President Biden’s infrastructure plan is getting strong pushback from Republican lawmakers, making passage along party lines its likely path
After Biden announced his $2 trillion dollar infrastructure plan last week, Republicans have opposed significant aspects of the plan from corporate tax increases down to the size of the bill. GOP criticism makes it near certain that Democrats will have to pass an infrastructure plan through reconciliation, which would limit the scope of the public finance provisions it could contain.
“If lawmakers are very quickly able to deduce that there is not going to be any Republicans support for almost anything, then they might pivot and go down the reconciliation route," said Tom Kozlik, Hilltop Securities’ head of municipal strategy and credit.
“Do they have to end up going to reconciliation? Maybe,” Kozlik said. “What lawmakers will have to try to figure out is how much bipartisan cooperation they’re going to need and how much time they’re going to spend on trying to get it.”
Reconciliation is a tool that allows lawmakers to conform tax and spending levels to the levels set in a budget resolution. Just fifty votes plus Vice President Kamala Harris’ tiebreaking vote would be needed to pass legislation.
Some stakeholders worry that if an infrastructure bill does go the reconciliation route, long-desired municipal bond provisions like direct pay bonds would be cut short because of a ten-year horizon. All costs would have to incurred within 10 years, contrasting with bonds’ decades-long life.
Over the weekend, a number of key senators stood against Biden’s plan, specifically the administration’s proposal to raise the corporate tax rate and include nontraditional infrastructure.
Sen. Roger Wicker, R-Miss., told NBC's Chuck Todd on Meet the Press that he opposed Biden’s plan to pay for infrastructure.
“How could the president expect to have bipartisanship when his proposal is a repeal of one of our signature issues in 2017, where we cut the tax rate and made the United States finally more competitive when it comes to the way we treat job creators?” Wicker said. “He reverses all that.”
In 2017, the corporate tax rate was reduced to 21% as part of the Tax Cuts and Jobs Act.
Wicker is known as generally supportive of muni tax provisions. He reintroduced his bill to restore tax-exempt advance refunding in February with Sen. Debbie Stabenow, D-Mich.
When asked about the possibility of garnering support from 10 Republican lawmakers, Sen. Roy Blunt, R-Mo., and Wicker’s staff referred to comments made to media throughout the weekend.
Blunt told Fox News on Sunday that an infrastructure upgrade is needed, but criticized Biden’s plan for spending less than a third of the price tag on transportation infrastructure.
“I think it's a big mistake for the administration,” Blunt said. “They know I think it's a mistake. And I also think it would be an easy victory if we go back and look at roads and bridges and ports and airports and maybe even underground water systems and broadband.”
Blunt said he told the White House that they have "an easy bipartisan win here if you'll keep this package narrowly focused on infrastructure, and then the other 70 or so percent of the package that doesn't have very much to do with infrastructure if you want to force that in a partisan way, you can still do that.”
Blunt also proposed cutting Biden’s plan to about $615 billion. GOP leader Mitch McConnell called Biden’s infrastructure plan a “Trojan horse” last week, and said he would “oppose it every step of the way,” according to media reports.
Sen. Shelly Moore Capito, R- W.Va., opposed Biden’s plan, calling it far beyond what constitutes infrastructure. The Senate Environment and Public Works Committee ranking member added that she would be open to advancing infrastructure legislation in a bipartisan manner.
Some moderate senators such as Sens. Joe Manchin, D-W. Va., Pat Toomey, R-Pa., and Susan Collins, R-Maine; have come out against Biden’s plan citing the price tag and the corporate tax rate increase.
Democrats would need at least 50 votes in reconciliation. Other Democratic lawmakers have said Biden’s plan isn’t big enough. Though the House of Representatives doesn’t have as slim margins as the Senate, Rep. Alexandria Ocasio-Cortez, D-N.Y., said $2 trillion was not enough. News reports say she is eyeing as much as $10 trillion over ten years.
This comes as three House Democrats said they wouldn’t support any of Biden’s tax hikes unless the plan includes a repeal of the $10,000 cap on state and local tax deductions.
House Speaker Nancy Pelosi has said she wants to have an infrastructure bill approved by July 4, leaving less time for bipartisan compromises.
“That means that they want this to happen relatively quickly,” Hilltop’s Kozlik said.
