Rep. Kevin Brady, who was the best Republican in the House of Representatives during the Trump administration, suggested Monday that President Joe Biden’s proposals to raise interest rates for businesses and the rich are not beginners.
“I’m not sure we should compromise by making America dramatically less competitive than our global competitors,” Brady said on CNBC’s Squawk Box.
The Texas Republican, who is retiring at the end of that term after more than two decades in Congress, predicted that “there will be a real battle over these tax hikes,” and advocated a “different approach to what we do for Bidens Pay for infrastructure “plan.
Biden unveiled the second part of his multi-billion dollar plan to overhaul the U.S. economy after the devastating coronavirus pandemic last week. The packages aim to make huge investments in infrastructure, childcare and a range of other projects, partly paid for by raising the highest income tax rate to 39.6% and increasing the corporate tax rate to 28%.
Biden’s proposals would reverse some key elements of the 2017 tax cut bill that Brady, then chair of the House Ways and Means Committee, helped shape. The $ 1.5 trillion legislation that cut taxes for businesses and individuals became a major achievement of former President Donald Trump’s tenure.
Brady said Republicans and Democrats in Congress could “absolutely compromise” on an infrastructure plan that “has always been a bipartisan issue.”
But “we shouldn’t be funding the infrastructure on the backs of American workers,” Brady said.
He suggested that lawmakers should instead seek to “reclaim” some of the wasted money in the budget and restore a number of tax rules that were previously used for infrastructure but subsumed by other issues to their original purpose.
Brady also suggested looking for private sources of capital to raise infrastructure funds.
“There are several ways we can go about this to drive infrastructure funding,” said Brady.
But Brady seemed to reject the prospect of taxing the rich, arguing that the tax code was already “extremely advanced”.
The Biden administration has urged Republicans to weigh up and come up with their own proposals, stressing that “inaction is not an option”. But many Republicans have accused the White House of using the rhetoric of unity while governing like partisans. Biden signed a $ 1.9 trillion Covid Relief Act in March with no GOP support.
Democrats have a narrow majority in both houses of the bitterly polarized Congress. The Senate is split between 50 and 50 between the two parties, giving Vice President Kamala Harris the casting vote.
The Senate filibuster, which requires a 60-vote threshold for most laws to pass, is preventing Democrats from pushing most of their agenda through Congress. However, the rules for the budget vote stipulate that some bills – like the Covid Aid Act in March – can only be passed by a simple majority, and Democrats have more options to use this option before the 2022 midterm elections.
Many Democratic lawmakers are pushing for the Senate to end the filibuster – a move that Senate minority leader Mitch McConnell, R-Ky. Warned, would result in “100 cars piling up” in the chamber. But also some moderate Democrats, like the Senator from West Virginia, Joe Manchin, and the Senator from Kyrsten Sinema from Arizona, have spoken out against a reform of the filibuster.
Manchin and other moderate Democrats, oversized influence in a divided Congress, also expressed concern over the trillion dollar spending proposed by the Biden administration.
McConnell accused the Democrats on Monday of destroying the limited bipartisanship that led Congress to quickly pass several Covid stimulus packages over the past year.
Democrats “just can’t resist spreading the pandemic and using it as a rationale for additional spending,” McConnell said in a note at the University of Louisville.
“They want the corporate rate to be the highest in the world,” added McConnell. “We will not check the 2017 tax bill again.”
When asked Monday about his prediction of how the battle on Capitol Hill will play out, Brady said, “This is by no means a closed deal.”
“These are dramatic tax hikes that are having a real impact on jobs here in America. I think this will sabotage job recovery, it will boost jobs overseas,” he said.
Just raising the corporate tax rate “will make America nearly dead in the last competition and will create jobs overseas. I’m not sure we should compromise by making America dramatically less competitive than our global competitors.”
“I think there will be a real battle over these tax hikes and I expect that at some point we will find a middle ground, both in terms of infrastructure and in terms of the way we pay for them.” “Said Brady.