SPONSORED:

Norquist warns GOP: Don’t link taxes, infrastructure

Norquist warns GOP: Don’t link taxes, infrastructure
© Greg Nash

Anti-tax crusader Grover Norquist and other prominent conservatives are urging President Trump and congressional Republicans to keep infrastructure spending out of a tax-reform bill.

Trump has floated linking the two issues together in a bid to win bipartisan support for a $1 trillion package that would revitalize the nation’s roads, bridges and airports.

ADVERTISEMENT

Some lawmakers have expressed support for the idea, including fiscal conservatives wary of increased government spending.

But other conservatives worry that tackling infrastructure and tax reform at the same time could make it harder to cut taxes. They say Republicans don’t need Democratic support to pass tax reform and shouldn’t squander the opportunity to enact historic changes.

In an interview with The Hill, Norquist — who has the ear of GOP leadership — said that it only makes sense for Republicans to try to make a tax bill more appealing to Democrats if it would lead to eight Senate Democrats supporting the legislation, which is unlikely.

Most legislation needs 60 votes to overcome a filibuster in the Senate, and Republicans only hold 52 seats.

But Republicans could also stay on the path of passing tax-reform legislation using budget reconciliation, which would subject a bill to additional rules but allow it to clear the Senate with only 51 votes.

“A strong, pro-growth tax reform is unlikely to attract [Democrats],” Norquist said. “You don’t need to do this with 60 votes — you can do it inside reconciliation, so you don’t need to attract Democrats.”

During the Obama administration, there was talk in Congress of an international tax-reform bill that would use tax revenue from the repatriation of businesses’ foreign earnings to fund infrastructure.

But Norquist said that just because Republicans were open to that idea when Barack ObamaBarack Hussein ObamaObama to campaign for Biden in Florida Jaime Harrison on Lindsey Graham postponing debate: 'He's on the verge of getting that one-way ticket back home' Quinnipiac poll reports Biden leading Trump by 8 points in Pennsylvania MORE was president doesn’t mean “you revisit the negotiation starting from the same place” now that Trump is in the White House.

Norquist, the president of Americans for Tax Reform, is generally on the same page as congressional GOP leadership on tax issues, and his opinion carries weight with lawmakers. He was one of several conservative leaders at a meeting with Speaker Paul RyanPaul Davis RyanMcCarthy faces pushback from anxious Republicans over interview comments Pelosi and Trump go a full year without speaking Jordan vows to back McCarthy as leader even if House loses more GOP seats MORE (R-Wis.) last month.

Other conservative leaders are also skeptical of linking tax reform and infrastructure.

Adam Brandon, the president of FreedomWorks, said he is worried about what projects might end up in infrastructure legislation.

“We’re very nervous about bridges to nowhere,” he said. 

Andy Roth, vice president for government affairs at the Club for Growth, said that voters are frustrated with Congress passing large bills that combine multiple issues.

“I think people prefer to have a single issue thoroughly and openly debated,” he said.

Coupling Trump’s rebuilding plan with tax reform will only result in watered-down versions of each priority, conservative groups say.

Some are concerned that the negotiations that would be required to win Democratic support would result in final legislation that looks nothing like the original proposals.

“It’s a bad idea,” said Marc Scribner, a senior fellow at the Competitive Enterprise Institute. “You’re going to end up with something that nobody’s going to be really happy with: mediocre tax reform and a mediocre infrastructure bill.”

Transportation advocates worry that attaching an infrastructure package to a complicated tax overhaul will make Trump’s national rebuilding proposal an afterthought. 

“Whenever you start talking major tax reform, whatever else you’re tying it to becomes secondary,” Scribner said. “We need long-term solutions. What we’re going to end up with is more can-kicking.”

Trump signaled in a recent New York Times interview that he is considering speeding up the timeline for his rebuilding plan and pairing it with tax reform because infrastructure is “so popular” among lawmakers.

Tax writers in Congress have been hesitant to back using some form of repatriation for infrastructure spending, though they have been willing to entertain the idea.

Norquist said that money that would go to infrastructure couldn’t be used for tax reform, which “makes tax reform more difficult and much less pro-growth.”

But there are other GOP lawmakers and conservative influencers who view the possibility of a joint tax-reform and infrastructure package favorably.

Stephen Moore, a Heritage Foundation economist who was involved in crafting Trump’s campaign tax plan, has argued that Congress should quickly pass a bill that includes business tax cuts and an infrastructure fund and tackle tax changes for individuals later.

Sen. John ThuneJohn Randolph ThuneGOP coronavirus bill blocked as deal remains elusive Clyburn predicts action on coronavirus relief after elections GOP to Trump: Focus on policy MORE (R-S.D.), chairman of the Commerce, Science and Transportation Committee and the Senate’s No. 3 Republican, said a combined package would provide each party an incentive to support something they may otherwise oppose.

“The best path to get both across the finish line might be that,” Thune told reporters last month.

The biggest fear among Democrats who support linking infrastructure and taxes is that a standalone tax overhaul will use up all the money from repatriation, thus taking one of the preferred transportation funding tools off the table.

“If you sequence these things, so you do tax reform first and infrastructure second … the chances of the people doing tax reform setting aside some money for some future infrastructure discussion are nonexistent,” Rep. John Delaney (D-Md.) said during a recent meeting with reporters.

“Unless infrastructure has a seat at the table, it will be much harder.”