Apr 20, 2021 - Politics & Policy

Republicans tell Biden no corporate tax hike for infrastructure

Sen. Mitt Romney

Sen. Mitt Romney

Sens. Mitt Romney (R-Utah) and John Hoeven (R-N.D.) told President Biden Monday they are opposed to increasing the corporate tax rate to pay for his proposed $2.25 trillion infrastructure package, according to people familiar with the matter.

Why it matters: The opposition from Romney and Hoeven, the only two Republican senators in Monday’s bipartisan Oval Office meeting, suggests Biden is going to have a difficult time finding any Republican support to pay for his road, bridge and health care spending proposals by increasing corporate rates.

  • The White House is still looking for evidence there are any Republicans willing to entertain some of the president’s proposals, including Biden’s plan to raise the corporate rate from 21% to 28%.
  • If administration officials conclude Republican senators are only interested in drawing red lines, they may be more inclined to pursue a purely partisan path and look for 50 Democratic votes in the Senate to pass a bill via the budget reconciliation process.
  • The president himself told reporters at the outset of the meeting: “I am prepared to compromise, prepared to see what we can do and what we can get together on.”

What they are saying: While both Romney and Hoeven are in favor of an infrastructure package, they sat they want to see a more targeted payment mechanism – gas taxes and user fees – to help fund individual projects.

  • “There is broad support for infrastructure, and I believe a bipartisan bill is possible, but we need to find agreement to make these updates in a targeted way that doesn’t raise taxes,” Hoeven said in a statement.
  • “I know that my Democratic friends are more inclined to look for the general revenue fund for taxpayers to pick up the bill, but my inclination is more towards the people who actually use a facility to be the ones that pay for it,” Romney told reporters on Capitol Hill.

Behind the scenes: Biden began the meeting by yielding the floor to Maine's Sen. Angus King, an independent who caucuses with the Democrats and a was once public television host.

  • King ensured that everyone in the room had an opportunity to air the views and explain their positions.
  • Romney acknowledged as much and praised the president. “He was in listening mode, and, and was gracious to solicit our respective points of view,” he said.

The bottom line: Negotiations between Senate Republicans and the White House are just beginning, but their opening positions are miles apart.

  • The vast distance gives partisan Democrats more space to argue to Biden that he should pursue a deal via reconciliation and not bother trying to bring Republicans along.
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