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Republican leaders told President Joe Biden on Wednesday that they will draw a hard line on raising taxes to pay for infrastructure, demonstrating the substantial challenges ahead for a potential bipartisan deal on Biden’s infrastructure and jobs plan.
Democrats and Republicans left the meeting saying they would try to zero in on areas of agreement they could reach on a bipartisan bill. In reality, they sound like they are starting from scratch. GOP leaders told reporters that they still had to reach an agreement with Democrats over what exactly meets the definition of infrastructure.
And both Senate Minority Leader Mitch McConnell and House Minority Leader Kevin McCarthy said tax increases are off the table, despite Biden proposing an increase in corporate taxes as a way to pay for a popular roads, bridges and broadband program.
"We're not interested in re-opening the 2017 tax bill. We both made that clear with the president. That's our red line," McConnell said at a press availability. "This discussion ... will not include revisiting the 2017 tax bill.”
Instead, party leaders said they would try to narrow down what, if anything, they can agree could be passed on a bipartisan basis in the Senate. Republicans see childcare, housing and other priorities as separate from an infrastructure bill.
Speaker Nancy Pelosi said the first physical meeting between congressional leaders and Biden made her “more optimistic” about a deal and that the confab “took us a few steps forward.” She also acknowledged there were some disputes, citing electric cars.
When asked about McConnell's tax comments, she replied: "He considers it sacrosanct. We have a different set of values."
The huddle came at a pivotal moment for his $4 trillion-plus infrastructure and jobs proposal.
The president is hoping he can get Republican support for sending hundreds of billions of dollars into the economy through an infrastructure package. But he’s facing a Republican Party trying to unify around opposition to his agenda and vowing it will not concede an inch on tax policy to help pay for Biden’s proposals.
“Generically, I am encouraged that there is room to have a compromise on a bipartisan bill that’s solid and significant and a means by which to pay for it without dropping all of the, all of the burden on middle-class and working class people," Biden said in remarks after the meeting.
The process is beginning to pick up speed, and some Democrats view the GOP’s request to put the bill through committees as stall tactics given the Democratic timetable. Minutes after returning from meeting, Pelosi reiterated her plans to pass a bill by July 4.
Ahead of the meeting, Senate Majority Leader Chuck Schumer said Washington “cannot be small-minded” and urged McConnell and McCarthy to think “about how to come together to solve the nation’s problems in a bold and lasting way.” He said afterward that the two parties had agreed to keep talking.
“We said that we would explore the places where we could agree on and come to a bipartisan agreement on those,” Schumer said.
The Republicans had other ideas, too, and brought up inflation and unemployment. McConnell also warned before the meeting that Biden was not elected to cater to the “far left” and that slim Democratic majorities “are not exactly a sweeping mandate for a socialist agenda.”
For Democrats, the meeting on Wednesday and another between Biden and Senate Republicans on Thursday are critical to informing tactics moving forward. They can decide to ditch the GOP and muscle through a massive jobs bill of their own through budget reconciliation, provided they can get all 50 Senate Democrats on board and House Democrats lose three or fewer votes. That’s how they passed March’s $1.9 trillion coronavirus relief bill.
But for now, Democrats don’t quite have the votes to do that. Some Senate Democrats as well as Biden himself want to probe whether Democrats can cut a bipartisan deal on infrastructure and then consider massive funding boosts for child care, housing and other priorities in a separate, partisan bill.
White House allies stress that Biden is sincere in his attempt to find common ground with Republicans and members of his Cabinet are frequently calling GOP senators to discuss the infrastructure plan.
White House press secretary Jen Psaki said the goal of the meeting was to “convey that the world is not waiting for us to work together” and to negotiate in a “good faith effort.”
The public is "not waiting for the resolution of a leadership fight,” said Psaki, taking a jab at the House Republican vote to oust former conference chair Liz Cheney (R-Wyo.) over her vocal opposition to former President Donald Trump’s baseless election fraud claims. “The stakes are too high not to work together.”
In a readout of the meeting, the White House said Biden "emphasized that whatever differences exist between the parties, the real competition is between the United States and the rest of the world" and that other countries won't wait for the U.S. to "equip our people to win in the 21st Century."
It’s easy enough to agree on spending money, but paying for it is another problem altogether. Sen. John Barrasso (R-Wyo.), the No. 3 GOP leader, has joined McConnell in stating the party’s “red line” is raising corporate taxes or touching the party’s 2017 tax bill. He’ll be among the Senate Republican committee leaders meeting with Biden on Thursday.
“You won’t find any Republican that wants to go out and raise taxes,” McCarthy said after speaking with Biden, adding that he brought up inflation concerns with Biden. “Raising taxes is the biggest mistake you can make.”
Biden and his officials have avoided publicly setting a timetable for the infrastructure package, but internally they see Memorial Day as a pivotal date in their talks with Republicans. In the House and among Senate progressives, there are low expectations for a GOP compromise. Those Democrats want quick action — particularly with their grip on the majority looking increasingly tenuous ahead of next November’s midterms.