-to-late September.
Ahead of floor action, the House Transportation and Infrastructure Committee is expected to take up a surface transportation reauthorization this spring and the Senate Environment and Public Works Committee wants to advance an infrastructure bill by the end of May.
Can Democrats avoid the filibuster for a third time?
As Democrats plot their strategy for passing Biden’s Build Back Better plan, they are mulling whether they can pass a third bill under the budget reconciliation process, which allows them to avoid the 60-vote legislative filibuster in the Senate.
Democrats were expected to only be able to pass two bills under the fast-track budget rules this year, and have already used one of those when they passed the coronavirus relief bill earlier this month. Top lawmakers had indicated that they expected the infrastructure bill to be the second.
But Senate Majority Leader Charles Schumer (D-N.Y.) is exploring whether Democrats could pass a third bill that way, with top aides making the argument to the parliamentarian that the Congressional Budget Act paves the way for such a step. Schumer hasn’t decided on a legislative strategy and he would need the parliamentarian’s blessing before taking that approach.
“Schumer wants to maximize his options to allow Senate Democrats multiple pathways to advance President Biden’s Build Back Better agenda if Senate Republicans try to obstruct or water down a bipartisan agreement,” an aide said.
The procedural shuffling comes as Biden is breaking his infrastructure plan into two parts. In addition to the component he outlined on Wednesday, he’s expected to unveil a second piece this month focused on child care and health care.
White House press secretary Jen Psaki told “Fox News Sunday” that there would be “two separate proposals and we’ll work with the Senate and the House to see how it should move forward.”