With President Biden signing the American Relief Plan last week, congressional Democrats are eager to move on to their next big agenda item: an infrastructure and jobs package, which the White House refers to as the "Build Back Better" plan. As difficult as the COVID relief package was to pass, one thing made it slightly easier: it was obvious from the start that it would be deficit financed.
On infrastructure, it's a very different story.
Indeed, Sen. Joe Manchin (D-W.Va.), arguably Congress' most conservative Democrat, has expressed support for an ambitious infrastructure bill, but he's also said he expects at least some of its cost to be offset by new revenue. Sens. Jon Tester (D-Mont.) and Angus King (I-Maine) have made similar comments.
With this in mind, Bloomberg News reported this week that the president expects "tax hikes will be a component" of his infrastructure and jobs blueprint. Soon after, White House Press Secretary Jen Psaki told reporters that while the details of the plan are still coming together, Biden remains focused on "people paying their fair share and also focusing on corporations that may not be paying their fair share."
She added, "The president remains committed to his pledge from the campaign that nobody making under $400,000 a year will have their taxes increased."
In other words, Biden and his team appear to be moving forward with a infrastructure and jobs plan that will likely include some tax hikes on the wealthy and an increase in the corporate tax rate, which was slashed by Republicans in 2017.
Is this the sort of thing GOP lawmakers might consider? The conservative Washington Times reported overnight:
Sen. Susan Collins, Maine Republican, burst out laughing when asked how Senate Republicans would react to Mr. Biden's tax proposals. "I would not anticipate that it would be well received," said Ms. Collins, who ran point for a group of Senate Republicans who were trying to strike a deal with Mr. Biden on the coronavirus relief package.
While I didn't personally see the senator's reaction, other reporters also heard Collins laugh when asked how her party would react to a proposal that included tax increases.
Or put another way, the Maine Republican, when considering whether GOP officials might accept new revenue to pay for infrastructure, found the idea literally laughable.
The result is a puzzle with a tricky solution. Several members of the Senate Democratic caucus are determined to offset the costs of an infrastructure package with tax hikes on the wealthy and big corporations, while most Republicans will oppose any plan that raises any tax on anyone at any time for any reason.
There is, however, a legislative tactic that could get the job done -- which is the same legislative tactic that made it possible to pass the American Rescue Plan. Politico reported yesterday, "Sen. Ben Cardin, a senior Democrat on the committee responsible for crafting a surface transportation bill, in a 'hot mic' moment told Transportation Secretary Pete Buttigieg Monday that Democrats will likely have to use budget reconciliation for their infrastructure plans, citing expected resistance from Republicans."
The overheard comments were notable, but I'd caution against assuming that Cardin is correct. Joe Manchin has said he doesn't want to use reconciliation on an infrastructure bill -- Sen. Bob Casey (D-Pa.), incidentally, has said the same thing -- and on the show last night, Senate Majority Leader Chuck Schumer (D-N.Y.) was noncommittal about the road ahead.
We should get some additional clarity on the process fairly soon. Late last week, House Speaker Nancy Pelosi (D-Calif.) issued a statement calling on "the Chairs of the Committees of Jurisdiction to work with their Republican counterparts to craft a big, bold and transformational infrastructure package."