President Biden is preparing to make an enormous political gamble: betting that Americans will support as much as $3 trillion in new tax hikes — mostly on wealthy individuals and corporations — to help pay for a jobs and infrastructure package costing up to $4 trillion over the next decade.
Biden is set to announce the first phase of the package during a visit to Pittsburgh on Wednesday, kicking off a legislative battle that could help decide which party controls both the House and the Senate after the 2022 midterms.
The undertaking will mark the first major test of the Biden administration’s ability to shepherd a traditional legislative spending package through a Congress narrowly held by Democrats — while presenting the administration with an enormous political challenge in persuading lawmakers to pass a package that would represent the largest tax hike in generations.
The legislative push also comes on the heels of a $1.9 trillion coronavirus relief package that Biden signed into law earlier this month. The rescue plan — which provides money for vaccines and $1,400 stimulus payments to many Americans — remains popular among a majority of Americans, according to polling. But it could complicate Biden’s appeal to the American people to support another high-dollar package in such short order — especially one that costs even more, will require tax hikes to pay for it and will promise results that are less immediate.
If successful, Biden’s package would mark the largest spending bill in sheer dollars in the nation’s history. But as a percentage of gross domestic product on a yearly basis, the overall 10-year package is actually much smaller than other major economic packages, including the most recent stimulus package, according to Richard Kogan, a senior fellow at the Center on Budget and Policy Priorities.
Biden allies and advisers argue that the infrastructure proposal represents the policies and promises that the president campaigned on and that it will prove popular with the public, if not necessarily Republican lawmakers on Capitol Hill. They say the lessons they learned from the coronavirus relief package — as well as President Barack Obama’s mixed success in selling his 2009 stimulus bill — is that the real risk is not being sufficiently ambitious.
[Biden’s infrastructure and climate plan emerges as congressional wrangling begins]
But they are also prepared for a more complicated legislative process than they faced with the relief bill, with more negotiation and attempted compromise with their Republican counterparts.
White House press secretary Jen Psaki said Biden’s speech Wednesday will lay out his vision for fixing the nation’s infrastructure challenges, which she characterized as something the entire country should be able to agree on.
“Fundamentally, we don’t believe that making a historic investment in American workers and rebuilding our infrastructure across the country to help us compete with China is controversial,” Psaki said. “And while the president will lay out a plan for paying for it over time, we’re also open to having a discussion about alternatives.”
Republicans, who have so far struggled to effectively undercut Biden’s early moves on the pandemic and vaccines, are hoping the infrastructure package gives them a new attack line against Democrats as they head into the midterms. They are especially optimistic that they can use the expected tax increases as well as the Democratic priorities in the legislation — such as an expected $400 billion in clean-energy credits and another $400 billion toward care for the elderly and people with disabilities — to paint the Democrats as out of touch and hostage to their liberal base.
Speaking on the Senate floor Monday, Minority Leader Mitch McConnell (R-Ky.) said he expected the infrastructure bill to be “a Trojan horse for massive tax hikes and other job-killing left-wing policies.”
Chris Hartline, spokesman for the National Republican Senatorial Committee, said Republicans see a political opportunity in the legislation because of its cost and its reach beyond building roads and bridges.
“It’s one thing to do a big spending bill on covid,” Hartline said. “The public’s view on this will be different for a bill this big that is not directly related to covid and, to be honest, a bill that’s not directly related to infrastructure.”
The administration’s plan to pay for the package, including through taxes on high-income individuals and companies, is likely to negatively impact even everyday Americans, Hartline said. “I don’t see how this doesn’t include taxes for small businesses, workers — all the people Joe Biden said he’d never raise taxes on,” he said.
During the campaign, Biden vowed that Americans making less than $400,000 a year would not pay higher taxes, a stance he has reaffirmed since taking office. But the White House has already found itself grappling with the potential land mines in discussing raising taxes, after Transportation Secretary Pete Buttigieg had to quickly walk back comments last week he made about a potential mileage tax or higher gas taxes.
[Biden and allies launch stimulus campaign focused on competitive battleground states]
White House officials are signaling to allies on Capitol Hill that they want to take a substantively different approach to the legislative process than they did when they jammed through the stimulus package earlier this month. They are gearing up for more negotiations and potentially significant changes to the bill, and say they will be more open to input and alternative proposals from members of Congress in both parties.
A White House aide, who spoke on the condition of anonymity to describe the administration’s thinking, said the administration wants Congress to make progress on the legislation before Memorial Day and will consider breaking the legislation up into more parts if necessary.
Jonathan Alter, the author of “The Defining Moment” — a book about President Franklin D. Roosevelt’s first 100 days in office that Biden and some members of his team have read — said the backdrop of crises could help Biden extend his ability to pass bold Democratic prescriptions on a range of issues.
“When there’s a crisis, all this talk about small government and ‘Get the government out of my pocket’ goes away, and people need the government to stay afloat,” Alter said.
The results, not the process or price tag, is what ultimately matters, he said. When Roosevelt was once asked about the political philosophy behind the Tennessee Valley Authority — an immense public power project that he signed into law — Alter summarized the former president as quipping, “It’s neither fish nor fowl, but it sure does taste good to the people of the Tennessee Valley.”
[‘The art of the possible’: Biden lays out vision of pragmatism for his presidency]
Republicans, however, are skeptical of the administration’s promises that this legislation will be more collaborative. Several have pointed to the relief package, saying the White House merely feigned interest at bipartisanship before steamrolling Republicans and pushing through their original proposal, largely unchanged.
“There isn’t a Republican in Washington holding his or her breath,” said one Senate Republican aide, who spoke on the condition of anonymity to candidly discuss the process. “Democrats showed us their playbook on their so-called covid-relief package: Take an issue with bipartisan support, stuff it full of trillions of dollars’ worth of unrelated far-left priorities, and then jam it through on a party-line vote. We were paying attention. Regardless of what they call it, that isn’t negotiating. And it isn’t bipartisan.”
Democrats are also seeking to avoid a situation like in 2009, when Republicans pounced on the Obama administration for alleged wasteful spending in the administration’s stimulus package. In one example, Solyndra, a clean-energy company, misled the federal government to obtain millions of dollars in loans and then filed for bankruptcy.
Democrats say the Biden administration will also need to be careful to explain the details of the new package, especially as Americans will not see the immediate effects of the spending as they did when stimulus payments hit their bank accounts. Many Democratic lawmakers in swing districts or purple states say they are willing to support the large price tag — but only if the final package reflects critical infrastructure projects rather than what they view as auxiliary Democratic goals, such as efforts aimed at mitigating climate change.
John Anzalone, Biden’s top pollster on the campaign, said the president’s high approval ratings on the coronavirus relief package should buoy Democrats in their efforts to pass another expansive package, especially one in which Biden will clearly outline how he will pay for much of the spending.
Anzalone also brushed aside criticism from Republicans about the federal debt or raising taxes, saying the party approved freewheeling spending under past Republican administrations and pointed to polling showing that most Americans think the wealthy and corporations should pay more.
“The American people feel they get screwed constantly and they’re the target of taxes, and they believe the wealthy and big corporations should pay their fair share,” Anzalone said.
House Majority Whip James E. Clyburn (D-S.C.), a close Biden ally, said the massive price tag on Biden’s proposal simply reflects the severity of the nation’s crumbling infrastructure and the need for historic investment.
“I don’t know why people think you’re going to get broadband into American homes by clipping coupons from the Sunday papers,” he said. “That’s not going to happen. You’re not going to fix the roads and bridges that we all know need to be fixed in this country by praying about it. You got to spend the money.”
Clyburn said he is confident that Democrats will fall in line behind tax increases on the rich despite early warnings from some moderates. Democratic Reps. Bill Pascrell Jr. (N.J.), Josh Gottheimer (N.J.), Mikie Sherrill (N.J.) and Thomas Suozzi (N.Y.), for instance, have said they will oppose any change to the tax code unless Biden lifts a cap implemented by President Donald Trump on the deduction for state and local taxes. Democrats’ slim majority in the House — they can only afford three defections — gives them little wiggle room.
“People are already going to grumble about taxes,” Clyburn said. “They are going to grumble no matter what.”
Correction: An earlier version of this story misstated when the Biden administration wants Congress to make progress on the legislation. It is before Memorial Day, not Labor Day.
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