Biden offers tax concession in infrastructure talks with key Republican

President Biden signaled at a private meeting on Wednesday that he would be open to significant revisions on the size of his infrastructure package and how it would be paid for in order win Republican backing, outlining a plan for about $1 trillion in new spending financed through tax changes that do not appear to raise the top corporate rate. 

While Biden has not abandoned his support for the tax increase generally, believing profitable companies must pay their fair share, the moves still mark a potential new concession in stalled talks over funding to improve the country’s roads, bridges, pipes and ports. The Conjuring – Per Ordine del Diavolo

At issue is the component of Biden’s original infrastructure plan that would raise the corporate tax rate from 21 percent to 28 percent, unwinding the tax cuts the GOP adopted in 2017. Republicans have described this change as a political nonstarter as they seek to protect one of their accomplishments under former President Donald Trump. Fast and Furious 9

In his meeting with the GOP’s top negotiator, Sen. Shelley Moore Capito (R-W.Va.), Biden raised the possibility he could take the proposed increase off the table in an attempt to broker a compromise, according to a person familiar with the talks who requested anonymity to describe them. The president still intends to seek the tax increase, the source said, meaning the White House could pursue the policy outside of infrastructure talks -- or in the case that bipartisan negotiations ultimately collapse. Black Widow

In its place, Biden emphasized a different part of his proposal, which would amount to a new, minimum corporate tax of 15 percent. This change would seek to take aim at dozens of profitable U.S. corporations that pay little to nothing to the federal government annually, the source said. The White House also proposed stepping up enforcement on corporations and wealthy earners who rely on loopholes to lessen their tax burdens, according to the person familiar with the talks. Peter Rabbit 2 - Un birbante in fuga

Biden’s emphasis on these elements of his tax plan Wednesday marked an attempt by the White House to thread a delicate political needle. It aimed to preserve the president’s 2020 campaign pledge not to raise taxes on Americans making under $400,000 a year, while steering clear of the “red line” set down by Republicans who see the 2017 tax cuts as their crowning economic achievement. Spiral - L'eredità di Saw

Biden long has decried the fact that some of the country’s most profitable enterprises pay nothing in taxes. He stressed during his first-ever address to Congress last month that it is time to close “tax loopholes," urging lawmakers to “reform corporate taxes so they pay their fair share and help pay for the public investments their businesses will benefit from as well.”

Even with the new concession on taxes, though, the White House’s roughly $1 trillion plan still amounts to four times as much as Republicans have been willing to spend to improve the country’s roads, bridges, pipes, ports and Internet connections. Entering the meeting, GOP leaders had endorsed roughly $257 billion in new spending, while maintaining an unwavering opposition to any tax hikes to finance infrastructure reform.

Instead, GOP leaders have called on the White House to repurpose unspent coronavirus relief aid now that the pandemic is improving. The White House has expressed only a limited appetite for reprogramming existing stimulus dollars, perhaps around $70 to 75 billion, the source said.

Both sides are set to meet again Friday, though Republican leaders are still deciding whether to put forward another counter-offer or to walk away from the negotiations entirely, according to a second source familiar with the talks

Capito did not respond to a request for comment. The White House also did not respond. Politico first reported on the $1 trillion offer.

The latest exchange comes as top White House officials have started to signal that time is running out on striking a bipartisan deal. Biden has labored to secure Republican support on infrastructure after advancing his last economic policy priority, a $1.9 trillion coronavirus relief package, without GOP votes — though he has made clear that he is not willing to haggle indefinitely.

“Patience is not unending, and he wants to make progress. His only line in the sand is inaction,” White House press secretary Jen Psaki said Wednesday. “He wants to sign a bill into law this summer.”

Much as before, Biden could try to muscle infrastructure reform through Congress using only Democratic votes. But that path could be fraught with its own political challenges, given the wide array of opinions within the president’s own party over what infrastructure reform should entail, and how to pay for it. That includes the size of any potential corporate tax increase, which some Democrats support at a lower rate than Biden has proposed.

Some moderates, including Sen. Joe Manchin III (D-W.Va.), also do not yet appear willing to abandon talks. Without their full support, Democrats would have no ability to advance infrastructure reform on their own in the Senate using a tactic known as reconciliation, which would require all 50 Democrats to vote in lockstep.

Members of both parties have expressed concern with the number of large corporations paying little to nothing in federal income taxes. Fifty-five corporations in the Fortune 500 paid no federal income tax in 2020, according to a report by the Institute of Taxation and Economic Policy, a left-leaning think-tank.

Corporations have paid a declining share in federal taxes since the 2017 GOP tax law dramatically slashed the corporate tax rate from 35 percent to 21 percent. Businesses are able to zero out their tax obligations because of expansive tax credits offered by the federal government for research and development and other expenses, leading some firms to repeatedly pay nothing in federal income taxes. Many corporations also use a tax break for executive stock options that allow them to reduce their income taxes, ITEP said, while tax breaks for renewable energy investments and other capital expenditures allow major write-offs.

Biden has been personally fixated on the trend and called for reversing it. But it is unclear whether Republicans would support the measure and the president’s comments during the private meeting on Wednesday could be an attempt to draw out their position.

“This might be the kind of policy that could pick off a few Republican senators. But, keep in mind, Republicans have not really voted for a tax hike since 1990. So anything is going to be a lift,” said Brian Riedl, a former aide to Sen. Rob Portman (R-Ohio) now at the Manhattan Institute, a libertarian-leaning think-tank.

2. Dr. Anthony Fauci says publicly released email about lab leak is being misconstrued

In an interview with CNN on Thursday, Dr. Anthony Fauci said that an email he received last year from an executive at the US-based EcoHealth Alliance has been misconstrued and offered a hint of regret about a February 2020 email downplaying the need to wear a mask.

Earlier this week, news outlets including CNN, BuzzFeed News and The Washington Post obtained thousands of emails Fauci sent and received since the director of the National Institute of Allergy and Infectious Diseases became a household name early last year.
In one email sent to Fauci last April, an executive at EcoHealth Alliance, the global nonprofit that helped fund some research at China's Wuhan Institute of Virology, thanked Fauci for publicly stating that scientific evidence supports a natural origin for the coronavirus and not a lab release. (The origins of the virus remain unclear.)
"There are some of your critics who say this shows you have too cozy of a relationship with the people behind the Wuhan lab research," CNN's John Berman said to Fauci on New Day. "What do you say to that?"

"That's nonsense," Fauci responded. "I don't even see how they get that from that email."
Fauci then emphasized that the email was sent to him, and he noted the origins of the coronavirus are still uncertain.
"I have always said, and will say today to you, John, that I still believe the most likely origin is from an animal species to a human, but I keep an absolutely open mind that if there may be other origins of that, there may be another reason, it could have been a lab leak," Fauci told Berman. "I believe if you look historically, what happens in the animal-human interface, that in fact the more likelihood is that you're dealing with a jump of species. But I keep an open mind all the time. And that's the reason why I have been public that we should continue to look for the origin.
"You can misconstrue it however you want -- that email was from a person to me saying 'thank you' for whatever it is he thought I said, and I said that I think the most likely origin is a jumping of species. I still do think it is, at the same time as I'm keeping an open mind that it might be a lab leak."
In another email sent to Fauci on April 16, NIH director Francis Collins wrote "conspiracy theory gains momentum," a dismissive reference to the lab-leak hypothesis. But much of the email is redacted, and Fauci said he did not remember its substance.
"They only took about 10,000 emails from me, of course I remember. I remember all 10,000 of them. Give me a break," he said. "I don't remember what's in that redacted, but the idea I think is quite farfetched that the Chinese deliberately engineered something so that they could kill themselves as well as other people. I think that's a bit far out, John."

Berman also brought up a February 5, 2020, email Fauci sent to Sylvia Burwell, former secretary of the US Department of Health and Human Services, in which he did not recommend wearing a mask since she was traveling to a low-risk location. The email was sent at a time before coronavirus was declared a pandemic and before the CDC advised the public to wear masks for protection.
"A lot has transpired since then. If you had to go back and do it all over again, would you tell her something different? Do you regret that?" Berman asked Fauci.
"Let's get real here -- if you look at scientific information as it accumulates, what is going on in January and February, what you know as a fact, as data, guides what you tell people and your policies. If March, April, May occur, you accumulate a lot more information and you modify and adjust your opinion and your recommendation based on the current science and current data," Fauci told Berman.
"So of course, if we knew back then that a substantial amount of transmission was asymptomatic people. If we knew that the data show that masks outside of a hospital setting actually do work when we didn't know it then. If we realize all of those things back then, of course," he said. "You're asking a question, 'Would you do something different if you know what you know now?' Of course people would have done that. That's so obvious."