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'Bipartisan' infrastructure talks are a smoke screen

·Senior Columnist
·5 min read
WASHINGTON, DC - JUNE 09: Sen. Lisa Murkowski (R-AK) (L) and Sen. Bill Cassidy (R-LA) (2nd R) leave the office of Senate Minority Leader Mitch McConnell (R-KY) following a meeting on Capitol Hill on June 09, 2021 in Washington, DC. Since the talks on infrastructure legislation with the White House fell through, a bipartisan group of senators have organized to try drafting a proposal themselves. (Photo by Anna Moneymaker/Getty Images)
Sen. Lisa Murkowski (R-AK) (L) and Sen. Bill Cassidy (R-LA) (2nd R) leave the office of Senate Minority Leader Mitch McConnell (R-KY) following a meeting on Capitol Hill on June 09, 2021 in Washington, DC. Since the talks on infrastructure legislation with the White House fell through, a bipartisan group of senators have organized to try drafting a proposal themselves. (Photo by Anna Moneymaker/Getty Images)

During the Trump presidency, “infrastructure week” became a running joke because there was never a coherent plan to match the periodic messaging campaigns.

The Joe Biden equivalent is bipartisanship week.

Republicans and Democrats in the Senate are continuing negotiations this week on a big spending package for roads, green energy and other supposed Biden priorities. Ten senators—five from each party—reportedly agreed on a $1.2 trillion plan and will now attempt to sell it to their colleagues, so that it can gain the 60 votes required to overcome a filibuster.

But this effort is as doomed as the last bipartisan infrastructure push. What, you don’t remember the last bipartisan infrastructure push? That was when talks between the White House and Republican Sen. Shelley Moore Capito of West Virginia broke down in early June, with both sides accusing the other of intransigence. That’s the natural outcome when two parties fundamentally disagree, and it’s why the ongoing effort at a bipartisan deal is a smoke screen.

The Bipartisan 10 haven’t published their plan—assuming there really is one—but it reportedly includes poison pills that guarantee Democrats won’t go for it and President Biden would probably veto it if it arrived on his desk. One poison pill is a measure that would index the federal gas tax to inflation. This is a sensible idea Congress should have passed long ago. The gas tax has been stuck at 18.4 cents per gallon since 1993, with inflation eroding its ability to raise needed funding for highways.

The problem is that Biden, while campaigning for president, pledged there would be no tax hikes on any American earning less than $400,000 during his presidency. Indexing the gas tax to inflation would be a de facto tax hike, which Republicans would use to pillory Biden for violating a key campaign promise. Everybody in Washington knows this, which suggests any “bipartisan” plan that includes this kind of tax hike is a sham.

FILE - In this May 13, 2021, file photo, Sen. Shelley Moore Capito, R-W.Va., right, listens as President Joe Biden speaks during a meeting with Republican Senators in the Oval Office of the White House in Washington. The two senators from West Virginia are playing central roles in Biden's infrastructure plans. Democrat Joe Manchin is a crucial 50th vote for his party on Biden's proposals. (AP Photo/Evan Vucci)
In this May 13, 2021, file photo, Sen. Shelley Moore Capito, R-W.Va., right, listens as President Joe Biden speaks during a meeting with Republican Senators in the Oval Office of the White House in Washington. The two senators from West Virginia are playing central roles in Biden's infrastructure plans. (AP Photo/Evan Vucci)

The bipartisan plan also includes a mileage fee on electric vehicles, so owners of cars that don’t use gasoline pay something equivalent to a gas tax. That’s another good idea, but it’s as dead as a hike in the gas tax, for the same reason: Biden would violate a campaign pledge, since some EV owners earn less than $400,000. Those two measures could come out of a final bill, but then there would be no financing mechanism to bring in new revenue needed to pay for all the new spending, which is something both parties insist on, in principle.

Tax hikes going nowhere

Biden, of course, wants to raise the corporate tax rate from 21% to 28% to raise some revenue, and he has proposed other taxes on business and the wealthy to cover the cost of much of his agenda. Those tax hikes will go nowhere with Republicans, who consider it a sacred duty to defend the 2017 tax cuts they passed with zero Democratic support. This leaves Republicans backing tax hikes anathema to Biden, and vice versa. Bipartisan talks can go on forever, but they will never become a bipartisan law.

The open secret is that Democrats, with slim majorities in both houses of Congress, will almost certainly invoke the arcane “reconciliation” process in the Senate to pass their own bill on a simple majority basis. “We remain bearish on these bipartisan talks given persistent divides over both scale and scope,” analyst Isaac Boltansky of Compass Point Research and Trading wrote in a June 13 research note. “Our base case remains that Democrats will move alone via budget reconciliation.”

Some Democrats think the bipartisan detour is a blatant stalling ploy by Republicans hoping to drag out the process long enough to endanger the final passage of any infrastructure bill, depriving Biden of a political victory. But Biden is playing his own game. As a candidate, he ran as a pragmatic moderate able to do business with Republicans. That may have helped him win the votes of some Independents and centrist Republicans sick of partisan warfare. By playing the conciliator now, Biden is playing to the middle, even if he knows the whole thing is an act.

President Joe Biden speaks after a tour of the Ford Rouge EV Center, Tuesday, May 18, 2021, in Dearborn, Mich. (AP Photo/Evan Vucci)
President Joe Biden speaks after a tour of the Ford Rouge EV Center, Tuesday, May 18, 2021, in Dearborn, Mich. (AP Photo/Evan Vucci)

The scripted bipartisan show will end eventually, and Democrats who control the Senate are likely to begin the reconciliation process that would enable the passage of their own partisan bill by the end of July. Assuming Democrats can muster the votes for a partisan bill, it would likely pass by the end of September, when the government’s fiscal year ends.

Biden probably won’t get a 28% corporate tax rate, because a few Democrats think that is too high. But Dems could raise it to 25%, while also hiking the top income tax rate, the capital-gains rate for high earners and a few other taxes affecting only the wealthy. At that point, Biden will be able to say he tried to get a bipartisan deal and Republicans simply wouldn’t go along with it. Some voters might even buy it.

Rick Newman is the author of four books, including "Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. You can also send confidential tips, and click here to get Rick’s stories by email.

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