Infrastructure, Taxes and Border Mess
While Congress will be taking a break for Passover and Easter, President Biden is heading to Pittsburgh on Wednesday to formally announce his infrastructure program. Reports run as high as $3T for the price tag, though talks behind the scenes with moderate Democrats and a handful of Republicans could see a lower dollar amount in order to get broader support.
There are two big questions that the White House and Congress will need to work out: first, will there be enough Senate Republicans who support the final bill to allow the program to be approved under regular order; and second, will taxes need to be raised in order to at least partially pay for the programs.
On the first issue of Republican support, as I have written the renewal of Member earmarks might help generate support among Republicans. Republicans have long argued that folks back home know much more about spending priorities than bureaucrats in Washington. Earmarks are the legislative tool to make the decision making process more local, if adopted it may put pressure on some Republicans to participate in a process that brings infrastructure dollars to their states. If a bipartisan compromise can’t be assembled Democrats are likely to turn to the Budget Reconciliation process to move a large infrastructure bill.
There is already discussion around the argument that infrastructure is a good investment and the type of spending that makes sense to pay for over time with borrowing. With a 50/50 Senate most of the tax raising ideas that have been brought forward would have a tough time getting 50 Democratic votes, and even Susan Collins, the most moderate Republican, literally laughed when asked if she could support a Democratic tax increase.
This past week Senator Sanders unveiled a tax program that included a large increase in corporate taxes, and tax increases for estates. It is important to note that while Senator Sanders serves as Chair of the Budget Committee, it is Finance not Budget, that writes tax laws. The infrastructure bill is on a fast track, the same can’t be said for tax increases.
While the White House has wanted to focus on the accomplishments to date with respect to both vaccines and the large Covid legislative package, much of the press this past week was centered on the flood of immigrants at the Southern border. In fact at Thursday press conference there were many questions on the immigration problems, and not a single question on Covid or the rollout of the massive $1.9T legislation.
Republicans plan to spend time during the Congressional break down at the border, they know that Trump and Republicans got hammered on immigration policy, but they also know that for the Trump base immigration and the border wall are central issues. The President wants to keep the national debate focused on his successful vaccine effort and $1,400 checks flowing into personal checking accounts; but immigration is likely to be putting attention on an issue that seems to have no good solution in the near-term.
