By Andrew Taylor
Washington — A stimulus-style spending and tax surcharge on the very wealthy could torpedo an infrastructure package that calls for almost $60 million in roads and bridges.
President Barack Obama’s allies in the Senate on Friday unveiled the legislation, which was part of a $447 billion jobs measure that was defeated earlier in the Senate.
Like its two predecessors, the infrastructure package figures to be unanimously opposed by Republicans and a handful of Democrats. A test vote on the measure will come after the Senate returns from vacation next month.
“The bill will provide an immediate investment in America’s roads, bridges and airports, and establish a national infrastructure bank to leverage private and public capital to fund a broad range of projects,” said a spokesman for Majority Leader Harry Reid, D-Nev. Spokesman Adam Jentleson said the measure would tally as much as $50 billion in immediate spending on infrastructure with the creation of a $10 billion infrastructure bank. The measure would be financed by a 0.7 percentage point surcharge on income more than $1 million.
The announcement by Senate Democrats came the day after Republicans scuttled a pared-back jobs measure designed to boost hiring of teachers and first responders.
That plan failed on a 50-50 test vote that fell well short of the 60 needed to break a filibuster. Two Democrats abandoned Obama on the vote and two more who voted with the president said they couldn’t support the underlying Obama plan unless it’s changed.
Thursday’s $35 billion measure combined $30 billion for state and local governments to hire teachers and other school workers with $5 billion to help pay the salaries of police officers, firefighters and other first responders. The White House says the measure would “support” almost 400,000 education jobs for one year. Republicans call that a temporary “sugar high” for the economy and say it’s a taxpayer-funded bailout of state and local governments.
Obama and his Democratic allies are acting like they’ve found a winning issue in repeatedly pressing popular ideas such as infrastructure spending and boosting hiring of police officers and firefighters.
The sluggish economy and lower tax revenues have caused many teachers’ jobs to be cut during the past several years.
“For the second time in two weeks, every single Republican in the United States Senate has chosen to obstruct a bill that would create jobs and get our economy going again,” Obama said in a statement after the vote. “Every American deserves an explanation as to why Republicans refuse to step up to the plate and do what’s necessary to create jobs and grow the economy right now.”
“We cannot afford to be bailing out local governments, and we can’t afford stimulus 2.0,” countered Sen. Marco Rubio, R-Fla.
Democrats haven’t said which piece they’ll resurrect next as an individual bill, but there’s widespread support among party members for spending on highway and bridge projects, as well as for a poll-tested financing mechanism ó a surcharge on income exceeding $1 million.
An AP-GfK poll taken Oct. 13-17 found 62 percent of respondents favoring the surcharge as a way to pay for jobs initiatives. Just 26 percent opposed the idea.
More ominously for Democrats, the poll shows that Obama’s party has lost the faith of the public on handling the economy. In it, only 38 percent said they trusted Democrats to do a better job than Republicans in handling the economy, the first time Democrats had fallen below 40 percent in the poll. About 43 percent trust Republicans more.
“The fact is we’re not going to get this economy going again by growing the government. It’s the private sector that’s ultimately going to drive this recovery,” said Senate Minority Leader Mitch McConnell, R-Ky. “Look, if big government were the key to economic growth, then countries like Greece would be booming right now.”
Democrats Ben Nelson of Nebraska, Mark Pryor of Arkansas and Democratic-leaning Independent Joe Lieberman of Connecticut broke with Obama on Thursday’s vote. Two Democrats who voted with the president, Sen. Joe Manchin of West Virginia and Jon Tester of Montana, said they couldn’t support the underlying Obama plan unless it’s changed.
“This bill fails to give taxpayers any guarantee that this money would actually be used to hire teachers and invest in our schools,” Tester said. “States would get loads of money with little guidance that they spend the money on teachers.”
Immediately after the vote on Obama’s plan, Democrats turned the tables and filibustered Republican-backed legislation that would prevent the government from withholding 3 percent of payments to government contractors. The legislation failed to get the 60 votes needed to end the filibuster on a 57-43 vote, even though 10 Democrats voted to advance it.
Many Democrats and Obama support the idea but opposed it Thursday because it would be paid for with $30 billion in cuts from domestic agency spending. Advocates of repealing the withholding requirement say it will help create jobs, especially from contractors on large projects with smaller profit margins.
The withholding law was passed in 2006 by a GOP-controlled Congress. Then, the idea was to make sure contractors couldn’t duck their taxes and was imposed after government investigators found that thousands of federal contractors owed taxes.
The GOP-controlled House likely will pass the measure next week and Reid promised that the Senate would revisit the issue, although there’s likely to be a split between the House and Senate over how to pay for the cost of repealing the withholding rule.