GOP response puts Biden infrastructure plan on road to reconciliation

McConnell calls it 'Trojan horse' but sees funds for Kentucky bridge

Biden is scheduled to speak about his infrastructure proposal Wednesday in Pittsburgh.   (Bill Clark/CQ Roll Call)
Biden is scheduled to speak about his infrastructure proposal Wednesday in Pittsburgh. (Bill Clark/CQ Roll Call)
Posted March 31, 2021 at 2:56pm

Republican leaders blasted President Joe Biden’s plans for a $2 trillion infrastructure plan as an anti-business, tax-and-spend package that likely will become the second proposal from the president that will have to be pushed through Congress in a partisan reconciliation bill.

House Ways and Means ranking member Kevin Brady, R-Texas, said the spending proposal amounted to an economic “sugar high” that would boost U.S. corporate income tax rates to 28 percent, which would be among the highest in developed countries and would be “worse than China’s” 25 percent base corporate rate. 

Democrats frequently complained that the 2017 tax code overhaul, passed via reconciliation without a single Democratic vote, created a “sugar high” by pumping $1.9 trillion into the economy during an economic boom.

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The White House released details of the infrastructure proposal in advance of Biden’s scheduled 4:20 p.m. speech in Pittsburgh about the plan.

The features drawing the most Republican ire are Biden’s call for the corporate income tax rate to rise to 28 percent from 21 percent and for the 10.5 percent minimum tax rate paid by U.S. multinationals to double.

These changes, though, were well-known features of Biden’s presidential campaign, said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center. Gleckman does not expect the center will have to update its estimate from October, when it said Biden’s business tax proposals would raise $1.1 trillion over 10 years.

“Nobody in corporate America should be surprised,” he said.

The one surprise from the Biden administration was to say the $2 trillion infrastructure package would be paid for with these corporate tax increases over a 15-year period. By statute, Congress measures revenue impacts of tax changes over 10 years.

“I guess they couldn’t make the numbers work over 10,” Gleckman said.

While Republican reactions suggested that Democrats would have to go the reconciliation route again, which would allow Congress to enact tax legislation with just 51 votes in the Senate, the biggest challenges Biden faces could come from Democrats.

Biden’s plan is more modest than independent Vermont Sen. Bernie Sanders’ proposal to restore the 35 percent corporate tax rate, which was in place before the 2017 overhaul. And Biden’s proposal is more aggressive than repeated hints from Sen. Joe Manchin III, D-W.Va., a key moderate, that he would favor a smaller raise, to 25 percent.

Blue Dogs weigh in

The Blue Dog Coalition suggested in a release Wednesday there might need to be some assuaging of its 18 fiscally conservative Democrats as the process on this proposed legislation plays out through the summer. At 219-211 with five vacancies, House Democrats can only lose three votes and still pass legislation without Republican support.

The coalition wrote to House Democratic leaders urging that they “revert to full adherence to the letter and spirit” of House rules that encourage legislation go through the “regular order” of being heard in committee before coming to the floor. There were committee hearings on the various portions of the $1.9 trillion relief package that passed in mid-March. But Republicans complained loudly that legislation was pushed quickly to the floor.

For instance, the $941 billion portion that went through the Ways and Means Committee was marked up in two days with every Republican amendment defeated on a party-line vote.

“The question is, will this be something that's done similar to reconciliation where they just rammed it through, they rejected every Republican amendment, there was no conversation per se in committee,” said Rep. Brad Wenstrup, an Ohio Republican who sits on the tax-writing Ways and Means, speaking Wednesday on Fox Business.

Overall, there were only a handful of comments, statements and tweets from Republicans in reaction to the details of Biden’s plans, as some said they would wait to comment until after the president’s speech.

One that didn’t wait was Senate Minority Leader Mitch McConnell, R-Ky.

“This is not going to be an infrastructure package,” McConnell said at an event in Erlanger, Ky., whose economy was shaken last year when the Brent Spence Bridge, which connects Cincinnati to northern Kentucky, was closed for six weeks after a fiery truck crash.  “It's like a Trojan horse,” McConnell said. “It's called infrastructure, but inside the Trojan horse is going to be more borrowed money and massive tax increases on all the productive parts of our economy."

While saying it was “not likely” he could support Biden’s proposal, McConnell added that he “can’t imagine that somewhere in a multi-trillion-dollar bill there wouldn't be money for the Brent Spence Bridge.”  

Also not waiting were former President Donald Trump and House Speaker Nancy Pelosi, D-Calif.

“This legislation would be among the largest self-inflicted economic wounds in history,” Trump said in a statement. “If this monstrosity is allowed to pass, the result will be more Americans out of work, more families shattered, more factories abandoned, more industries wrecked, and more Main Streets boarded up and closed down.”

Pelosi, though, called the proposal “a visionary, once-in-a-century investment in the American people and in America’s future.”

House Transportation and Infrastructure ranking member Sam Graves, R-Mo., complained that by his calculation “only 25 percent of this package is dedicated to our roads, bridges, transit, rail, airports, ports and other traditional transportation infrastructure.” Most of the bill is for “a wide array of initiatives that would be better considered through thoughtfully crafted, more targeted measures.”

Lindsey McPherson and Jennifer Shutt contributed to this report.