The initial part of the sausage-making on President Joe Biden's proposal to invest some $4 trillion in the nation's future has begun, and the more special interest groups worm their way into the discussion, the more skittish some congressional Democrats are getting.
The thing to remember as this messy process plays out is that Biden himself already called compromise "inevitable," full well knowing how much give-and-take would be necessary to wrestle such monumental changes into law.
Biden has also articulated two red lines that have left the White House lots of room to maneuver: "Inaction is simply not an option," Biden said at the White House last month. Speaking at the White House again last week, Biden added that whatever shape his proposal ends up taking, he's committed to finding a way to fund it that doesn't involve ballooning that national debt the way Republicans did when they gave the nation's wealthiest a giant tax cut in 2017.
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"I’m willing to compromise," Biden said, "But I’m not willing to not pay for what we’re talking about. I’m not willing to deficit spend. [Republicans] already have us $2 trillion in the hole." In a nod to compromise, Biden also indicated last Thursday that he thought the corporate rate should be set somewhere between 25% and 28%—a level that appeared designed to appease Democratic Sen. Joe Manchin of West Virginia, who had balked at rolling back the GOP’s 2017 corporate tax cut to 28%.
This week, Biden is hosting a series of lawmakers at the White House to discuss his proposals, including senators from both sides of the aisle. The Washington Post reports that the White House is starting to get push back from some Democrats as special interests chip away at the idea of increasing taxes for anyone on the planet. Biden has proposed several ways to pay for his plans: raising the corporate tax rate, increasing the capital gains tax paid by certain investors, clamping down on tax cheats, and overhauling taxes on multinational corporations with the main goal of eliminating incentives to move profits and jobs overseas.
Here's a rundown of some of the hurdles the Post is reporting on the Democratic side:
So, in essence, Biden's plans to raise revenues for his proposals are facing death by a thousand cuts at this point. That said, all of this was entirely predictable and certainly hasn’t come as a shock to the White House. Even before these wrangling really kicked off, the White House circulated a memo to Democrats titled, “The American People Support President Biden’s Tax Proposals.”
“If critics want to turn this into a debate over taxing the wealthy and big corporations to pay for investments in the middle class, we’re happy to have that fight,” one White House official told Politico Playbook late last month. “The American public is squarely on our side—it’s not even close.”
That is true, and President Biden already seems to be relishing taking this fight to the American people. That's because poll after poll has shown that Americans want major corporations and the nation's wealthiest individuals to pay their fair share. Besides that, Democrats have already given the vast majority of Americans a giant tax cut tucked inside the American Rescue Plan—and not a single Republican voted for it.
But leveling the playing field so that everyone pays their fair share is just the icing on the cake. The cake itself is the very popular proposals included in both of Biden's jobs and family plans, and the more the White House and Democrats talk about those proposals, the better. Creating millions of jobs to revolutionize the nation's ailing infrastructure and offering universal pre-K are the kinds of initiatives that congressional majorities are built on and will give Democrats a real shot at maintaining control of Congress next year.
The thing to remember as this messy process plays out is that Biden himself already called compromise "inevitable," full well knowing how much give-and-take would be necessary to wrestle such monumental changes into law.
Biden has also articulated two red lines that have left the White House lots of room to maneuver: "Inaction is simply not an option," Biden said at the White House last month. Speaking at the White House again last week, Biden added that whatever shape his proposal ends up taking, he's committed to finding a way to fund it that doesn't involve ballooning that national debt the way Republicans did when they gave the nation's wealthiest a giant tax cut in 2017.
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"I’m willing to compromise," Biden said, "But I’m not willing to not pay for what we’re talking about. I’m not willing to deficit spend. [Republicans] already have us $2 trillion in the hole." In a nod to compromise, Biden also indicated last Thursday that he thought the corporate rate should be set somewhere between 25% and 28%—a level that appeared designed to appease Democratic Sen. Joe Manchin of West Virginia, who had balked at rolling back the GOP’s 2017 corporate tax cut to 28%.
This week, Biden is hosting a series of lawmakers at the White House to discuss his proposals, including senators from both sides of the aisle. The Washington Post reports that the White House is starting to get push back from some Democrats as special interests chip away at the idea of increasing taxes for anyone on the planet. Biden has proposed several ways to pay for his plans: raising the corporate tax rate, increasing the capital gains tax paid by certain investors, clamping down on tax cheats, and overhauling taxes on multinational corporations with the main goal of eliminating incentives to move profits and jobs overseas.
Here's a rundown of some of the hurdles the Post is reporting on the Democratic side:
- Rep. Sean Maloney of New York, who's heading up House Democrats’ midterms efforts, has "privately" warned that raising taxes could hurt some 30 "front line" Democrats in vulnerable districts. Democratic leadership, however, remains committed to the proposals, suggesting they haven't yet heard widespread opposition from those vulnerable Democrats.
- Overhauling taxation of multinational corporations is getting the silent treatment from some powerful House Democrats while several high-profile Senate Democrats—Senate Finance Committee Chairman Ron Wyden of Oregon, Senate Banking Committee Chairman Sherrod Brown of Ohio, and Sen. Mark Warner of Virginia—have released an alternate international tax proposal that significantly changes global taxation but wouldn't outright repeal the system set up by the GOP's 2017 tax law. But Neil Bradley, executive vice president of the U.S. Chamber of Commerce, says the organization has "had success educating members," as in trying to kill that portion of Biden's Made in America Tax Plan, which stands to raise more than $1 trillion in revenue.
- Biden’s proposal to roughly double the amount of capital gains paid by investors who earn more than $1 million a year is meeting with some resistance from Sen. Warner and Sen. Bob Menendez of New Jersey, who both sit on the Senate Finance Committee and think doubling the rate might be a little excessive. According to the White House, the change would affect about 0.3 percent of taxpayers.
- About a dozen centrist Democrats led by Rep. Cindy Axne of Iowa—including a contingent from farm states—are raising concerns about increasing taxes on assets passed down to heirs which could impact family farms. The White House has reportedly signaled an openness to exempting family farms from the tax.
- Several House Democrats have also indicated they wouldn't support Biden's proposals unless they also repeal a cap put in place by the GOP tax law on how much in state and local taxes Americans can deduct on their annual federal returns.
So, in essence, Biden's plans to raise revenues for his proposals are facing death by a thousand cuts at this point. That said, all of this was entirely predictable and certainly hasn’t come as a shock to the White House. Even before these wrangling really kicked off, the White House circulated a memo to Democrats titled, “The American People Support President Biden’s Tax Proposals.”
“If critics want to turn this into a debate over taxing the wealthy and big corporations to pay for investments in the middle class, we’re happy to have that fight,” one White House official told Politico Playbook late last month. “The American public is squarely on our side—it’s not even close.”
That is true, and President Biden already seems to be relishing taking this fight to the American people. That's because poll after poll has shown that Americans want major corporations and the nation's wealthiest individuals to pay their fair share. Besides that, Democrats have already given the vast majority of Americans a giant tax cut tucked inside the American Rescue Plan—and not a single Republican voted for it.
But leveling the playing field so that everyone pays their fair share is just the icing on the cake. The cake itself is the very popular proposals included in both of Biden's jobs and family plans, and the more the White House and Democrats talk about those proposals, the better. Creating millions of jobs to revolutionize the nation's ailing infrastructure and offering universal pre-K are the kinds of initiatives that congressional majorities are built on and will give Democrats a real shot at maintaining control of Congress next year.