A Group of Centrists May Hold the Key to the American Jobs Plan. Few Are Happy About That.

Photo Courtesy of The Hill

Infrastructure isn’t very sexy, but done right it can be transformative. Both sides know infrastructure projects mean jobs and tangible evidence of progress to voters. They also know the Trump administration failed to ever hold an “infrastructure week” let alone put together a bill to vote on, so the politics of that failure is also on legislators’ minds. Currently, a group of centrist senators from both parties is convening on the infrastructure question, and they may wind up maneuvering a bill through to passage—or at least provide a framework acceptable to centrist Democrats whose votes are needed to pass it by a simple majority.

Talks over the American Jobs Plan, also known as the infrastructure bill, are currently stalled between the White House and Republicans, who are led by the other senator from West Virginia, Sen. Shelley Moore Capito. While President Biden has come down around $1 trillion from the $2.2 trillion that he originally asked for and the GOP has come up to nearly $1 trillion, the parties remain around $700 million apart when it comes to actual new spending. Biden does not want to use funds earmarked but as yet unspent from the Covid-19 relief bill for his infrastructure plan, while the GOP wants to draw heavily from that appropriation.

The parties are also without agreement as to how to cover the cost of any new spending. Republicans don’t want to budge off their legislative victory in 2017 that dropped corporate tax rates from 35 percent down to 21 percent, while Biden has pushed for them to be raised back up to the Reagan era level of 28 percent. Biden is focused on the fact that corporations have accounted for an increasingly lower share of federal tax revenues and very much wants to reverse that trend. In this, he has the support of a large majority of Americans.

Biden’s latest proposal, however, takes aim not at the corporate rate itself, which he has said he is willing for now to keep in place but revisit later, but on mandating a minimum tax for corporations of 15 percent to help pay for the Plan and on beefing up enforcement and collection, which could net hundreds of billions of dollars. Key to the success of this is getting other nations to agree to a worldwide minimum corporate tax so that big corporations can’t simply re-register in foreign countries that have looser tax laws. Republicans haven’t responded yet, but the proposal puts them on the defensive. After all, what good is a tax rate of 21 percent if a large number of corporations don’t even pay any?

But time is running out, and the sides remain far apart. Many liberal Democrats are urging Biden to go it alone with their votes under a special rule called Budget Reconciliation which, as we saw with the American Rescue Plan, doesn’t allow for the filibuster to prevent cloture. To do this, every single Democratic senator would have to be on board, and we are missing at least one: Sen. Joe Manchin has said he will not support any infrastructure bill that doesn’t have bipartisan support.

That is why Manchin’s current talks with a group of like-minded centrists, including Sens. Mitt Romney (R-UT), Rob Portman (R-OH), and Susan Collins (R-ME), bear watching. That group is expected to come out this week with its own proposals, which are likely to make no one but themselves happy, but which also means there is likely a third path forward. 

It isn’t clear if Manchin’s bipartisan requirement means that a single Republican vote will suffice, or that it must somehow have 10 to beat the filibuster (though the latter is presumably unrealistic). It could mean that his group’s proposal, or some version of it, is one he’s willing to push through via budget reconciliation rules to avoid the filibuster. During the American Rescue Plan passage, Sen. Manchin used his 50th vote to strip provisions such as the minimum wage hike out of it (even though it may not have survived a ruling by the Parliamentarian anyway), and he could do the same with the overall price tag or the corporate tax rate in the infrastructure bill, provided he had at least some bipartisan support from his group.

Biden leaves for Europe on Wednesday, and without a deal with Sen. Capito in place by then, the chances of a breakthrough dim considerably, though he has pledged his team will continue talks even in his absence. With Biden’s other legislative goals under serious doubt because of expected GOP filibusters, the White House is keenly aware that the American Jobs Plan may be the only chance for any significant achievement before the summer recess.