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Administration officials on Sunday defended splashing cash on President Biden’s sweeping infrastructure package despite a strong economic outlet — while Republicans slammed the plan as “reckless.”
Cecilia Rouse, chair of the president’s Council of Economic Advisors, was asked by Fox News’ Chris Wallace why Congress needed to pass an infrastructure spending plan that would cost a combined $6 trillion even as first quarter growth hit 6.4 percent and the jobless rate fell from 14.7 percent to 6 percent.
“Those numbers reflect that we are just turning to come out of the recession. The numbers look eye-popping because of what we call base effect because they were so very low last year but we’re not done yet. Next week, we will also get an employment report,” Rouse said on “Fox News Sunday.”
“I expect to see robust job gains but I also expect we’re going to remind ourselves that we’re still 7 million or 8 million jobs down from where we were this time last year,” she continued, adding: “This is an economy that’s recovering. We are leading the world and that recovery but we’re not done yet.”
She said the strategy behind the infrastructure plan is to “create a partnership” between the public and private sectors to make investments “so that we can really increase growth.”
But Wallace pointed out that one of the ways Biden has proposed paying for the tab is to increase the corporate tax rate to 32.3 percent from 25.8 percent, and questioned Rouse on whether that would cool competitiveness.
“What we’ve seen over the past several decades is that the wealthiest Americans, the big corporations, are getting wealthier and they are contributing less in terms of federal revenue,” Rouse said.
“The first point is to ensure that everybody pays their fair share, not to increase taxes on the middle class, so not to increase taxes on anybody making less than $400,000 a year,” she said.
Treasury Secretary Janet Yellen said the president believes “permanent increases should be paid for.”
“I believe that we should pay for these historic investments. There will be a big return. I expect productivity to rise. There will be great returns from investing in research and development and enabling of families to participate with paid leave and childcare support in the workforce,” Yellen said on NBC News’ “Meet the Press,” adding that a stronger economy will generate tax revenues.
“I think the safest thing is to pay for them, and we’re doing it in a way that’s fair. I should also mention that an important way of paying for this is increasing tax compliance. It’s estimated that underpayment of taxes that are really due is costing us, the federal government, about $7 trillion over a decade,” she said.
But Republican Sen. Susan Collins said she wouldn’t support hiking the corporate tax rate because it would kill job growth.
“Let me tell you what I won’t support. I won’t support American businesses paying the highest corporate tax rate among developed countries in the world once again, and, unfortunately, that’s what 28 percent would be,” Collins said on CNN’s “State of the Union.”
“And that means that jobs would once again go overseas. So I think we need to look at a wide variety of pay-fors, but first we need to determine the scope of the bill, and we need to determine what the top line is going to be,” she said.
GOP Sen. John Barrasso also slammed Biden’s spending proposals in the infrastructure plan as “reckless.”
“It’s the trillions and trillions of dollars of reckless spending,” Barrasso (R-Wyo.) said on ABC News’ “This Week,” when asked what the sticking point would be in negotiations between Congress and the White House.
“When I look at this, this is a staggering amount of spending, like someone with a new credit card, and these are for things that we don’t necessarily need, we certainly can’t afford, but they’re going to delight the liberal left of the party,” he said.
“It seems to me that this is a cradle-to-grave role of government, whether it’s paying for child care for everyone, free college for everyone, and ultimately someone’s going to have to pay for this. It’s almost creating an addiction to spending,” Barrasso said.
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