McConnell Rules Out Backing for Tax-Funded Infrastructure
(Bloomberg) -- Senate Minority Leader Mitch McConnell said there was no chance Republicans would back any tax increases to pay for President Joe Biden’s infrastructure plan, leaving Democrats to try to force through a package on their own.
“I don’t think there’s going to be any enthusiasm on our side for a tax increase,” the Kentucky Republican said.
He predicted Democrats would have to employ the same budgetary maneuver, known as reconciliation, that they used to pass Biden’s $1.9 trillion stimulus package with a simple majority vote. He said he expected a massive package with infrastructure would be a “Trojan horse” that also includes tax hikes and other Democratic priorities.
While there is Republican support for infrastructure projects, the White House is looking at a broad package that includes longer-term economic stimulus and could run into the trillions of dollars. The administration aims to pay for it in part through a wide swath of tax increases on businesses and individuals earning more than $400,000, including rolling back some of former President Donald Trump’s 2017 tax cuts. A corporate tax increase to 28%, higher levies on offshore business profits, a broader estate tax, and higher capital gains taxes for wealthy individuals are all under consideration.
McConnell’s declaration could give Democrats including Joe Manchin of West Virginia — who had been insisting on at least trying to bring Republicans in on an infrastructure plan — a reason to more quickly move forward on their own. Some Democrats view it as the last chance to pass a bold package of legislation before mid-term election campaign gets under way.
White House press secretary Jen Psaki told reporters Tuesday that Biden believes “there can be and should be bipartisan support” for infrastructure. “And as conversations continue, he’s certainly hopeful there’s an opportunity for that.”
Democrats haven’t ruled out using reconciliation for the infrastructure plan. That would let them pass a bill without Republican support in the Senate, but would limit it to provisions that affect revenue or spending.
Democratic Senator Ben Cardin of Maryland was recorded on an open C-SPAN microphone Monday telling Transportation Secretary Pete Buttigieg after an event Monday that Democrats would “most likely have to use reconciliation” on infrastructure because of Republican resistance.
Virginia Democrat Tim Kaine said convincing even moderate Republicans to go along with any tax increases would be an uphill battle, especially given the influence of anti-tax activists like Grover Norquist on the GOP.
“If Trump had embraced a payfor the Republicans would have gone for it. They love Grover Norquist but they love Trump more,” Kaine said.
Democrats have announced that earmarks -- special projects favored by individual lawmakers -- will be included in the infrastructure proposal, something that allows bargaining to fund particular priorities for individual lawmakers. But Republicans are still discussing among themselves whether to participate and that may not overcome opposition to tax increases.
It’s been decades since Congress passed a significant bipartisan tax increase. The gasoline tax, which pays for highways, hasn’t been increased since 1993.
Rather than raise taxes, most Senate Republicans including McConnell are backing a complete repeal of the estate tax, which hits estates exceeding $11.7 million and double that for couples.
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