President Joe Biden has a simple message for fellow Democrats about his plan to raise taxes to remake large swaths of the American economy: look beyond the bottom line.
Biden is trying to persuade Democrats to embrace a more emotional argument, namely that the plan is fair, that it increases taxes on those who can afford to pay more and spends money on programs targeting children and the middle class.
The president has proposed more than $3 trillion worth of revenue increases, primarily through higher taxes for corporations and the country’s richest households as well as greater IRS enforcement that would target the wealthy. But key lawmakers voiced doubts this past week about the size and possible impacts on the economy as congressional committees considered the measures and a wide array of business groups sifted through the details to highlight what they oppose.
Interviews with three administration officials suggest the White House is comfortable with settling for a lower price tag as part of the negotiating process, so long as the end result produces a tax system that voters judge as fair. The officials, who were not authorized to publicly discuss ongoing negotiations and spoke on condition of anonymity, said Democrats are united on this front.
If the playbook of appealing to voters sounds familiar, it was the same strategy used by Biden to cement a bipartisan infrastructure deal earlier this year.
“This is a commonsense thing that people agree with,” said Kate Berner, White House deputy communications director. “They don’t understand why companies can park profits overseas and pay no money in taxes. They don’t understand why a hedge fund manager pays a lower tax rate than a pipefitter. It’s something that people think of as fundamentally broken.”
But in a sign of uncertainty, the administration has also stayed publicly quiet about how low Biden is willing to go in slimming down the package. The administration also finds itself grappling with interest groups that the White House views as intentionally misrepresenting its tax plans in hopes of eroding support. Officials say that claims of job losses by the U.S. Chamber of Commerce and other groups are overblown and fail to consider investments in family leave, children, child care, health care and the environment that they believe will help the economy.
The president outlined his tax plans in his budget proposal, setting a baseline for congressional committees. But some Democratic lawmakers, including West Virginia Sen. Joe Manchin, have already objected to the amount of spending and the taxes being raised. Manchin early on raised concerns about Biden’s proposal to increase the corporate income tax rate from 21% to 28%.
“If you’re going to be a leader in the world and the superpower of the world, you better have a competitive tax rate, period,” he said.
While Manchin and Sen. Kyrsten Sinema, D-Ariz., both voted for the budget blueprint that allowed Democrats to begin crafting the social programs package, they have made it clear they will not support the proposed topline spending figure of $3.5 trillion over 10 years.
“Establishing an artificial $3.5 trillion spending number and then reverse-engineering the partisan social priorities that should be funded isn’t how you make good policy,” Manchin wrote in The Wall Street Journal.
On the House side, Democrats can afford to lose only three votes and still pass the spending bill if the GOP unanimously opposes it, as expected. There have already been early signals of unrest, with Rep. Stephanie Murphy, D-Fla., voting against two sections of her party’s bill during a committee hearing this past week, and Rep. Ron Kind, D-Wis., joining her in voting no on one of those votes.
“I don’t know how much we’re spending, how much we’re raising, how we’re spending some of the money and how we’re raising any of the money,” Murphy complained.
Under Biden’s initial proposal, changes to corporate taxes would raise roughly $2 trillion over a decade, with about 70% of that sum coming from putting the corporate rate at 28% and revising a global minimum tax on profits. An additional $755 billion would come from higher individual taxes on the wealthiest Americans, including an increase to the rate charged on profits from the sale of capital assets such as stocks or real estate.
Increased enforcement by the IRS would yield roughly $460 billion. But a Treasury Department analysis indicates that figure would grow to $1.6 trillion in the following decade as more IRS employees were fully trained, one of the key arguments for saying that the budget would be fiscally responsible.
Part of the challenge for Democrats is the memory of voter backlash against proposed tax increases during the 1984 presidential election against Ronald Reagan nearly four decades ago.
Many older Democrats and those from more conservative areas fear that voters will penalize them if taxes increase by too much, even if Biden and advocacy groups push the argument that voters are now rejecting Reagan-ism and will reward Democrats for raising taxes on companies and the wealthy.
“We’re in a generational struggle within the Democratic Party,” said Frank Clemente, executive director of the advocacy group Americans for Tax Fairness. “We’re in a very different era, and these Democrats haven’t caught up with the era we’re in.”
Americans for Tax Fairness is among the organizations trying to persuade Democratic lawmakers to back Biden’s tax proposals. The groups have commissioned a national polls and six battleground state polls and mobilized 97 national groups and 620 state organizations to back the plans on the premise that they are popular.
Even if business groups oppose parts of the plan, their objections can vary by industry. The Chamber of Commerce has emphasized its dislike of higher rates for corporations and capital gains, while the American Bankers Association sent a letter to lawmakers on Tuesday voicing concerns about the increased reporting requirements to the IRS on customers’ accounts.
The Retail Industry Leaders Association, whose members include Target, Best Buy and other major retailers, urged congressional leaders Thursday not to raise corporate tax rates, but to boost IRS enforcement and ensure that all companies pay at least a minimum tax before an increase in the corporate tax rate is considered.
“We are doing a lot of meetings educating members on this issue and making sure they understand how a rate increase will harm retail and the importance of ensuring all profitable companies contribute,” said Melissa Murdock, a vice president with the trade group.
The American Petroleum Institute, the largest trade group representing the U.S. oil and gas industry, is lobbying to beat back a proposed fee on methane emissions that supporters contend would slow climate change and dramatically improve air quality in communities located near oil and gas facilities.
The group is running a $1 million-plus ad campaign that tells viewers when it comes to energy, “Washington wants to chart an extreme course” that could make energy more expensive and less reliable.”
Sen. Bernie Sanders, a Vermont independent, spoke about the full-court press to reshape or even kill the tax increases.
“You’ve got all of the big money interests of the country fighting us day after day after day,” Sanders said. “At the end of the day, in my mind, what we are trying to do is to restore the faith of the American people that their government can work for them, not just for lobbyists on Capitol Hill or the big money interests. And we are going to prevail.”
But even as trade groups focus on individual details of a complex budget, the topline proposal to fund $3.5 trillion in additional spending over the next decade is the main obstacle. Neil Bradley, executive vice president and chief policy officer at the Chamber of Commerce, said the proposed tax increases are unprecedented but also inadequate to pay for all the programs while complying with Senate rules on budgeting.
“’I’ve been doing this for 25 years,” Bradley said. “Based on that experience, it’s my belief that a package of this size collapses under its own weight.”
Dems Fear Biden’s Domestic Agenda Could Implode
Internal Democratic discord has wounded President Joe Biden’s massive social spending plan, raising the prospect that the package could stall out, shrink dramatically — or even fail altogether.
Myriad problems have arisen. Moderate Senate Democrats Joe Manchin (W.Va.) and Kyrsten Sinema (Ariz.) continue to be a major headache for party leadership’s $3.5 trillion target. The Senate parliamentarian just nixed the party’s yearslong push to enact broad immigration reform. House members may tank the prescription drugs overhaul the party has run on for years. And a fight continues to brew over Sen. Bernie Sanders’ (I-Vt.) push to expand Medicare.
“If any member of Congress is not concerned that this could fall apart, they need treatment,” said Rep. Emanuel Cleaver (D-Mo.), who warned his party “will pay for it at the polls” if it fails in enacting Biden’s agenda. “Our caucus has the feeling of freedom to support or oppose leadership.”
Those headwinds threaten to sap the momentum from this summer, when Biden clinched a bipartisan infrastructure deal in the Senate and found support from all corners of his party for a budget setting up his sweeping spending bill. Now, Manchin is calling for a pause, moderates are resisting key components of the legislation and a new fiscal fight over the debt limit is heating up.
Those dynamics have Democrats essentially looking for an internal reset from a monthslong debate over Biden’s agenda that keeps publicly playing out through leaks, lines in the sand and fights over the topline number.
“I wish that we could all be more on the same page, in terms of timing, of the need to push the [American Families Plan],” said Sen. Mazie Hirono (D-Hawaii). “I’m hopeful we are going to have a meeting of the minds and not wait until next year … we better have a Plan B.”
The multi-problem pileup comes at a critical moment for the party and for Biden, who needs a legislative win amid slumping approval ratings. But though polls show much of his social spending bill is popular outside Congress, winning approval among Democrats’ slim majorities has been harder.
With a three-vote margin in the House and a 50-50 split in the Senate, Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer can’t afford to alienate either wing of their fractious party or else the chances for either of Biden’s signature domestic victories could evaporate all together.
“None of us know where this is gonna go,” said Rep. Dean Phillips (D-Minn.). “This is where leadership is made or broken, plain and simple. And that’s true of the president, that’s true of speakers, that’s true of majority leaders.”
Manchin has been the most outspoken Democrat, publicly asking for a pause on the big spending bill with inflation rising, but the West Virginian declined to lay out his thinking Monday night when asked just how long he wants his party to put the brakes on: “Let’s see if you understand English: not a word.”
It’s unclear exactly how many Democrats are siding with prominent House and Senate moderates. One centrist Democrat up for reelection next year, Sen. Maggie Hassan (D-N.H.), declined to say whether she’s comfortable with the $3.5 trillion spending number on Monday, or whether she agrees with pausing the legislation.
“We are at a critical moment,” said Senate Majority Whip Dick Durbin. “The total amount to be spent has to be negotiated with those who are questioning the $3.5 trillion. So, this is the key week.”
Democrats are broadly rejecting Manchin’s overtures to stall the social spending plan, arguing doing so is akin to killing the bill. If Democrats don’t keep positive momentum behind their effort to fight climate change, improve child care and raise taxes on the wealthy, they worry that the whole thing could fall apart.
“You can’t stop this process. If you stop it it won’t get started again,” said Sen. Ben Cardin (D-Md.). “You’ve really got to keep it moving, there’s no magic date, but as you get closer and closer to other deadlines, this one gets more difficult.”
For progressives, the dissension over a bill they see as vital for delivering on their party’s priorities is enough for some to weigh tanking the bipartisan infrastructure bill negotiated by centrist Democratic senators. Many on the left say they’ve already compromised by agreeing to a $3.5 trillion spending bill rather than $6 trillion or more proposed by progressive leaders like Sanders and Rep. Pramila Jayapal (D-Wash.).
What’s more, the party’s long-running goal of enacting immigration reform is now in major doubt, as there may be no path to including legal status in the reconciliation bill and bipartisan talks have repeatedly stalled out. Sen. Jon Tester (D-Mont.) acknowledged “the immigration stuff is a setback, but certainly not a death knell.”
And progressives have grown increasingly annoyed by what they see as grandstanding by Manchin and Sinema. Just as behind-the-scenes negotiations on the social bill get underway, one of the two prominent moderates keep blasting out statements that jolt the talks and stall what progress has been made, they say.
“I am very tired of it,” said Rep. Jamaal Bowman (D-N.Y.). “I don’t think they are making their decisions based on the needs of the American or even the people in their own state.” He added that they seem more motivated by “corporate interest.”
But Democrats close to the centrists say progressives are vastly overplaying their hand. A group of five to 10 House moderates have signaled to leadership that they would be willing to let the infrastructure bill fail rather than be held hostage by liberals over the broader spending bill. It’s a more attractive alternative to them than having to vote for painful tax increases to pay for an unrestrained social safety net expansion, according to a person familiar with the discussions.
“I think it would be counterproductive to reconciliation,” said centrist Rep. Ed Case (D-Hawaii), speaking about progressive threats to tank the bipartisan bill without the broader spending plan.
“This fiction that linking the two bills will somehow enact leverage on the reconciliation side — I think it’s just that, a fiction.”
Despite the Democratic handwringing, a spokesperson for Biden said the administration is lobbying an array of members and “good progress is being made.
”The administration is “articulating the need to invest in families over big corporations at this crucial inflection point and ensure our economy delivers for the middle class,” said Andrew Bates, a White House spokesperson.
Meanwhile, progressives are not as united as the smaller, tight-knit band of House and Senate moderates that forced votes on the $550 billion bipartisan infrastructure bill in the Senate this summer and a commitment for one in the House next week. The Progressive Caucus has a sprawling membership that is unlikely to vote in lockstep — and may not have the oomph to tank the bill if House Republicans help pass the bipartisan legislation.
“There is absolutely a level where it’s not just something is not better than nothing, but something can actually do more harm,” said Rep. Alexandria Ocasio-Cortez (D-N.Y.) of the infrastructure bill. “That’s why we are holding firm on our line. …This isn’t just a flight of fancy.”
Trump Ripped Into President Joe Biden’s Afghanistan Withdrawal
Former President Donald Trump ripped into President Joe Biden’s Afghanistan withdrawal saying the actions were “indefensible.”
His comments came during an interview on Glenn Beck’s radio show on Tuesday.
Asked if the current administration was following his withdrawal plans, Trump said, “No. Not even a little bit — and we had a great plan. It was based on many conditions. For instance, you can’t kill American soldiers.”
He said he warned the Taliban that “if you kill any Americans or any American soldiers, we’re going to hit you harder than any country has ever been hit before.”
“For approximately 18 months, not one American soldier was killed,” he said. “You have to understand I did want to get out with dignity and I wanted to take our equipment out and I didn’t want to get soldiers killed.”
He said he has spoken to “numerous” parents of those American soldiers who died in a bomb blast at the Kabul airport during the withdrawal.
“They will only speak to me,” Trump said. “They won’t speak to Biden because they view what he did as having killed their child. What he did was just indefensible. He took the military out first and he left all these people. And we became beggars to get the people out.”
Trump noted Apache helicopters were also left behind.
“These are really expensive weapons,” he said. “They (the Taliban) have 28 of them. And they’re brand new. They’re the latest model. Why wouldn’t (the Biden administration) bring pilots in to fly out the planes or helicopters. It would have taken them an hour.”
Trump noted European nations respected the U.S. greatly during his administration.
“Now, they don’t,” he said. “They’re laughing at us like we’re fools. And the way (Biden) got out of Afghanistan was, in my opinion, I think it was the most embarrassing event in the history of our country.
“If you get out of Afghanistan, you leave with great dignity. You leave with your weapons. We could have had our soldiers saved, our people out, everything beautiful …”
Trump also blasted Gen. Mark Milley, chairman of the Joint Chiefs of Staff.
“Peril,” a new book by journalists Bob Woodward and Robert Costa, claims Milley had sought to assure China’s Gen. Li Zuocheng of the People’s Liberation Army in calls that the United States was stable and not going to attack during the final months of the Trump administration. And, if there were to be an attack, he would alert his counterpart ahead of time.
“I learned early on (Milley) was a dope,” Trump said.
Ted Cruz Slams The Democrats In Latest Interview
Republican Senator Ted Cruz of Texas recently slammed the Democrats for bowing down to their radical left-wing comrades in office as they prepare to pass a massive $3.5 trillion budget that will bring our nation economic difficulties in the years to come.
“Bernie Sanders is a wide-eyed and admitted socialist. He says this is the most transformational bill in a generation. He means that it; it is trillions in spending. It is trillions in new taxes. It is the Green New Deal, it is — everyone who pays taxes in America will see their taxes go up under this massive proposal. Individual taxes are going up, corporate taxes are going up, small business taxes are going up, capital gains taxes are going up, the death tax is going up, seniors are getting hammered, farmers, ranchers, small businesses; it is disastrous,” Cruz stated in his scathing interview.
The plan of the Biden administration to impose severe tax hikes will indeed hurt not only the corporations but small businesses and even retail investors. The pandemic has put a heavy strain on the financial well-being of the average American and this taxation plan can destroy their goal to preserve the value of their hard-earned money. Inflation is a beast that will hurt us all and increased taxes will further complicate matters for our troubled economy.
“Whether it passes or not will depend on 50 Democrats in the Senate. Do they get Joe Manchin and Kyrsten Sinema to go along? I can tell you Chuck Schumer is putting a world of hurt and pressure on the two of them. I hope they stand their ground, that they have demonstrated some real courage so far, standing up to the crazies in their party,” Cruz said, praising a couple of Democrats for bravely going against the grain.
The former Texas Solicitor General also hit president Biden for trying to divert attention from his epic Afghanistan blunder, by imposing more strict vaccine mandates.
“They want to change the topic from Afghanistan. It’s why Biden issued this completely illegal and unconstitutional vaccine mandate, because he wanted to change the topic from the disaster in Afghanistan,” Cruz said.
“The vaccine mandate is going to be struck down in court. They know that, but the president is defying the law because he wanted the press to start defending him and stop talking about the disasters in Afghanistan. And he’s counting on a bunch of big businesses in particular, forcing their employees to comply before the matter is ever adjudicated. And before the order is struck down,” Cruz added.
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