Biden’s Infrastructure Plan Lands for Negotiations This Week
03 May 2021 · 3rd Party Analysis
- Joe Biden prepares to meet with Republican Senators this week
- Treasury Secretary Janet Yellen urges Congress to support higher taxes
President Joe Biden is set to meet with Republicans this week to discuss the measures related to the proposed spending on infrastructure. The plan envisions $2.3tn in investments in roads, railways, bridges, airports, and other elements of physical infrastructure across the states.
On Sunday, White House representatives announced that they expected negotiations over the proposed package to accelerate this week. The aim would be to bring in Republicans for negotiations at the White House and together with President Biden, decide if a bipartisan agreement is within reach.
Ron Klain, White House chief of staff, is optimistic an agreement could be reached. Mr. Klain confirmed over the weekend that President Biden had invited leading Republicans, including Sen. Shelley Moore, to discuss the infrastructure package this week. “We’re going to work with Republicans. We’re going to find common ground,” Mr. Klain commented in a televised interview.
Republicans, however, require President Biden to make significant concessions if he wants to see the plan materialized. Last month, in an attempt to find common ground, Republican Senators released an outline for a $568bn infrastructure spending, an alternative to Mr. Biden’s proposal. The plan unveiled by the President would spend $2.3tn over eight years and will focus on projects that go beyond infrastructure. Additional measures will be included, among them home care for seniors, funding for technology programs, and manufacturing research.
Biden Announces American Families Plan
Moreover, Mr. Biden announced another big-ticket spending, this time centered on child-care, education, and paid leave. During his speech before Congress on his 100th day in office, Joe Biden pitched a greater vision for investments to boost the US economy, including a $1.8tn new plan called “American Families Plan”, on top of the already proposed $2.3tn spending on infrastructure.
GOP lawmakers have expressed willingness to discuss the packages, saying it might be possible to reach bipartisan support, if President Biden agrees on a narrower and less expensive infrastructure plan. Mr. Biden’s plan focused on fixing infrastructure includes $621bn to modernize transportation systems, whereas the GOP plan dedicates $299bn to roads and bridges and $61bn to public transit systems.
Republicans fret over the proposal to raise taxes to pay for the government spending. Joe Biden has stated that he will be pushing to raise the corporate tax rate to 28%, from the current rate of 21%. He also wants to increase the top capital gains rate to 43.4% from 23.8%. The higher tax rates will generate enough revenue over the next 15 years to help pay for the borrowed money. GOP leaders argue that raising taxes would force companies to seek offshore financial centers.
Janet Yellen, the Treasury Secretary, has actively been pushing Congress to accept the White House’s plan for higher taxes that will be used to pay for the two packages with a combined worth of $4.1tn. As President Joe Biden is preparing to lead the negotiations this week, he is faced with opposition from Wall Street, corporate America, and Republican Senators.