Does Biden really know Congress as well as he says? Tax plan suggests maybe not

Published April 7, 2021 11:00am ET



President Joe Biden is struggling to come to terms with the Congress he has. All indications suggest he is firing off legislation for the one he wants as he prepares to deliver two more $2 trillion dollar spending packages to Capitol Hill.

Similar to billionaire businessman and former President Donald Trump before him, Biden pitched his almost 40 years as a U.S. senator as evidence he would be able to strike bipartisan deals with Republicans — and centrist Democrats from swing and red states.

But Congress passed Biden’s $1.9 trillion coronavirus spending package last month with no Republican support, negotiations getting caught in snags created, in part, by Democrats — and Republicans who never offered a counterproposal the other side would even entertain. Now, Biden and his aides are poised to clear his $2.25 trillion infrastructure plan using the same unilateral process.

This time, some Democrats, again, aren’t onside. At least not yet. Though Biden is Washington veteran enough to realize his party’s control over all three levers of the legislative process could end with the next election cycle, meaning he is going big now.

BIDEN’S TWOFER ‘INFRASTRUCTURE’ APPROACH COULD DOOM BOTH BILLS

Biden may have campaigned on unity, but he misjudged how united Republicans would be against his legislative agenda, according to Lawrence Jacobs, director of the University of Minnesota’s Center for the Study of Politics and Governance.

Biden’s inability to find common ground with Maine Republican Sen. Susan Collins, who proposed a $618 billion counteroffer to his coronavirus package with nine other GOP senators, was the most pointed example, Jacobs told the Washington Examiner. The White House was quick to dismiss it as a low-balled pitch, making Biden’s inaugural address calling for bipartisanship seem “quaint and dated,” Jacobs said.

In February, Biden predicted, “We’ll get Republican support” for the coronavirus package. A month later, it passed the House and Senate without a single GOP vote and, in fact, lost two Democrats in the House.

Biden’s move looks like a miscalculation to some. After all, the 46th president suggested during his transition from the election to being sworn in that “you’re going to see an awful lot change” among Republicans when Trump’s “shadow fades away.” But on the other hand, some analysts see a president going for broke because history shows Republicans likely will control the House after the 2022 midterm elections.

But even before that might happen, other forces Biden likely should have foreseen are lessening his deal-making prowess.

“The GOP has changed into a highly unified party in which the kind of pragmatism he practiced in the Senate is long gone,” Jacobs added of Biden. “The rising power of progressives among Dems in Congress has tied Biden’s hands to make deals.”

For instance, White House chief of staff Ron Klain speaks more frequently with liberal House Democrats than with members of the House Problem Solvers Caucus, made up of Republican and Democratic centrists.

“Political gravity has also shifted since Biden was in the Senate,” Jacobs continued. “The kind of ‘bring home the bacon’ legislation in the COVID relief bill was the kind of thing that would have had large bipartisan majorities in the past. Today, party and fidelity to respective ideologies holds sway over pragmatism and serving the district.”

The same dynamics are now at play as private and public negotiations begin over Biden’s “American Jobs Plan.”

The “American Jobs Plan” was initially billed as an infrastructure package, but its sweeping environmental proposals, research and development investments, and “care economy” workforce provisions are not traditionally considered to fall under the “infrastructure” tag.

Republicans are describing Biden’s “social infrastructure” ideas, which he’ll add to in this month’s companion “American Families Plan,” as nonstarters. That, along with the Senate parliamentarian ruling this week that Democrats can rely on the reconciliation procedure one more time to fast-track tax and spending legislation, means Biden will likely be able to pass the “American Jobs Plan” through the chamber with a simple majority.

While that’s a boon for Biden, Democrats aren’t making negotiations easy. Democratic West Virginia Sen. Joe Manchin, for one, slapped down Biden’s proposal this week to raise the corporate tax rate from 21% to 28% to pay for his “American Jobs Plan.” In February, Manchin, whose wife is nominated for a plum post within the Biden administration, dashed liberal dreams of a $15 federal minimum wage.

“It’s more than just me. There are six or seven other Democrats that feel strongly about this. We have to be competitive, and we are not going to throw caution to the wind,” Manchin told WV MetroNews radio’s Talkline.

In a shot across Biden’s bow, he said: “This whole thing has got to change.”

Manchin does support increasing the corporate tax rate to 25%, which he argues is the international average. In addition, he backs closing tax “loopholes” leveraged by high-income earners. The West Virginia lawmaker offered a similar amendment to Trump’s 2017 tax cut bill that he later signed into law.

Thomas Schaller, a columnist and University of Maryland political science professor, downplayed concerns about the corporate tax hike. He shrugged off the rhetoric as posturing since a limited number of corporations pay the top rate, corporate tax revenue represents only a small percentage of money in federal coffers, and the country has had a historically high rate. Amazon founder and CEO Jeff Bezos even endorsed a corporate tax raise on Tuesday after years of skirting federal income tax.

“To his opponents, be they Republicans or Joe Manchin, he should start his dealings by asking them a simple question: ‘Can you name a single major corporation prior to 2017 that paid the full 28% tax rate?'” Schaller said of Biden.

“Because the fact is, opponents of high corporate tax rates like to talk about the nominal rates in the tax law but curiously and intentionally avoid talking about the effective tax rates actually paid by most corporations,” he said.

While there’s still time and space to broker a deal, Biden will likely have to compromise on his 28% corporate tax rate bottom line — with Manchin and several other centrist Senate Democrats.

The White House has calculated that rate will pay for his “American Jobs Plan” in 15 years, though Republicans will target the hike well before then ahead of the 2022 midterm elections. The package, which Biden wants to sign into law this summer, is estimated to generate 2.7 million jobs.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

“I’ll get the Democratic votes for the tax increase,” Biden told ABC last month.