The battle begins in the US Congress over taxes and infrastructure spending | Business and economic news

The US Congress is set to embark on a controversial battle over President Joe Biden’s infrastructure investment plan as Democrats and Republicans fight over the $ 2 trillion cost and how the money should be distributed over the next few years.

Democrats, who effectively control the Senate and a small majority in the House of Representatives, aim to present a final bill that the Democratic president will sign between July 4 and early September.

They say they want the Republicans on board, but have also warned that they will act unilaterally if they cannot move forward quickly.

Biden’s proposal, which he plans to unveil Wednesday in Pittsburgh, calls for $ 2 trillion in new spending on everything from roads and bridges to broadband and senior care, as well as higher corporate taxes.

In 2017, investments in infrastructure were seen as a likely achievement of the administration of then-President Donald Trump. But the legislation never saw the light of day in Congress, in part because of partisan disagreements over funding mechanisms.

Last month, Congress passed Biden’s $ 1.9 trillion coronavirus aid package without Republican support.

This time around, a dizzying array of congressional committees, ranging from House and Senate tax drafting committees to those overseeing health, environment and transportation policy, should struggle to find consensus.

Negotiations between Democrats and Republicans could be stalled at any time on issues such as funding for the initiative and whether the massive spending will produce economic benefits or overheat the economy.

Many Republicans are wary of Biden’s infrastructure plan, especially if it is funded by tax hikes, and some moderate House Democrats have said they would only support him if there is a cancellation higher national and local taxes.

Republican Senate Leader Mitch McConnell called the plan a “Trojan Horse” for the tax hikes Democrats want to impose.

“It’s called infrastructure, but inside the Trojan there will be more borrowed money and massive tax increases on all productive parts of our economy,” Senator McConnell told reporters on Wednesday. at a press conference in his home state of Kentucky.

Senate Minority Leader Mitch McConnell warns Republicans will oppose tax hikes Democrats prepare to include in infrastructure bill [Kevin Lamarque/Reuters]

A range of thorny questions, including whether to use legislation to reduce the cost of prescription drugs, could cause delays along the way. Things like green power and investing in broadband could garner bipartisan support.

On March 29, the White House announced its intention to develop offshore wind energy in the next decade by opening up new areas for development, accelerating the issuance of environmental permits and increasing public funding for projects.

Some moderate Democrats, who are likely to face tough challenges from Republicans in the 2022 parliamentary election, might balk at the price, while Progressive Democrats have already made it known they want to double or even triple the price. money that Biden is sketching.

With the White House hoping Congress can draft and pass the gargantuan bill within the next 12 weeks or so, an early September deadline might be more realistic, some current and former lawmakers say. That’s when a federal highway authorization bill expires.

Dragging this debate beyond September could doom the measure as partisanship escalates ahead of the 2022 midterm elections.

Senate Democratic Leader Chuck Schumer discovered during the drive to adopt recent COVID-19 aid bill that he had to engage in a lot of horse-trading in a Senate divided equally between the two parties, even though he employed a special procedure allowing the measure to advance without the normal threshold of 60 support votes.

Some Democrats have already predicted negotiations with the Republicans would fail, forcing Schumer to again use fast-track budget procedures in order to avoid defeat.

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