President Joe Biden is campaigning hard for a second “infrastructure” bill that contains a number of significant tax increases on corporations and American taxpayers earning around $400,000 and above, but the bill is swiftly “losing momentum,” and the fight to pass a major tax hike in Biden’s first term could be “over,”
“With the GOP resolute against tax increases, and with a handful of economists concerned that raising taxes now could risk the economic recovery, some say the outlook for the administration’s tax plans has grown murkier in recent months. The chances of big tax reform in the near future seem reduced,” said Tony Fratto, who served as a Treasury official For George H. W. Bush
Biden has been working on the second “infrastructure” bill since earlier this year, and, at one point, even appeared to pressure Republicans and Democrats, who had inked an agreement on the first infrastructure plan, into pairing the two bills. The president had planned to make the tax hike — which would erase some of the tax cuts extended during former President Donald Trump’s first term — a hallmark of his first term.
Even Sen. Mitt Romney, who worked on the Senate’s compromise infrastructure plan, has been resolutely against hiking taxes. Sen. Joe Manchin, who commands the Senate’s swing vote, has said he is “open” to the idea of a second infrastructure bill and to rolling back some of the former administration’s tax credits, but his vote hasn’t been won yet.
Analysts do seem to suggest that Biden’s tax hikes could also hurt wages in the short term, dealing a blow to a currently recovering economy.
The biggest hurdle to Biden’s success could be his own party. A bipartisan group of Republicans and Democrats have pressed for the House to pass the compromise infrastructure bill, bucking Speaker of the House Nancy Pelosi’s to pass the two infrastructure bills at the same time or not at all.
The message sets up a showdown between House progressives and the Speaker, who desperately want the expansion in child care, education, and environmental funding the bill provides, and more practical legislators who say the first infrastructure bill is sufficient for the time being, and that the second, “human infrastructure” bill can wait until Congress returns from its summer recess.
The Senate plans to move first to pass both proposals in the coming weeks — or months — after it returns from its Fourth of July recess. Senate Majority Leader Chuck Schumer has said he aims to move toward votes on the bipartisan framework and a budget resolution that would allow Democrats to approve a second bill without Republican support.
Author: Elizabeth Tierney
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