The drafting process to turn President Biden’s American Jobs Plan proposal into legislation is mostly continuing internally within Congress at this time. However, this article by ASAE will help our members keep track of where negotiations stand between congressional Democrats and Republicans. We also encourage our members to read this article by Politico to understand the pressures the Administration is facing from within the Democratic party. As reported by ASAE:
“While the White House continues to seek compromise with Republicans on President Biden’s sweeping $2.3 trillion infrastructure and jobs plan, the Senate Finance Committee held a hearing Tuesday to discuss funding options for large-scale infrastructure improvements.
The White House continues to insist corporations should help pay for infrastructure with an increase to the corporate tax rate from 21% to 28% and increasing the global minimum tax rate on multinational corporations. Republicans have mostly balked at the size of Biden’s infrastructure proposal and almost uniformly object to raising the corporate tax rate as a pay-for.
This impasse was reinforced at Tuesday’s hearing, with Senate Finance Committee Chairman Ron Wyden (D-OR) saying in his opening statement that corporations have never contributed less to federal revenues than they do now under the 2017 tax law signed by President Trump.
Senate Finance Ranking Member Mike Crapo (R-ID) began his own opening statement by noting recent ‘productive’ meetings between Republican lawmakers and President Biden, but quickly established raising corporate taxes as a non-negotiable. [Editorial note: Axios reports that opposition to increasing corporate taxes will likely be an important part of GOP messaging in the 2022 election.]
Crapo said infrastructure investments could be financed through user fees, including new charges on owners of electric vehicles. He added that Congress should consider proposals to attract private capital for infrastructure projects and look to repurpose unused federal funds. One potential financing offset that has attracted bipartisan support is resurrecting Build America Bonds, which are special municipal bonds that allow states and counties to float debt with interest costs subsidized by the federal government. Build America Bonds were introduced more than a decade ago as the Obama administration looked for ways to jumpstart the economy after the Great Recession.”
Big picture complication: Congress has shown a deep interest in using funds retrieved from pursuing uncollected taxes to help pay for its jobs and infrastructure plan. However, as Politico Pro reports: “The problem is budget scorekeeping rule number 14. It prevents lawmakers from incorporating into calculations of how much legislation costs any savings from increasing IRS audits or other ‘program integrity’ initiatives across the government designed to make programs more cost-effective — such as cracking down on fraudulent Social Security disability payments.” In a nutshell, this means that on paper, the jobs and infrastructure plan could seem more expensive than it might end up being, making its road to passage harder.
Stay Informed on the Latest Research & Analysis from ANCOR