Democrats Look to Smooth the Way for Bidens Infrastructure Plan – The New York Times
WASHINGTON Senior Democrats on Monday proposed a tax increase that could partly finance President Bidens plans to pour trillions of dollars into infrastructure and other new government programs, as party leaders weighed an aggressive strategy to force his spending proposals through Congress over unified Republican opposition.
The moves were the start of a complex effort by Mr. Bidens allies on Capitol Hill to pave the way for another huge tranche of federal spending after the $1.9 trillion stimulus package that was enacted this month. The president is set to announce this week the details of his budget, including his much-anticipated infrastructure plan.
He is scheduled to travel to Pittsburgh on Wednesday to describe the first half of a Build Back Better proposal that aides say will include a total of $3 trillion in new spending and up to an additional $1 trillion in tax credits and other incentives.
Yet with Republicans showing early opposition to such a large plan and some Democrats resisting key details, the proposals will be more difficult to enact than the pandemic aid package, which Democrats muscled through the House and Senate on party-line votes.
In the House, where Mr. Biden can currently afford to lose only three votes, Representative Tom Suozzi, Democrat of New York, warned that he would not support the presidents plan unless it eliminated a rule that prevents taxpayers from deducting more than $10,000 in local and state taxes from their federal income taxes. He is one of a handful of House Democrats who are calling on the president to repeal the provision.
And in the Senate, where most major legislation requires 60 votes to advance, Senator Chuck Schumer of New York, the majority leader, was exploring an unusual maneuver that could allow Democrats to once again use reconciliation the fast-track budget process they used for the stimulus plan to steer his spending plans through Congress in the next few months even if Republicans are unanimously opposed.
While an aide to Mr. Schumer said a final decision had not been made to pursue such a strategy, the prospect, discussed on the condition of anonymity, underscored the lengths to which Democrats were willing to go to push through Mr. Bidens agenda.
The presidents initiatives will feature money for traditional infrastructure projects like rebuilding roads, bridges and water systems; spending to advance a transition to a lower-carbon energy system, like electric vehicle charging stations and the construction of energy-efficient buildings; investments in emerging industries like advanced batteries; education efforts like free community college and universal prekindergarten; and measures to help women work and earn more, like increased support for child care.
The proposals are expected to be partly offset by a wide range of tax increases on corporations and high earners.
In Pittsburgh, Mr. Biden will lay out the first of two equally critical packages to rebuild our economy and create better-paying jobs for American workers, Jen Psaki, the White House press secretary, told reporters on Monday.
Hell talk this week about investments we need to make in domestic manufacturing, R & D, the caregiving economy and infrastructure, she added. In the coming weeks, the president will lay out his vision for a second package that focuses squarely on creating economic security for the middle class through investments in child care, health care, education and other areas.
Mr. Bidens budget office is also expected this week to release his spending request for the next fiscal year, which is separate from the infrastructure plan. White House officials said it would lay out funding levels agency by agency, so that congressional committees could begin to write appropriations bills for next year. For the first time in a decade, they will not be limited by spending caps imposed by Congress. (Lawmakers have agreed to break those caps in recent years.)
That request will not include Mr. Bidens tax plans, the officials said. The administrations full budget will be presented to Congress this spring.
For now, some Democrats are already jockeying to make sure that their proposals are part of the plan.
Senator Chris Van Hollen, Democrat of Maryland, and a group of liberal Democrats on Monday proposed scaling back a provision in the tax code that allows wealthy heirs to reduce what they pay on assets they inherit, known as stepped-up basis. The proposal reflects one of Mr. Bidens campaign promises, and officials have suggested that it could be used to fund his infrastructure plans.
Current law reduces the taxes that heirs owe on assets that appreciate over time. Say a person buys $1 million worth of stock, and the value of that stock rises to $10 million before the person dies. If the person sold the stock before death, she would owe taxes on a $9 million gain. But if she died first, and her heirs immediately sold the stocks she gave them, they would not owe any capital gains taxes. Under the new proposal, which exempts $1 million in gains, the heirs would owe taxes on the remaining $8 million gain.
The full exemption reduces federal tax revenues by more than $40 billion a year. It was unclear on Monday how much the Democratic plan would raise in revenues to help Mr. Bidens spending efforts.
Other Democrats pushed the president to include further tax cuts in his plan.
Mr. Suozzi of New York said in an interview on Monday that he would not support changes to the tax code without a full repeal of the so-called SALT cap, which limits the amount of local and state taxes that can be deducted from federal income taxes. That change largely hurt higher-income households in high-tax states like California, Maryland and New York.
House Democrats passed legislation in 2019 that would have temporarily removed the cap, but it stalled in the Senate and attempts to include it in pandemic relief legislation were unsuccessful.
It has to be elevated as part of the conversation, Mr. Suozzi said. Theres a lot of different talk about going big and going bold and making significant changes to the tax code. I want to make SALT part of the conversation.
He is among the Democrats who have requested a meeting with Mr. Biden to discuss repealing the cap, according to a letter obtained by The New York Times.
No SALT, no dice, declared another Democrat, Representative Josh Gottheimer of New Jersey.
Theres plenty of ways, in my opinion, to raise revenue and reinstate SALT, he said in an interview, adding that he wanted to see the full details of the proposal.
Ms. Psaki said on Monday that administration officials look forward to working with a broad coalition of members of Congress to gather their input and ideas, and determine the path forward, create good jobs and make America more competitive.
While members of both parties have said they support a major infrastructure initiative, Republicans have balked at the details of Mr. Bidens opening bid, which includes not only sweeping investments in traditional public works but also more ambitious proposals to tackle climate change and education, and tax increases to help offset the considerable costs.
Unfortunately, it looks like this is not going to head in the direction I had hoped, Senator Mitch McConnell of Kentucky, the minority leader, said at an event in his state. My advice to the administration is: If you want to do an infrastructure bill, lets do an infrastructure bill. Lets dont turn it into a massive effort to raise taxes on businesses and individuals.
Id love to do an infrastructure bill, he added. Im not interested in raising taxes across the board on America. I think it will send our economy in the wrong direction.
Should Democratic lawmakers try to move Mr. Bidens plan through the regular legislative process and overcome the 60-vote filibuster threshold, at least 10 Republicans would need to join them.
But the reconciliation process allows a fiscal package included in the budget resolution to be shielded from a filibuster. Mr. Schumer has asked the Senates top rule-enforcer whether Democrats can revisit the budget blueprint that was approved last month to include the infrastructure plan, which would enable them to undertake a second reconciliation process before the end of the fiscal year on Sept. 30 and pass it with a simple majority.
Because there is no precedent for passing two reconciliation packages in the same budget year with the same blueprint, Elizabeth MacDonough, the parliamentarian, will have to issue guidance on whether doing so is permissible under Senate rules.
If Democrats succeed, they could potentially use the reconciliation maneuver at least two more times this calendar year to push through more of Mr. Bidens agenda.
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Democrats Look to Smooth the Way for Bidens Infrastructure Plan - The New York Times
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