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Republicans Balk at Infrastructure Adding to Deficit After Opposing Pay-Fors

Republicans have rejected proposals to tax corporations and the rich and a proposal to enforce tax law on the rich.

Senate Minority Leader Mitch McConnell (R-Kentucky), joined by fellow Republican senators, speaks on a proposed Democratic tax plan during a press conference at the U.S. Capitol on August 4, 2021, in Washington, D.C.

As amendments to the bipartisan infrastructure bill were being debated in the Senate, the Congressional Budget Office (CBO) said Thursday that only about half of the $550 billion in new spending proposed by the bill will be paid for and the rest will add to the deficit.

The CBO announced that the bill would add about $256 billion to the deficit over the next ten years despite the fact that the bipartisan group working on the bill had promised the entire bill would be paid for.

Republicans have warned for weeks that they may not support the bill if it wasn’t fully funded. Senate Minority Leader Mitch McConnell (R-Kentucky) said in June that might not support a bill that added to the deficit. Sen. Mike Lee (R-Utah) told The Hill on Thursday that, despite the good provisions in the bill, he believes half of the “pay-fors” in the bill are “fake.”

Sen. Rob Portman (R-Ohio) has evidently been warning his colleagues for weeks that the bill would likely not be fully covered. Sen. Kyrsten Sinema (D-Arizona) and Portman circulated a statement saying that the CBO score may not be fully accurate and that the bill would still be fully funded, in an attempt to assuage concerns for now.

Still, Sen. Bill Hagerty (R-Tennessee) is hesitant after the CBO report, falling in step with McConnell’s announcement in June that GOP lawmakers wouldn’t vote for a bill that added to the deficit. A spokesperson for Hagerty told Politico that the senator “cannot in good conscience agree to expedite a process immediately after the CBO confirmed that the bill would add over a quarter of a trillion dollars to the deficit.”

Senators, mostly Republicans, introduced a flurry of amendments on Thursday evening but Hagerty’s opposition held up a vote to end debate. Senate Majority Leader Chuck Schumer (D-New York) has rescheduled the vote for Saturday. The bill must receive at least 60 votes to advance, thanks to the Senate filibuster.

Though Republican opposition to adding to the deficit — and thus potential opposition to the entire infrastructure bill — is unsurprising, it comes after months of negotiations in which the GOP has rejected a wide swath of Democratic proposals that could have prevented any deficit issues at all.

President Joe Biden had originally proposed a modest tax increase on corporations and wealthy people to pay for his $4 trillion package. Republicans categorically rejected this proposal, not wanting to undo Donald Trump’s 2017 tax cuts. Instead, they offered to pay for the bill with user fees, a proposal that Sen. Bernie Sanders (I-Vermont) pointed out was really a tax on the middle and lower classes.

Republicans also rejected a proposal to enforce existing tax law on the rich. This pay-for would fund the Internal Revenue Service (IRS) to go after rich tax dodgers — many who often donate handsomely to the Republican Party. The IRS funding proposal in the bipartisan bill would have raised an estimated $100 billion over 10 years.

The GOP, then, has created its own catch-22 on the infrastructure bill. They won’t agree to a bill that would add to the deficit, but they also won’t agree to any of the pay-fors that would cover additional spending. It’s unclear if Hagerty or other Republicans could be swayed to support the bill — but as Republicans have been delaying the bill for months, Democrats and progressives are growing more impatient.

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