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April 19, 2021

GOP Will Counter White House Infrastructure Proposal

Republican opposition to President Joe Biden’s $2.25 trillion infrastructure package continues to grow due to the inclusion of a corporate tax rate increase and the proposal’s overall price tag.

After a bipartisan meeting at the White House, for example, Sen. Roger Wicker (R-Miss.) said, “I did tell the president he has a very hard sell on raising the corporate tax rate. Sen. Wicker referred to the 2017 law that reduced the rate. The senator told the president that he “viewed that 2017 tax bill as one of our signature legislative achievements” and something that “is responsible for us having 3.5 percent unemployment and really great economic news right up until the COVID-19 pandemic.”

The opposition is why some Republican lawmakers are now preparing their own infrastructure outline.

The senators say their plan will not raise corporate taxes, will be narrower in scope, and will cost much less. Sen. Shelley Moore Capito (R-W.Va.) is leading that effort. She said Republicans agree that roads, bridges, transit, waterways, and broadband all need to be upgraded, but they will not repeal tax cuts that were enacted in 2017.

According to The Hill, Sen. Moore Capito is pushing for a compromise proposal that could fall between $600 billion to $800 billion over five years and will be paid for with unspecified user fees. (Also last week: White House press secretary Jen Psaki said that a gas tax increase will not be part of any plan the White House will accept.)

Republicans also plan to include provisions to make it easier for infrastructure projects to meet environmental and other reviews.

Will this approach attract moderate Democrats like Sen. Joe Manchin (D-W.Va.) who have said they will not agree to President Biden’s proposed corporate tax increase? That remains to be seen. According to The Hill, Sen. Manchin has not endorsed a scaled-down infrastructure bill. In fact, he said, “We’re going to do whatever it takes. If it takes $4 trillion, I’d do $4 trillion but we have to pay for it.”

Read more here.

Democratic and Republican House members, meanwhile, are forming a bipartisan group to push for a repeal of the $10,000 cap on state and local tax deductions as part of the infrastructure discussions.

House Democrats from California also sent a letter to President Biden last week asking that he undo the SALT cap in infrastructure legislation. The lawmakers argued, “The removal of this arbitrary cap is necessary and prudent as we seek remedies to help the American people during this time of recovery.”

Already, several House lawmakers have said they will not vote for the president’s infrastructure bill if it does not allow Americans to deduct more of their state and local taxes from their federal returns.