President Joe Biden is ramping up pressure on Republicans to support his $2.25 trillion infrastructure plan, appealing directly to GOP voters while lawmakers are in their home districts during the current congressional recess.
Biden will deliver his second major sales pitch in a week for the “American jobs plan” with a White House speech Wednesday, as he and his team reach out to governors, mayors and the broader public through phone calls, briefings and local TV appearances to make their case.
In addition to emphasizing the need for urgency, with the pandemic exposing weaknesses that left millions of families struggling, Biden in his Wednesday remarks will argue that infrastructure needs go far beyond just roads and bridges, a White House official said. Biden will also reiterate that his proposed investments, spanning broadband to an upgrade of the electrical grid, are key to successfully compete with China, the official said.
White House aides have said they want Congress to make significant progress on an infrastructure bill by Memorial Day. House Transportation and Infrastructure Committee Chair Peter DeFazio said Tuesday his panel aims to complete its part “probably” in the third week of May.
White House Press Secretary Jen Psaki said Biden will host lawmakers in the Oval Office to exchange views on the plan. But the White House is also prepared to use a budget measure called reconciliation that would allow Democrats -- as long as they stay unified in the 50-50 Senate -- to pass a bill without any Republican support.
Read more: Biden Team Seeks Public’s Help to Beat GOP on Infrastructure
Republican lawmakers have blasted Biden’s plan, calling it too large after his $1.9 trillion pandemic-relief bill and saying it would damage the economy with the proposed corporate-tax hikes to help fund it. The White House is hoping to make an end-run around that criticism through public appeals.
“We hope that Republicans can join their constituents across the country in supporting this effort,” Energy Secretary Jennifer Granholm said Sunday on CNN’s State of the Union. “Ultimately, if that doesn’t happen, he is elected to do the job, to win the future for America, to invest in our people.”
What Bloomberg Economics Says:
The infrastructure package boosts annual fixed investment in the economy by about 6%. This is a game enhancer, not a game changer -- a non-negligible amount that may be sufficient to move the needle (slightly) on longer term potential growth, particularly to the extent that the plan addresses hurdles to productivity growth that the private sector was incapable of addressing.
--Carl Riccadonna, Yelena Shulyatyeva, Andrew Husby and Eliza Winger. For full analysis, click here
Meantime, Biden is already having to deal with dissension among Senate Democrats. Progressives want the plan to be bigger, while moderates such as Senator Joe Manchin of West Virginia oppose raising the corporate tax rate to 28% from 21%, as Biden has outlined. He would prefer a corporate rate of 25%, he said.
“If I don’t vote to get on it, it is not going anywhere,” Manchin told a local news outlet on Monday. “It’s more than just me. There are six or seven other Democrats that feel strongly about this. We have to be competitive and we are not going throw caution to the wind.”
Transportation Secretary Pete Buttigieg said Wednesday on MSNBC that he’s put a call in to Manchin to “understand how he thinks the best way to pay for this would stack up.”
Biden in his Wednesday remarks will invite lawmakers from both sides of the aisle to pitch ways to improve on the plan he’s laid out -- but will challenge critics to explain why it’s acceptable that 91 of the biggest corporations paid no federal taxes in 2019, the White House official said.
Republican Opposition
Republicans spent the early part of the week mulling the best way to fight. Many GOP members expressed disappointment they weren’t able to have more say in the $1.9 trillion pandemic-relief bill that Biden signed last month. They said they wanted to avoid that outcome with the infrastructure package, but at the same time they want it to focus only on the most traditional items, such as roads and bridges.
Earlier: White House to Have States Compete for 10 Biggest Bridge Fixes
Republican lawmakers, conservatives and some business groups are starting to form coalitions to counter Biden’s proposal.
Conservatives including Marc Short, former Vice President Mike Pence’s chief of staff, who is now leading the Coalition to Protect American Workers argue that raising corporate taxes and spending trillions of dollars could lead to job losses.
“When the Biden-Obama stimulus passed, it took us three years to get under 7% unemployment,” Short said in an interview.
Many lobbyists consider the corporate rate would ultimately end up around 25% if Congress does end up passing a version of the package. But GOP lawmakers and lobbyists are less certain about combating changes Biden has proposed to the global minimum tax, which they say are too complicated to counter neatly in a slogan or ad.
Read More: Biden Tax Plan Seen Hitting Tech, Pharmaceutical Companies
One Republican lobbyist argued that Republicans, conservatives and other groups have plenty of time to coalesce around a few messages to beat back parts of the package. They believe passing anything by July 4 -- a timeline laid out by House Speaker Nancy Pelosi -- is overly optimistic.
But even the business community isn’t united, with Amazon.com Inc. Chief Executive Officer Jeff Bezos saying Tuesday that he supported investing in U.S. infrastructure and a hike in the corporate tax rate to help pay for it -- while stopping short of specifying what new rate he’d support.
Read More: Bezos Supports Infrastructure Investment, Corporate Tax Hike
The day before the president’s latest speech on the infrastructure plan, the White House touted a letter signed by 70 economists supporting the plan. Aides also tweeted a poll showing 57% of Republicans supported Biden’s proposal.
Wall Street analysts anticipate months of talks, concluding with potentially one giant bill that also wraps in the “American families plan” -- a package of social spending and tax hikes on individuals and wealthy households that Biden will lay out in coming weeks.
“We expect enacted tax hikes will be lower than proposed given procedural constraints and the stated position of sufficient Democratic members of Congress,” Morgan Stanley analysts led by Michael Zezas wrote in a recent note to clients. “Yet we expect AJP spending levels to mostly hold, as proposals focus on topics that appear to have consensus support among Democrats and can make it through the budget reconciliation process.”
— With assistance by Josh Wingrove
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