The GOP red line over raising corporate tax rates to pay for infrastructure spending isn’t a reasonable negotiating strategy, Senate Democrats said Thursday.
“We haven’t even started the discussion. To say you have a red line doesn’t help further discussions. That’s not negotiating. So I hope that’s not necessarily their final position,” Sen. Angus King of Maine, an independent who caucuses with Democrats, told HuffPost.
Top Senate Republicans held a press conference at the Capitol on Thursday to discuss their vision for an infrastructure overhaul, which includes traditional projects like roads, bridges and waterways. They objected to portions of Joe Biden’s American Jobs Plan that spends hundreds of billions of dollars on school funding, child care and electric vehicles.
And they rejected any effort to raise the corporate tax rate to pay for infrastructure investments.
“I think that’s a nonnegotiable red line,” Sen. Shelley Moore Capito (R-W.Va.) told reporters, warning that raising taxes on businesses would hurt the country’s competitiveness abroad. Sens. John Cornyn (R-Texas) and Susan Collins (R-Maine) agreed.
Both Capito and King are members of a bipartisan group of 20 senators seeking to find common ground and prove that the chamber can still function in a time of high polarization. They haven’t had much luck so far.
Biden has said he would be willing to negotiate over his proposal to hike the corporate tax rate from 21% to 28%, which pays for the $2 trillion infrastructure bill, along with several other corporate tax changes. Republicans, who slashed the corporate rate from 35% in 2017, have not offered to compromise in kind.
GOP senators have suggested other ways to finance infrastructure projects, including added usage fees and public-private partnerships. None of this would generate the kind of revenue needed to offset the cost of a multitrillion-dollar bill sought by the Biden administration, however.
“I don’t think it precludes negotiations at all,” Capito told HuffPost when asked about her opposition to corporate tax hikes.
Senate Democrats have the option to use a special budget process to pass the infrastructure bill without Republicans, but Sen. Joe Manchin (D-W.Va.), who has been the face of the bipartisan working group, has insisted Democrats compromise. He said it’s too soon to write off Republicans despite their tax absolutism.
“We’re going to be getting together and talking and we’ll work through all that,” Manchin told HuffPost. “We’re just all working together, we really are. This is so early, so there’s not a whole lot to talk about.”
The West Virginia Democrat expressed support for an infrastructure bill that costs as much as $4 trillion — as long as it’s paid for.
Since Democrats control only 50 Senate seats, any one of them has the power to stop the party’s agenda — and Manchin, whose state overwhelmingly favored Donald Trump in the 2020 election, is using that power with gusto.
But Manchin is right that lawmakers are at an early stage in negotiations. Unlike with the last COVID-19 relief bill, which prevented a scheduled lapse in federal unemployment benefits, there’s no urgent deadline for anything in Biden’s infrastructure proposal. The White House has said it hopes Congress passes a bill by summer.
Other Democrats in the working group sounded less patient on Thursday.
“It’d be a little curious if our Republican friends are going to take all of the payfors off the table but then still say they want infrastructure,” Sen. Mark Warner (D-Va.) said. “I desperately want to still work with our Republican friends to get there, but before you start the process, there may be some people trying to draw red lines that don’t want the process to get to 60 [votes].”
Senate Budget Committee Chair Bernie Sanders (I-Vt.), who is a proponent of budget reconciliation and much less interested in compromising with Republicans, suggested Thursday’s comments were a wake-up call.
“I think Democrats have finally caught on that we’re not going to be negotiating forever,” Sanders told HuffPost. “If Republicans are serious, I’d love to hear their ideas. If they’re not, we’ll have to move along.”