The White House dismissed the tax cut proposal offered by House Republicans as disproportionately benefiting corporations and the wealthy and likely to add billions to the deficit.
President Joe Biden’s top economic adviser, Lael Brainard, wrote to allies on Capitol Hill Monday about the plan, signaling the White House is unwilling to entertain the GOP proposal, which would cut income and corporate taxes while rescinding incentives for green energy projects, including credits for the purchase of electric cars.
“Repealing these provisions would result in less investment in the United States, ship clean energy jobs overseas, raise energy costs for consumers, and severely weaken our ability to reduce greenhouse gas emissions and combat the climate crisis,” Brainard wrote.
Brainard’s memo is also critical of House Republicans for seeking to retroactively restore tax breaks that already sunset under former President Donald Trump’s signature tax reform law.
The memo said the GOP plan would effectively offer a windfall payment to corporations that have already paid taxes while Republicans are looking to set up the full package of Trump tax cuts for renewal in 2025. Renewing the full package of Trump tax cuts for another decade would add over $2.5 trillion to the deficit, the White House said.
“This bill makes House Republicans’ values clear: Their priority isn’t reducing the deficit, it’s giving handouts to rich special interests and corporations that make the debt even larger,” White House Press Secretary Karine Jean-Pierre said at a press briefing Monday.
“Just weeks ago, House Republicans were demanding devastating cuts to programs hardworking Americans count on, from health care to public safety to Meals on Wheels in the name of fiscal responsibility,” she added. “Now they are proposing to spend hundreds of billions on tax breaks for big corporations, and they’re laying the groundwork to spend trillions on additional tax cuts skewed to the wealthy and big corporations.”
That Democrats are highly critical of a GOP tax proposal isn’t surprising, but the White House memo does lay out areas where Biden would support tax cuts — providing a framework for a possible smaller-scale deal later this year.
Brainard notes Republicans are currently refusing to restore the expired expanded child tax credit, or increase eligibility for the Earned Income Tax Credit, two programs the White House sees as helping to address poverty.
Lawmakers failed last year to strike an agreement that would trade business tax breaks sought by Republicans for tax benefits for the poor desired by Democrats, but are hopeful about reigniting talks in the coming months. Businesses have lobbied hard to restore more generous write-offs for research and development expenses as well as capital and interest expense deductions.