Blog No. 285. Has Big and Bold Buried Bipartisan?

Those who voted for Joe Biden in order to restore dignity, decency and empathy to the White House, have been well rewarded by the President’s demeanor in office. Biden voters have also been rewarded by having a President with a depth of experience about how our government works and our country’s role in world affairs. He has appointed an array of talented individuals who not only satisfy a demand for diversity, but are well equipped to meet the challenges they have been given.

In terms of accomplishments, the War on the Coronavirus has not yet been won, and threats of variants and of reckless human behavior still loom. Biden, however, has brought energy, expertise and candor to the battle, and the remarkable increase in the pace of vaccinations gives reason for hope. Not so hopeful is the situation at our Southern border. Vexing problems at the border have plagued every president in recent years, and Biden is no exception. Whether or not deemed a “crisis,” conditions at the border are extremely troubling, and whether Biden can somehow fashion them into a measure of accomplishment remains to be seen.

Also remaining to be seen is whether Biden can find a way of forging a productive relationship with Congress. If there are areas of disappointment, or at least misgivings, for moderates, they lie in the extent of Biden’s deference to the progressive wing of his Party and in his apparent failure or inability to gain bipartisan support for his proposals. Will his insistence on “big and bold” approaches succeed, or will it foreshadow defeats in the 2022 Congressional elections? Apart from Biden’s character and personality, a key element of his appeal as a presidential candidate lay in his expressed determination to seek bipartisan cooperation. In office, however, that determination has little to show for it. Biden’s rhetoric of bipartisanship has continued, but substance has been hard to find.

In the case of the American Rescue Plan, Biden’s $1.9 Trillion program for Covid-related relief, much was made of Biden’s invitation of ten Republican moderates for a White House meeting on February 1. The Republicans had a proposal for a scaled down bill of approximately $600 billion. While the meeting was cordial, it did not lead to negotiations. There is no way of knowing whether the parties could have reached a mid-level compromise (at, say, $1.2 trillion) if they had kept at it, but there is no indication that the White House was interested in a compromise at any level. No significant changes were made to the bill in response to Republican criticisms or suggestions, and a bill for the full $1.9 trillion was passed through the reconciliation procedure without a single Republican vote.

Biden has now proposed a sweeping American Jobs Plan with a price tag of over $2 trillion. It is often referred to as an infrastructure bill, and it does provide funding for traditional infrastructure projects, such as roads, bridges and airports. Its scope, however, is far broader, and includes, for example, not only a variety of projects to address climate change, but a whopping $400 billion to improve access to quality, affordable home or community-based care for the elderly and people with disabilities (creatively dubbed by the White House “the infrastructure of care.”). In order to have some notion of the staggering range and complexity of the Plan, it is well worth at least a brief perusal of the summary provided by the White House Fact Sheet.

Moreover, it is anticipated that a second proposal, addressed to “social” or “human” infrastructure will soon be coming down the pike. This plan (yet to be given its own catchy title) reportedly may include such diverse elements as universal pre-K education, free community college, paid leave for workers and reducing the cost of childcare. There are no reliable estimates of the total cost, but some observers expect that it may be in the range of another $2 billion.

How is it all to be paid for? According to Biden’s proposal, the American Jobs Plan is to be financed by an increase in corporate taxes. The centerpiece of the corporate tax proposal is an increase in the corporate rate from 21% to 28%, compared to 35% prior to the Trump tax cut. (Other provisions are primarily intended to ensure that corporations cannot avoid taxes on profits generated overseas.) The proposed rate increase immediately generated lively debate along predictable lines, with strong resistance from Republicans and the business community.

Surprisingly absent from the debate has been any recognition of the fact that, because of various exemptions and deductions, the taxes paid by many corporations do not approach the nominal rate. According to one study, 379 profitable Fortune 500 companies paid on average 11.3 percent on their 2018 income. Some 91 of those companies, including Amazon, Chevron, Halliburton and IBM, paid no federal income tax that year. Because of the way exemptions and deductions are focused, industrial machinery, gas, oil, electric and chemical companies tend to have the lowest effective rates, often less than 5 percent. For whatever reason, the Biden plan does not address those exemptions and deductions, but if one is looking for revenue and fairness, they would seem to cry out for scrutiny.

The second, or social, phase of the infrastructure plan is expected to be financed by increases in individual taxes, the size and shape of which have yet to be disclosed. Biden has indicated that he will not seek to impose a tax increase on those earning less than $400,000 a year, but it is not clear whether that cap applies to joint filers as well as single filers. In any case, it is doubtful that Biden can gain the support of any Republican (let alone the magic ten required for cloture), for any tax increase. If he cannot, that appears to leave two options for passing the bill in its present form: eliminating or significantly modifying the filibuster rules, or proceeding by reconciliation.

The filibuster, and the pros and cons of changing it, are subjects too complex for discussion here. Suffice it to say that, for the present, there does not appear to be the unanimous support among Senate Democrats that it would take to eliminate or restrict it. That leaves reconciliation. President Biden has made it clear that while he will listen to Republican ideas, and that he seeks their support, he is prepared to take the reconciliation path again. If he does, it will be a path of considerable peril.

Most readers will presumably be somewhat familiar with reconciliation from its use to pass the American Rescue Plan. (An excellent explanation has been provided by David Wessel for the Brookings Institution.) Essentially, reconciliation permits passage of a bill free from filibuster and by a majority of a single vote; to qualify for the procedure, the bill, and each of its operative provisions must make changes to a previously adopted budget resolution. In the past, it has been understood that reconciliation could be used only once for a fiscal year.

Under Biden, the American Recovery Plan was reconciled with the budget resolution for Fiscal 2021 and the American Jobs Plan could be reconciled with a budget resolution for Fiscal 2022. That, however, would leave no reconciliation portal remaining for Biden’s social infrastructure plan. It has been reported, however, that Majority Leader Chuck Schumer is considering the possibility of carving out a new one. An article in the Hill indicated that Schumer is eyeing a novel interpretation of an obscure section of the Congressional Budget Act to enact a second reconciliation for Fiscal 2021. The legal and political ramifications of such an arguably radical step remain to be seen.

Legalities aside, there is reason to question whether reconciliation, with no bipartisan support, is an appropriate vehicle for a collection of initiatives so massive, far-reaching and complex. Biden and others have described the American Jobs Plan as “transformative” or “transformational,” and, if passed, so it may well be. If that plan is followed by a comparably massive plan for social infrastructure, the term will be justified beyond question. Moderate Democrats, however, may have grave, or potentially fatal, reservations about the use of reconciliation for such a gargantuan piece of legislation. Senator Manchin has been the most outspoken, (“I’m not going to do it through reconciliation”), but others reportedly harbor similar sentiments.

On the Republican side, Senator Roy Blunt said, in a Sunday interview with Chris Wallace, that if the bill were narrowed to traditional kinds of infrastructure projects, at a cost of perhaps one-third of the $2.25 trillion, it would have Republican support. But he seemed adamant against paying for a smaller bill with any inroads on the corporate rate reduction established in Trump’s tax package. Pressed for a funding alternative, Blunt was vague. He referred to such things as user fees (e.g. the gas tax), public private partnerships and an infrastructure bank. But such approaches have been discussed for years without gaining traction in Congress. And even those approaches would require some contribution of federal funds from some source (which Blunt did not identify). Nevertheless, if Blunt’s comments reflected at least a glimmer of possible bipartisanship, they should not be dismissed out of hand. Specifically, there could be merit in proceeding with the infrastructure plan in steps, starting with the most saleable.

There is no way of telling how all this is going to turn out. If Democrats are unable to pass an infrastructure bill by reconciliation or otherwise, they are unlikely to be rewarded for their failure by voters in 2022. If they are successful, they may be rewarded if there are observable signs of the promised benefits and there is no decline in the economy that Republicans can blame on the tax increase. We shall see.

Apart from infrastructure, there are other areas where bipartisan cooperation may be possible if broad legislation is narrowed. Such areas include voting rights and election laws (For the People Act, H.R. 1 and S. 1), immigration (The American Dream and Promise Act of 2021) and gun control (H.R. 8, Bipartisan Background Checks Act of 2021 and H.R. 1446 the Enhanced Background Checks Act of 2021). There is more to be said on each of those topics, but for now I will close with the thought that it will be the task of Biden and leadership in Congress, and particularly the Senate, to persuade progressives not to let the perfect (aka the biggest and boldest) be the enemy of the good.

Put another way, Biden and Democrats must not lose sight of 2022. That means concentrating on bills that can actually pass, demonstrating their capacity to govern, or bills on which voters can be persuaded that Republican opposition is irresponsible. Following such a course will give them the best chance of retaining, or even expanding, their control of both houses of Congress, and that, in turn, would give them a foundation for 2024.