President Joe Biden is campaigning hard for a second “infrastructure” bill that contains a number of significant tax increases on corporations and American taxpayers earning around $400,000 and above, but the bill is swiftly “losing momentum,” and the fight to pass a major tax hike in Biden’s first term could be “over,” per CNBC.
“[W]ith the GOP resolute against tax increases, and with a handful of economists concerned that raising taxes now could risk the economic recovery, some say the outlook for the administration’s tax plans has grown murkier in recent months,” the outlet said Thursday. “The chances of big tax reform in the near term seem reduced, said Tony Fratto, who served as a Treasury official in the George W. Bush administration.”
Biden has been working on the second “infrastructure” bill since earlier this year, and, at one point, even appeared to pressure Republicans and Democrats, who had inked an agreement on the first infrastructure plan, into pairing the two bills. The president had planned to make the tax hike — which would erase some of the tax cuts extended during former President Donald Trump’s first term — a hallmark of his first term.
Fratto, however, told CNBC that things are looking grim for the Biden tax plan.
“I don’t want to say that the fight is over on that quite yet, because I know that there are still proponents of that. But I think that they are hard fights,” Fratto said. “On the corporate side, coming out of the economic situation we’ve been in, you can make a case that you don’t want to squelch the return to growth and job creation, when there are still many millions of people out of work relative to pre-COVID.”
Even Sen. Mitt Romney (R-UT), who worked on the Senate’s compromise infrastructure plan, has been resolutely against hiking taxes. Sen. Joe Manchin (D-WV), who commands the Senate’s swing vote, has said he is “open” to the idea of a second infrastructure bill and to rolling back some of the former administration’s tax credits, but his vote hasn’t been won yet.
Analysts do seem to suggest, according to the New York Post, that Biden’s tax hikes could also hurt wages in the short term, dealing a blow to a currently recovering economy.
The biggest hurdle to Biden’s success could be his own party. According to NBC News, a bipartisan group of Republicans and Democrats have pressed for the House to pass the compromise infrastructure bill, bucking Speaker of the House Nancy Pelosi’s (D-CA) to pass the two infrastructure bills at the same time or not at all.
The message sets up a showdown between House progressives and the Speaker, who desperately want the expansion in child care, education, and environmental funding the bill provides, and more practical legislators who say the first infrastructure bill is sufficient for the time being, and that the second, “human infrastructure” bill can wait until Congress returns from its summer recess.
“The Senate plans to move first to pass both proposals in the coming weeks — or months — after it returns from its Fourth of July recess. Senate Majority Leader Chuck Schumer (D-NY), has said he aims to move toward votes on the bipartisan framework and a budget resolution that would allow Democrats to approve a second bill without Republican support,” NBC News reported.