Manchin balks at GOP’s smaller infrastructure plan – and says he can back $4 trillion as long as it’s paid for

Joe Manchin
Sen. Joe Manchin (D-WV).

  • Sen. Manchin rebuked the GOP’s infrastructure plan, saying Senators should “do whatever it takes.”
  • The moderate Democrat added he’s open to spending $4 trillion so long as it’s paid for.
  • The GOP is preparing an up to $800 billion bill, much smaller than Biden’s $2.3 trillion plan, which may be followed by another $2 trillion.
  • See more stories on Insider’s business page.

Sen. Joe Manchin of West Virginia is open to a multitrillion-dollar infrastructure plan. He just wants to see the bill covered.

That could be bad news for Republicans hoping he’ll break with his party on the next massive plan from President Joe Biden’s desk.

Manchin – a moderate Democrat with incredible influence over Senate Democrats’ agenda – rebuked the GOP’s infrastructure plan on Thursday. These comments could reverberate widely.

A group of Senate Republicans is preparing a plan that could range from $600 billion to $800 billion, drastically undercutting President Joe Biden’s $2.3 trillion proposal. Separately, Senate Minority Leader Mitch McConnell is reportedly telling his caucus to praise Manchin in an effort to win his support.

Manchin’s support is critical for Democrats to pass an infrastructure plan of their own. With Democrats only holding 50 seats in the Senate and relying on Vice President Kamala Harris to break a tie, any opposition from Manchin or other moderate Democrats dooms efforts to pass legislation by a simple majority under reconciliation.

The senator from West Virginia told reporters he still sees room for agreement between Democrats and Republicans, but also that he’s willing to go big if the situation warrants such spending.

“I don’t think they’re locked in on any number,” Manchin said. “We’re going to do whatever it takes. If it takes $4 trillion, I’d do $4 trillion, but we have to pay for it.”

The $4 trillion sum evokes the sum Biden is reportedly looking to spend between two infrastructure proposals. The $2.3 trillion plan unveiled in March focuses more on traditional infrastructure and renovations. A follow-up measure – known as the American Families Act – is expected to include funds for universal pre-K, child care, and other social measures.

The infrastructure argument has split Senators along partisan lines as Biden looks to pass legislation that rivals the New Deal. Democrats argue that new benefits like free community college and child care should join traditional infrastructure in a spending package. Republicans balk at this wider definition and are instead pushing for a slimmed-down measure that focuses on rebuilding roads and bridges. In fact, their slimmed-down plan could double the amount spent on this aspect of physical infrastructure.

The two parties need to come to an agreement on the very definition of “infrastructure,” Manchin said. Identifying exactly what elements the bill should cover is paramount to passing legislation in a timely manner, he added.

The GOP’s plan also differs from Biden’s in that it lacks a corporate tax hike. The president proposed lifting the corporate rate to 28% from 21% along with other tax increases to pay for his infrastructure plan. The GOP instead aims to finance their plan with “user fees,” such as taxes on vehicle mileage traveled or possibly pushing for an increase to the gas tax.

GOP senators doubled down on their dismissal of a corporate tax hike, calling such policy a “non-negotiable red line” Thursday afternoon. Still, they appeared far from agreed on the scope of an overall infrastructure package.

The GOP’s stance mirrors that seen in February as both parties readied their respective stimulus packages. Republican Senators pitched a $618 billion measure to the White House that slashed spending on tenets of Biden’s own plan, including stimulus checks and unemployment insurance. Biden ended up approving a $1.9 trillion package that’s since distributed billions of dollars to American households.

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Biden meets with bipartisan group on $2.3 trillion infrastructure plan, saying he’s open to negotiate

Joe Biden Oval Office
President Joe Biden.

  • Biden held his first official meeting with eight bipartisan lawmakers to discuss infrastructure.
  • He told reporters that he is willing to negotiate on both the size and the scope of his plan.
  • Republican lawmakers argue his plan is too focused on things aside from physical infrastructure.
  • See more stories on Insider’s business page.

For the first time since unveiling his $2.3 trillion infrastructure package two weeks ago, President Joe Biden met with a bipartisan group of lawmakers on Monday to discuss the proposal.

Eight lawmakers, including Chair of the Senate Committee on Climate, Science, and Transportation Maria Cantwell, ranking member of the House Committee on Transportation and Infrastructure Sam Graves, and Rep. Don Young of Alaska, joined Biden and Vice President Kamala Harris in the Oval Office to kick off bipartisan discussions.

“I’m prepared to negotiate as to the extent of my infrastructure package, as well as how we pay for it,” Biden told reporters after the meeting.

He also dismissed the idea that the meeting was just “window dressing,” and said he was “prepared to negotiate as to the extent of the infrastructure project as well as how we pay for it,” citing broadband and clean-water access as important parts of his definition of infrastructure.

This meeting followed a press briefing earlier in the day, when White House Press Secretary Jen Psaki said Biden is “absolutely” willing to negotiate on the size and scope of the package.

With regard to scope, Republican lawmakers have argued that it’s too focused on things besides rebuilding physical infrastructure, like roads and bridges. For example, Senate Minority Leader Mitch McConnell said in a statement two weeks ago that while Biden could have drafted a “serious, targeted infrastructure plan” that would have received bipartisan support, “the latest liberal wish-list the White House has decided to label ‘infrastructure’ is a major missed opportunity by this Administration.”

And with regards to the size of the plan, Republican lawmakers have said the $2.3 trillion price tag, along with Biden’s proposed tax hikes, are too high.

Ranking member of the Senate Committee on Commerce, Science and Transportation Roger Wicker, who attended the meeting, told ABC News in an interview on Sunday, “We are willing to negotiate with him [Biden] on an infrastructure package, and this trillion-dollar number is way too high for me.”

He added that negotiations on the plan have to look different than the $1.9 trillion stimulus plan that passed in February without any Republican votes.

Some Democrats have said they’d like to see some changes to the package. Moderate Democratic Sen. Joe Manchin of West Virginia said on a West Virginia radio talk show last week that he does not support Biden’s proposed corporate tax increase to 28%. “Well, the bill basically is not going to end up that way,” he said.

Psaki emphasized in the Monday press briefing that Biden genuinely wants to work with both parties to create a bipartisan infrastructure bill.

“You don’t use the president of the United States’ time, multiple times over … if you did not want to authentically hear from the members attending about their ideas about how to move forward this package,” she said.

Also in the meeting were Democratic Rep. Donald M. Payne, Jr. of New Jersey, Republican Sen. Deb Fischer of Nebraska, Democratic Sen. Alex Padilla of California, and Democratic Rep. David Price of North Carolina, who all sit on committees relevant to rebuilding infrastructure.

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CEO group says Biden should stick to ‘real infrastructure’ and ‘leave the rest of the stuff for something else’

Joe Biden
President Joe Biden.

  • Business Roundtable’s CEO told Bloomberg that Biden’s infrastructure plan should stick to roads and bridges.
  • The lobbying group also opposes raising the corporate tax to 28% as a way to fund the plan.
  • Biden expressed willingness to work with Republicans on negotiating the size of the tax hike.
  • See more stories on Insider’s business page.

President Joe Biden’s $2.3 trillion infrastructure plan is ambitious. It includes funding for things like climate change and research initiatives, and an influential business lobbying group wants Biden to scale things way back.

Josh Bolten, chief executive officer of Business Roundtable, which represents CEOs of the largest US companies, said in an interview with Bloomberg TV on Thursday that the organization wants Biden to limit the scope of the package to mainly address roads and bridges and “leave the rest of the stuff for something else.”

Bolten, who was former President George W. Bush’s chief of staff for almost three years, did not clarify what he was referring to as “something else.”

“It’s the real infrastructure that can attract bipartisan support,” Bolten said, adding that “more modern infrastructure” also needs investment, citing broadband as an example. In this regard, Bolten is slightly more positive on Biden’s plan than Republican leadership, which has argued that very little of Biden’s plan fits the definition of infrastructure. In fact, Bolten said the Business Roundtable favors a “substantial amount” of what Biden has proposed. For his part, Biden has argued that infrastructure has always periodically undergone reinventions, in step with technology.

Biden’s plan also includes a proposed corporate tax rate increase to 28%, and Bolten said the group, which includes the CEOS of Apple and Amazon, is “strongly against” that proposal. Former President Donald Trump’s 2017 tax cut slashed the rate from 35% to 21%.

“It’s a massive tax increase on US business, which is really damaging, not just to the shareholders of all those businesses but to the employees and customers as well,” he said. The hike, he added, “would make us once again the least competitive in the developed world.”

Earlier this week, Bolten issued a statement criticizing Treasury Secretary’s related efforts to establish a global corporate minimum tax rate, saying it “threatens to subject the U.S. to a major competitive disadvantage.”

Insider reported on Thursday that while 65% of voters support corporate tax hikes to pay for infrastructure, Republican lawmakers, and even some Democrats, are opposed to doing so.

For example, Senate Minority Leader Mitch McConnell said Biden’s plan will get no Republican support in the Senate because “the last thing the economy needs right now is a big, whopping tax increase,” and Democratic Sen. Joe Manchin of West Virginia said on a West Virginia radio show that he would not support a corporate tax increase to 28%. Manchin does want an increase, though, and seems more comfortable with 25%.

The 28% rate seemed reasonable last year to Gary Cohn, the former head of Trump’s National Economic Council. He said at the time he was “actually OK at 28%.”

In a speech on Wednesday, Biden said he would be willing to negotiate with Republicans on the size of the corporate tax increase.

“I’m wide open, but we got to pay for this,” Biden said. “I am willing to negotiate that.”

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Mitch McConnell slams Biden’s $2 trillion infrastructure plan as ‘a major missed opportunity’

Mitch McConnell.
Sen. Mitch McConnell (R-KY).

  • Biden unveiled the first part of his $4 trillion infrastructure plan on Wednesday.
  • McConnell said the $2 trillion plan focuses on things he doesn’t consider infrastructure and pushes a liberal agenda.
  • While the GOP says Biden’s plan does too much, progressives say it doesn’t do enough.
  • See more stories on Insider’s business page.

President Joe Biden unveiled the first part of his $4 trillion infrastructure plan on Wednesday, and it contained funding for not only roads and bridges, but for investments in technology such as electric vehicles, labor and workforce development, housing and education, and more.

Calling it “a major missed opportunity,” Senate Minority Leader Mitch McConnell said the bill focuses less on physical infrastructure and more on catering to Democrats’ agendas.

On Wednesday, while some lawmakers lauded Biden’s proposal to confront big issues facing the country, like climate change and racial inequality, McConnell released a statement saying that less than 6% of the plan goes to roads and bridges, and more money is allocated to electric vehicles than roads, bridges, ports, airports, and waterways, combined.

“It contains sweeping far-left priorities like attacking blue-collar Americans’ Right to Work protections, a huge favor to Big Labor bosses,” McConnell said. “Every time that far-left dogma clashes with the interests of American families, today’s Democrats pick the dogma.”

McConnell also criticized Biden’s proposed $3.5 trillion tax hike to fund the infrastructure plan and said infrastructure was being used as a “Trojan horse for the largest set of tax hikes in a generation.”

The tax hike proposed by Biden would be entirely levied against corporations, and partially reverses the Trump-era 2017 tax cut that reduced the rate from 35% to 21%, bringing it up to 28%. Biden said on Wednesday that the corporate tax rate would still be lower it was “between World War Two and 2017. Just doing that one thing will generate $1 trillion in additional revenue over 15 years.”

Republicans want to go smaller, progressives want to go bigger

McConnell’s critiques of the infrastructure plan are not new to his party. Even before the details of the plan were released, Republican lawmakers said they would not support a plan that focuses on elements beyond repairing physical infrastructure, like investments with climate change in mind, which Biden has made a core component of his infrastructure proposal since his campaign.

“Republicans won’t support another Green New Deal disguising itself as a transportation bill,” House Transportation and Infrastructure Ranking Member Sam Graves said in a statement.

But while Republican lawmakers opposed Biden’s infrastructure plans for doing too much, progressive lawmakers are saying it’s not doing enough. On Wednesday, the Congressional Progressive Caucus, led by Rep. Pramila Jayapal of Washington, said that progressive prefer a “single, ambitious” infrastructure package, instead of Biden’s two-part plan.

“Given the president’s fierce resolve in passing the overwhelmingly popular American Rescue Plan earlier this month, it makes little sense to narrow his previous ambition on infrastructure or compromise with the physical realities of climate change,” Jayapal said.

Biden reiterated in his Wednesday speech his hopes that Congress come together to rebuild the nation’s infrastructure and strengthen the economy.

He said thinks all Republicans in the House or Senate believe infrastructure improvements are needed. “They know China and other countries are eating our lunch. So there’s no reason why it can’t be bipartisan again. The divisions of the moment shouldn’t stop us from doing the right thing for the future.”

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Biden reportedly bumps infrastructure price tag to $4 trillion, with up to $3.5 trillion in tax hikes

Biden
President Joe Biden speaks to the press after disembarking from Airforce One after arriving in Wilmington, Delaware on March 26, 2021.

  • The new infrastructure bill could cost more, and have greater tax hikes, than originally anticipated.
  • The Washington Post reports the package could total $4 trillion, with up to $3.5 trillion in tax hikes.
  • Democrats have suggested various new tax hikes while Republicans have opposed all of them.
  • See more stories on Insider’s business page.

President Joe Biden is expected to unveil his massive infrastructure plan on Wednesday, but it could surprise to the upside.

While the plan was initially thought to have a $3 trillion price tag, it could now reportedly cost as much as $4 trillion, and could also include $3.5 trillion in tax hikes.

Last week, The New York Times first reported details of the upcoming infrastructure proposal. In that report, sources familiar with the plan said could cost up to $3 trillion, which was confirmed to Insider. According to documents obtained by the Times, the plan will be split into two separate legislative pieces: One focused on rebuilding infrastructure such as roads and bridges, and another focused on the care economy, with funding for things including universal pre-K and free community college.

But on Monday, three sources familiar with the matter told The Washington Post that the White House is expected to push for as much as $4 trillion in spending on infrastructure and for as much as $3.5 trillion in tax hikes.

The sources said that administration officials worried about the risk that the large gap between spending and revenue would widen the deficit so much could trigger a spike in interest rates, and increasing taxes would help mitigate that.

On Wednesday, Biden is expected to unveil the first legislative piece of the infrastructure plan, which would focus on rebuilding roads and bridges, expand clean energy investments, create infrastructure for electric vehicles, and more. This part of the plan would also include funding for disabled and elderly care.

As for the second part of the plan focused on the care economy, White House Press Secretary Jen Psaki said on Fox News Sunday that it will be released “in just a couple of weeks” and “will address a lot of issues that American people are struggling with.”

“The total package we’re still working out, but he’s [Biden] going to introduce some ways to pay for that, and he’s eager to hear ideas from both parties as well,” Psaki said.

Biden has already shown a historic willingness to go big with recovery packages, a contrast to the stimulus packages enacted during the Obama-era recovery during the Great Recession.

Tax hikes may be on their way – and Republicans don’t like that

As The Washington Post writes, the focus on the deficit could help appease critics who worry about spending – but it also lays out a big challenge for Biden. The White House would need to get Congress on its side to enact its reported tax increases, which “together would represent the largest tax hike in generations.”

Lawmakers have already begun floating a host of ideas to fund the infrastructure package, with tax hikes on the table. Moderate Democratic Sen. Joe Manchin of West Virginia told Axios in the beginning of March that an infrastructure bill could be as large as $4 trillion if it’s funded by tax hikes, but made it clear that he would not support using reconciliation to pass it, as the $1.9 trillion stimulus was.

Biden has been reportedly eyeing a tax increase, with wealthier Americans and corporations as the primary targets.

Biden said during his campaign that he would increase the corporate tax from 21% to 28% – still lower than its 35% rate prior to former President Donald Trump’s tax cuts. He’s also reportedly been looking at adjustments to the stepped-up basis, as well as expanding the capital gains tax. He may also raise income taxes to as high as 39% for Americans making over $400,000 a year.

But Republican lawmakers are unlikely to support tax hikes to fund infrastructure. In fact, some have been pushing for the opposite of Sanders’ proposed increase to an estate tax, instead calling for it to be repealed.

“I don’t think there’s going to be any enthusiasm on our side for a tax increase,” Senate Minority Leader Mitch McConnell told reporters last week.

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