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**MAY 3, 2021**

Kuttner on TAP

Strategic Compromise-or Sellout?

****

Washington is full of talk that the Biden administration and its Senate
allies are discussing paring back the $2.3 trillion infrastructure plan

in order to attract some Republican support. Sen. Chris Coons of
Delaware, a longtime ally of Biden, has been conferring with
Republicans, as has White House chief of staff Ron Klain and senior aide
Steve Ricchetti.

The president plans to confer personally this week with Sen. Shelley
Moore Capito
,
who is promoting a compromise on behalf of Republicans. Biden will bring
congressional leaders of both parties to the White House to discuss
options May 12.

What gives? Are Democrats once again bargaining against themselves?

Actually, no. This in fact is shrewd politics. For one thing, Democrats
are short of the needed 50 Senate votes in their own caucus. Joe Manchin
has made it clear that he won't support either the full $2.3 trillion,
or the taxes needed to pay for it.

For another thing, if Biden can get some Republican senators to support
part of the package now, it usefully splits the GOP Senate caucus and
weakens Mitch McConnell. Biden can always come back for the rest in the
FY 2022 budget reconciliation in September, as his own popularity and
public support for infrastructure spending both increase.

We need the same sort of compromise on the fraught issue of whether to
restore full deductibility of state and local taxes, abbreviated as
SALT. In 2017, Trump poured SALT in Democrats' wounds, as it were, by
limiting the total deduction against federal income taxes to $10,000.

While the Trump tax legislation cut taxes for most affluent taxpayers,
this limitation was a well-targeted "F-You" to voters in blue states
like New York, California, Connecticut, New Jersey, and Massachusetts,
where housing costs and property taxes are sky-high even for the upper
middle class.

Many House and Senate members from these states want the full SALT
deduction restored. Biden has properly balked because this is mostly a
tax cut for rich people. There's an easy fix-raise it to something
like $25,000. That would help the professional class, which got whacked,
but leave mansion owners paying higher taxes, and keep key blue-state
Democrats on board.

Unless you have a much larger majority than Biden does, politics is the
art of the possible, and not all compromises are sellouts.

~ ROBERT KUTTNER

Follow Robert Kuttner on Twitter

Robert Kuttner's latest book is
The Stakes: 2020 and the Survival of American Democracy
.

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