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Biden Drops Corporate Tax Hike, Halves Proposed Infrastructure Spending in Concession to GOP

President Joe Biden delivers remarks at an annual Memorial Day Service at Veterans Memorial Park, New Castle, Del., May 30, 2021. (Ken Cedeno/Reuters)

President Biden reportedly suggested in a private meeting on Wednesday that he is open to significantly revising the size of his $2.3 trillion infrastructure plan, as well as how it would be funded, in order to secure Republican support.

Biden outlined a plan for roughly $1 trillion in new spending financed through tax changes that would not raise the top corporate rate during a meeting with the GOP’s top negotiator, Senator Shelley Moore Capito (R., W. Va.), according to the Washington PostThe concession comes after Biden agreed to drop his initial price tag of more than $2 trillion down to $1.7 trillion early in negotiations.

Republicans, however, continue to call out the non-infrastructure spending included in the package and have repeatedly pushed for a $257 billion package that would focus exclusively on funding repairs for the nation’s ailing roads, bridges, and rails.

However, the president will still call for the tax increases — which would raise the corporate tax rate from 21 percent to 28 percent — as part of his broader agenda, the report says.

For now, the president instead shifted focus to a provision in his infrastructure proposal which would amount to a new minimum corporate tax of 15 percent, as well as a proposal to increase enforcement on corporates and wealthy earners who use loopholes to lower their tax bills.

Republicans are set to meet with the White House again on Friday, though the Biden administration has signaled that time is running out to reach a compromise. Transportation Secretary Pete Buttigieg previously said the administration expects to see progress in negotiations by Monday, though White House press secretary Jen Psaki said Thursday that the White House is going to “keep our options open,” in terms of any self-imposed deadline.

A source told the Washington Post that Republican leaders are weighing whether to make another counteroffer or to step away from the table entirely.

“We’re still hoping we can come to an agreement on a fully paid for and significant infrastructure package,” Senate Minority Leader Mitch McConnell (R., Ky.) said on Thursday.

Meanwhile, Psaki said Thursday that Biden has “absolutely not” changed his belief that Congress should raise the corporate tax rate. She said it is a critical way to “pay for a range of the bold proposals that he has put forward.”

“But he also took a look at these proposals, and … all of the tax proposals that he has put forward over time, to find a way where there should be pay-fors that based on their bottom lines, many of the Republican negotiators should be able to agree to,” Psaki said.

Should talks fall apart, Democrats could attempt to bypass Republicans and advance the bill using budget reconciliation. However, the party would have to secure support from even the most moderate Democrats to pass the measure, even in a simple majority vote. Senator Joe Manchin (D., W.Va.) said Thursday that he wouldn’t support passing the infrastructure package through reconciliation and called the notion of proceeding on a major piece of legislation without GOP support “a disaster waiting to happen.”

And Democrats’s options for passing Biden’s progressive agenda without Republican support were likely limited last week when the Senate parliamentarian issued a new ruling that would effectively allow the party to use automatic budget reconciliation just one more time this year.

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