WASHINGTON (AP) — Republicans see inflation, taxes and immigration as democratic vulnerabilities worth attacking, with two opposition senators as prime targets in the coming battle for a economic package the Democrats want to push through the Senate.
The measure embodies some of the top environment, energy, health and tax policy aspirations that President Joe Biden and party leaders want to execute as voters gear up for this fall’s congressional elections. The GOP would like to derail or weaken the measure, or at the very least force Democrats to take votes that would be painful to defend in reelection campaigns.
Republicans are already setting fire to sen. Joe Manchin, DW.Va., who made the measure with Senate Leader Chuck Schumer, DN.Y., and unexpectedly pumped life into an effort that most Democrats viewed as dying. Manchin is a conservative Democrat from a scarlet state who has previously rejected his party’s priorities, and Republicans have devastated him in recent days, an unsubtle signal that they will get him if he is re-elected in 2024.
“He made a terrible deal,” Senate Leader Mitch McConnell, R-Ky., told reporters this week. “How he can defend this from a West Virginia point of view, or see it as some centrist sort of deal, is This is an agreement only Bernie Sanders would love.”
Even Senator Shelley Moore Capito, RW.Va., who has a strong relationship with Manchin and rarely clashes with him in public, denounced the legislation for imposing a minimum tax on large, profitable companies that she said would make investments. to obstruct. “Like many West Virginia residents, I fear this tax hike will slow the closing of the digital divide in rural communities,” she said.
Republicans take a softer approach with sen. Kyrsten Sinema, D-Ariz., who was hesitant about the legislation and has expressed concerns about tax increases. She’s her party’s biggest question mark on this bill in the 50-50 chamber, where all Republicans certainly seem to vote “no,” and she’s had several discussions with GOP senators during the ballot this week.
Sinema has opposed previous proposals to tax managers of high net worth stock firms, which this time would bring in about $14 billion of the $739 billion in revenues from this legislation. She met Arizona manufacturers who oppose raising the minimum corporate tax rate, then thanked her in a tweet for her “thoughtful approach and willingness to listen to AZ workers.”
“I don’t know what she’s thinking,” said Idaho Sen. Mike Crapo, top Republican on the Senate Finance Committee, told reporters. “‘We make our business’ is the best we can say.”
The 10-year measure includes hundreds of billions in spending and tax breaks to encourage alternative energy production and boost fossil fuels with steps such as tax breaks for technology that reduces carbon emissions. There is also money to help people buy private health insurance and facilities that give Medicare the power to negotiate the prices of some drugs with pharmaceutical manufacturers.
The bill “will cut costs, fight inflation and achieve historic victories in the fight against climate change,” Schumer said.
The GOP certainly seems to be trying to strip or tone down the corporate minimum and language-boosting taxes on wealthy equity firm managers, hoping to win Sinema as the deciding vote for it. After opposing Democrats’ proposed tax increases for corporations and high earners last year, they switched to a corporate tax minimum that they supported, but it’s uncertain if she will now.
Republicans could table amendments targeting certain Democratic senators — such as one exempting coal producers from certain taxes in a play for Manchin.
To back up its argument, the GOP released an analysis of the impartial Joint Taxation Committee that Republicans said showed tax increases for people earning less than $400,000. That would contradict Biden’s promise not to raise taxes on that income group.
“Ordinary Americans would bear a significant portion of the burden of this tax increase,” said Senate No. 2 GOP leader John Thune of South Dakota.
Democrats rejected that attack, noting that the study omitted the effect of the bill’s health and energy tax benefits on individuals. It also counted lower salaries, stock prices and dividends that she says will act as part of the effect the bill would have on people.
Overall, the Congressional Budget Office said Wednesday that the measure could reduce federal deficits by about $305 billion. But $204 billion of that would come from improving the IRS’s tax collection, which really will be if it happens, but the impartial agency isn’t counting in its formal assessment of the bill’s impact.
In a bow to dominant voters worry about gasoline prices and general consumer costs, Democrats call the bill the Inflation Reduction Act. Still, its impact on the nation’s worst period of inflation in four decades appears likely to be limited.
The University of Pennsylvania’s Penn Wharton Budget Model estimated that the measure would “increase inflation very slightly through 2024 and then decrease inflation,” although the changes would be “statistically indistinguishable from zero.” McConnell said research showed the Democrats’ bill would “increase inflation in the short term and do nothing for inflation in the long run.”
Democrats cited a Moody’s Analytics report saying the bill would “push the economy and inflation in the right direction.” say the measure would strengthen the economy, “cut costs for families and fight inflation”.
That battlefield suggests there are likely to be Republican amendments on pricing. One might imagine a proposal that will not allow the law to go into effect unless inflation or gasoline prices fall to certain levels. Democratic leaders this week are trying to unite ordinary senators against such plans.
The GOP could also try to renew immigration restrictions imposed by President Donald Trump, who cited the pandemic as a reason to exclude migrants, an issue that deeply divides Democrats. And they could try to cut tax credits aimed at encouraging alternative energy and favoring companies that pay union wages.
AP reporter Seung Min Kim contributed to this report.