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Commentary

Don't Be Fooled, Dems' New Infrastructure Offer Still Includes 1 Item That Crosses GOP's Red Line

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The Democrats’ “slimmed-down” infrastructure bill isn’t winning many Republicans over — namely because the Biden administration still refuses to take the corporate tax off the table and the liposuction job just moves the fat around to different parts of the budget.

According to The Washington Post, the $1.7 trillion retooled version of the American Jobs Plan was pitched to roughly a half-dozen Republicans via a phone call on Friday — including West Virginia’s Sen. Shelley Moore Capito, the GOP’s point-person on the infrastructure bill negotiations.

The White House pitched the new proposal as a willingness to compromise.

“This proposal exhibits a willingness to come down in size, giving on some areas that are important to the president,” White House press secretary Jen Psaki said.

However, the concessions were few and, in some cases, merely involved shifting money around.

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For starters, the White House wasn’t willing to budge on a definition of infrastructure that could charitably be described as expansive. Furthermore, the corporate tax hike would stay in the new proposal — something the GOP has said would be untenable.

Biden’s plan would pay for his spending spree — be it $1.7 trillion or $2.3 trillion — in part by raising the federal corporate tax rate to 28 percent from 21 percent.

It’s a bit more complicated than that, though, as former member of the White House Council of Economic Advisers Joseph W. Sullivan pointed out in a Jan. 5 piece for the National Review. When you factor in state and local taxes, that number would jump to 34 percent, tying us with France for the highest corporate tax rate in the G7.

Consider that China has a corporate tax of 25 percent, but for favored firms — particularly tech concerns — the number is 15 percent. That would make American tech firms particularly uncompetitive with our biggest competitor, particularly since the administration’s tax proposal also includes a global minimum tax.

Do you support Biden's infrastructure bill?

Senate Minority Leader Mitch McConnell has said that any infrastructure bill that kept the tax would get zero Republican support.

Furthermore, the $600 billion the Biden administration is supposedly cutting from the plan is potentially going to show up in other legislation, according to anonymous sources cited by The Post, including one bill that’s already working its way through the Senate.

There were glimmers of, if not hope of, at least slight fiscal continence. Requests for actual infrastructure spending would reduce from $159 billion to $120 billion and rural broadband spending would reduce from $100 billion to $65 billion, according to CNBC; on the latter count, that’s a number in line with what the Republicans have said they’re willing to spend on rural internet.

Almost everything else was thoroughly dispiriting, from the sound of things. The Post reported that while Psaki said the proposal represented “the art of seeking common ground,” Sen. Capito — who’s generally been an optimist on striking a deal with the Democrats on infrastructure, a rarity among Republicans — sounded a note somewhere between gloomy and insulted at the White House’s proposal.

Capito said the $1.7 trillion price tag was “well above the range of what can pass Congress with bipartisan support,” coming in at roughly three times the $568 billion the GOP was proposing.

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“Based on today’s meeting, the groups seem further apart after two meetings with White House staff than they were after one meeting with President Biden,” she said, according to CNBC.

On Thursday, Capito told Bloomberg she saw odds better than 50-50 that a compromise could be reached. I’m guessing her numbers might be different now.

Furthermore, the “compromise” made clear the Biden administration wasn’t planning to split up the parts of the American Jobs Plan that dealt with traditional infrastructure — which have some bipartisan support — from the air-quotes “infrastructure” that makes up much of the larded bill.

For instance, the $400 billion for “care infrastructure” — long-term care for the elderly — remains in the package and remains unchanged, according to CNBC.

Workforce training? Funding for electric vehicles? Money for veterans’ hospitals? All still there! All still not infrastructure! And it’s going to be paid for, in part, by corporate taxes that’ll raise prices for consumers as inflation begins to rear its ugly head.

But the White House shifted around some of the spending, shaved some money off of actual infrastructure spending and rural broadband — which is kind of infrastructure if you squint — and sent Jen Psaki out there to call this “the art of seeking common ground.”

It’s not. It’s a shrug emoji and a take-it-or-leave-it message from the White House. It’s arguable this plan is still $1.7 trillion too big, but it’s far from anything that could be considered a compromise.

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C. Douglas Golden is a writer who splits his time between the United States and Southeast Asia. Specializing in political commentary and world affairs, he's written for Conservative Tribune and The Western Journal since 2014.
C. Douglas Golden is a writer who splits his time between the United States and Southeast Asia. Specializing in political commentary and world affairs, he's written for Conservative Tribune and The Western Journal since 2014. Aside from politics, he enjoys spending time with his wife, literature (especially British comic novels and modern Japanese lit), indie rock, coffee, Formula One and football (of both American and world varieties).
Birthplace
Morristown, New Jersey
Education
Catholic University of America
Languages Spoken
English, Spanish
Topics of Expertise
American Politics, World Politics, Culture




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