Brief # 118 – Economic Policy

It’s Frustrating to Negotiate with Republicans

By Rosalind Gottfried


June 4, 2021

Policy Summary

In March Biden proposed a 2.3 trillion dollar infrastructure plan which he has trimmed to 1.7 trillion.  The Republicans initially proffered a plan of 568 billion and have raised it to 928 billion, after sustained discussion with Republican Negotiator Senator Shelley Moore Capito of West Virginia.  Biden, after much negotiation with Republican leaders has rejected that offer saying that it fails to address significant needs in the transportation, climate control, and job creation. 

Biden also wants to establish a 15% minimum corporate tax, with no exceptions, to end major corporations escaping the tax burden altogether with deductions and write offs.  The Republicans flatly refuse to amend the Trump tax reform of 2017 which had no minimum and established a 21% ceiling, less than the 28% Biden has proffered.  Another sticking point is that the Republicans want to fund the bill with unspent pandemic relief money, a proposal Biden has unequivocally rejected.

On the same day that Biden announced the lack of agreement on an infrastructure package, the May jobs report unveiled the addition of 559,000 new jobs.  Though this figure is greater than the tepid 278,000 added in April, Biden says it points to the need for more aggressive action.  Unemployment dropped to 5.8% from the previous month’s 6.1% and remains significantly higher than pre-pandemic rates.


Although the Biden administration has reduced its initial infratsructure process, Biden has been frustrated with the negotiation process; the Republicans have raised their funding level but they started very low, at about a quarter of Biden’s original plan.  Biden will continue negotiations in the hope of getting somewhere when Congress returns from their Memorial Day break but commentators are not optimistic.  The more progressive elements among the Democrats are agitating for passing a plan with a simple majority and foregoing any bi-partisan agreement.  Republican hostility to infrastructure spending promoted by Biden is ironic in that President Trump proposed a two trillion dollar plan (that also went nowhere) a year before Biden announced his plan.

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