Five hurdles Democrats face to pass an infrastructure bill

President Biden is trying to show he’s open to bipartisan deal-making on his infrastructure proposal, but he’ll have to address divisions in his own party first.

Democrats are already at odds over the size of the sprawling package, how to pay for it and what should be included. 

Here are five hurdles Democrats face in getting a bill to Biden’s desk.

 

How long to wait for bipartisanship

Biden promised to work with Republicans legislatively during his 2020 campaign, and on Monday he hosted a bipartisan group of lawmakers at the White House to talk about the infrastructure plan.

The outreach effort is being hailed by moderate Democrats who face pressure to be, or at least appear, bipartisan in crafting legislation. They’re urging patience to other lawmakers to give such efforts enough time to develop.

Liberals are wary that Republicans will water down a bill to the point that it’s ineffective. They’re pressing Democratic leaders not to spend too much time haggling with Republicans and get to the business of moving the biggest package possible, even if that means it passes with only Democratic votes. 

“We can’t wait for Republicans to have some awakening on climate change here,” Rep. Pramila Jayapal (D-Wash.), the head of the Congressional Progressive Caucus, told reporters late last month. “We’ll be waiting forever if we do that.”

Biden, Speaker Nancy Pelosi (D-Calif.) and other Democratic leaders will have to bridge this divide.

 

Corporate tax rate

Biden has proposed raising the corporate tax rate from 21 percent to 28 percent. That’s roughly in the middle between what progressives and centrists in his party support.

Sen. Bernie Sanders (I-Vt.) has proposed returning the corporate tax rate to 35 percent, the level before the GOP’s 2017 tax-cut law went into effect.

But Sen. Joe Manchin (D-W.Va.), a key centrist, said this month that Biden’s 28 percent proposal was too high. Manchin expressed openness to raising the rate to 25 percent.

Democrats are sure to face pressure from powerful corporate leaders who largely aren’t keen on raising the tax rate.

An internal survey released Monday from the Business Roundtable, a top business group which opposes the corporate tax hike, found that 98 percent of its members believed it would have moderate or very significant adverse effects on their companies’ competitiveness. About 71 percent said it would make it harder for them to hire workers, and about two-thirds predicted it would lead to slower wage growth.

 

State and local taxes

One of the most controversial parts of former President Trump’s 2017 tax overhaul was the installation of a new cap on the federal deduction for state and local taxes, known as SALT, which effectively imposed a tax hike on many residents of wealthier states.

Those states tend to lean Democratic, and last month a handful of Democrats representing them — including Reps. Bill Pascrell (N.J.), Josh Gottheimer (N.J.) and Tom Suozzi (N.Y.) — vowed to oppose any tax reform proposal that fails to lift the cap.

The threat carries weight, since Democrats enjoy only a slight majority in the House and just a handful of party defectors could sink the entire infrastructure package — and with it one of Biden’s most prominent domestic priorities. 

The SALT debate may prove to be a hassle for Democratic leaders, who have spent the last four years roasting Republicans for enacting a tax law that largely benefited wealthier taxpayers while heaping trillions of dollars onto the federal debt. Some liberals have cautioned that eliminating the SALT cap would undermine the Democrats’ message by expanding on both of those trends. 

Still, the concept has a powerful ally in Pelosi, who says Republicans adopted the SALT cap merely to punish blue states.

“Hopefully we can get it into the bill,” Pelosi told reporters earlier this month.

 

Immigration reform

Progressives haven’t drawn any red lines, but a priority for the Congressional Progressive Caucus is to get immigration reform provisions in the larger package.

Progressives are calling for providing a path to citizenship for certain immigrants, including essential workers, temporary protected status (TPS) recipients and people who came to the U.S. as children who are often referred to as “Dreamers.”

“It’s time to go big, and it’s time to go bold and enact these as part of a single, ambitious package,” Jayapal said.

Providing legal status to Dreamers and TPS holders is broadly popular among Democrats. The House passed legislation last month to grant those groups permanent residency with no Democratic defections. 

But whether immigration provisions can actually get in the bill is in question. 

As with the minimum wage hike in the House’s original COVID-19 relief bill earlier this year, immigration provisions might not make it past Senate rules limiting any package passed through the filibuster-proof reconciliation process to budget-related policy.

 

The price tag

Biden’s proposal to invest in traditional physical infrastructure like roads and bridges as well as public transit would cost more than $2 trillion over eight years.

It also includes billions to expand broadband in underserved and rural areas, access to long-term care services for the elderly and people with disabilities, and research and development for clean energy technologies. 

Biden is expected to unveil additional proposals later this month that are expected to focus on child care and health care, including permanent paid national parental and sick leave as well as investments in access to child care. 

“I’m prepared to negotiate as to the extent of my infrastructure project as well as how we pay for it,” Biden said ahead of his Oval Office meeting with lawmakers on Monday. “I think everyone acknowledges we need a significant increase in infrastructure. It’s going to get down to what we call infrastructure.”

Republicans have called for a smaller package closer to $600 billion in investments that are more limited to physical infrastructure. But some liberals are suggesting that Biden should go in the opposite direction.

Rep. Alexandria Ocasio-Cortez (D-N.Y.) said it “needs to be way bigger.”

“This is not nearly enough. The important context here is that it’s $2.25T spread out over 10 years,” Ocasio-Cortez said, comparing it to the $1.9 trillion COVID-19 relief package that Biden signed into law. 

She noted that the earlier bill’s funding was for this year alone, with some provisions lasting two years.