Holidays see House head home, vacancies narrow House margins, tax talk starts
With the approach of Easter and Passover the House will not have votes for the next three weeks but will have committee hearings. The Congressional leadership and White House are in talks to develop the next round of legislation. The legislative strategy for Democrats is complicated by the narrow House majority and the 50/50 tie in the Senate.
Infrastructure has been the most widely discussed next step for the White House and Congress; and there is already talk as to whether or not it can be jammed through under Budget Reconciliation or if a bipartisan consensus can be reached. In my view the decision by the House Republican Caucus to join Democrats and to renew budget earmarks may be a sign that a bipartisan infrastructure bill may be possible. Earmarks give members a direct link to the spending decisions. In fact, in earlier days the rule was if a Member opposed the overall bill they couldn’t get their earmarks into the legislation. It was a great tool for Leadership to build support for the underlying legislation.
There have been some early discussions about whether or not an infrastructure bill would need to be fully funded, and if so what the funding sources would be. The gas tax hasn’t been raised since 2009, but it is viewed as a very regressive tax, with newer cars having better gas mileage it is a tax that Congress may turn to. Just as the massive COVID bills, both Biden and Trump, were not paid for it is possible that the strategy may be to pass infrastructure without funding the projects.
Tax policy, both increases under Obama and Clinton and cuts under Trump and Bush, have been passed under Budget Reconciliation and there is some pressure from progressive Democrats to increase taxes on the wealthy and corporations. Talks on tax policy are in the very early stages; but with the 50/50 Senate, and several Senate Democrats in tough 2022 races it is my view that while an increase in the corporate tax rate is possible, increases in personal tax rates will be tough to pass. There are a handful of moderate Democrats in addition to Manchin and Sinema, there were eight Democratic Senators who voted against the effort of Senator Sanders to insert the minimum wage increase in the COVID Relief Reconciliation package. One of these eight is up for re-election in 2022 and is one of several Democratic Senators who would be questionable on votes to increase personal tax rates or capital gains; though an increase of the corporate tax rate is very much on the table.
Another issue that Democrats have to worry about is their narrow majority in the House, with five current vacancies the lineup is 219 Ds to 211 Rs. The three D vacancies were caused by appointments to the Biden Administration and the two R vacancies by death of Members due to complications from COVID. The first specials elections to fill the vacancies will be this weekend in Louisiana where a candidate must get 50% of the vote to avoid a runoff. Two of the five vacancies are in Louisiana – one from each Party.
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