White House insists corporate tax hike still on the table in spending bill

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The White House on Thursday pushed back against a report that a proposed corporate tax hike is unlikely to make into their signature social spending bill amid party infighting and insisted that all options are still on the table. 

Reuters reported Wednesday that President Biden's plan to hike the corporate tax rate to 28% from 21% was likely to be left out of the family and climate plan as lawmakers try to steer the package through Congress, a major concession to moderate Democrats. 

But White House deputy press secretary Andrew Bates told FOX Business that Biden still plans to fund the final package by "having the richest taxpayers and big corporations pay their fair share."

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"There is an expansive menu of options for how to finance the President's plan to ensure our economy delivers for hardworking families, and none of them are off the table," Bates said in an emailed statement.

Biden and Democratic leaders are racing to finalize a deal as soon as this week on a set of tax hikes they hope will pay for a spending package somewhere in the range of $1.7 trillion to $1.9 trillion over the next decade. 

The pared-down spending package is expected to include many of the original plan's proposals, including universal pre-K, substantial investment in green energy and expanded Medicare benefits; however, the details are still subject to change. The smaller package may eliminate, or weaken, several key programs favored by progressives, including free community college, less money for affordable public housing and a child tax credit extension of just one year, The Washington Post reported this week.

"The president knows that he's not going to get everything he wants in this package," White House press secretary Jen Psaki told reporters on Air Force One this week. "Nor will any member of Congress, probably, and that's what compromise is all about."

Democratic leaders have set an Oct. 31 deadline to reach an agreement on the spending plan and a separate $1.2 trillion bipartisan infrastructure deal. But Sen. Joe Manchin, a key moderate vote, told reporters that lawmakers are unlikely to strike a deal this week.

Sen. Kyrsten Sinema, D-Ariz., walks out of the Senate Chamber on Capitol Hill in Washington, Thursday, Sept. 30, 2021. (AP Photo/Patrick Semansky) (Associated Press)

"This is not going to happen anytime soon, guys," Manchin said. "THey're trying to get a meeting of minds to find out what can happen from there."

Because Democrats intend to pass the measure using a process known as reconciliation – allowing them to bypass a 60-vote filibuster by Senate Republicans – they will need to ensure that every member of their caucus votes in lockstep. That's proven difficult, with moderate and progressive lawmakers feuding for weeks over the size and scope of the package.

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President Biden originally floated a $3.5 trillion price tag for the social spending bill and called for a slew of tax hikes to pay for it, including raising the corporate tax rate to 28%, restoring the top individual income tax rate to 39.7%, taxing long-term capital gains as ordinary income and closing the so-called "step-up" in basis that allows wealthy heirs to significantly reduce, or eliminate, their tax bill. 

But Sen. Kyrsten Sinema, D-Ariz., has remained fervently opposed to raising taxes on corporations and the wealthy, putting the rate increases at risk.

FOX Business' Hillary Vaughn contributed to this report 

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