Tag Archives: tax hikes

Republicans tell Biden tax hikes are a non-starter in recovery plan

By Jeff Mason and Jarrett Renshaw

WASHINGTON (Reuters) -Republican leaders told President Joe Biden on Wednesday they oppose any tax hikes to fund an economic recovery from the coronavirus pandemic, in a blow to the Democrat’s plans to spend trillions of dollars on U.S. infrastructure, education and childcare.

In their first White House meeting since Biden took office in January, Senate Republican leader Mitch McConnell and House of Representatives Republican leader Kevin McCarthy signaled a willingness to work with the president on infrastructure but drew the line at tax increases.

That is a setback to the White House’s efforts to have Congress approve a $2.25 trillion infrastructure bill and a $1.8 trillion education and childcare plan.

“You won’t find any Republicans who are gonna go raise taxes. I think that’s the worst thing you can do in this economy,” McCarthy said after the talks in the Oval Office. He cited rising gas prices as a reason not to back tax increases.

McConnell said Republicans were “not interested” in reopening a 2017 reform that cut taxes under former President Donald Trump.

“We both made that clear to the president. That’s our red line,” McConnell said.

Biden’s pandemic recovery plans have met with sharp resistance from Republicans in Congress, with disagreements over the price tag, scope and funding proposals. Those plans, and Biden’s intention to tax wealthy Americans and companies to cover the cost, are popular with voters from both parties.

Recent history does not augur well for a deal. No Republican voted for Biden’s $1.9 trillion COVID-19 relief plan that passed in March. House Majority Leader Steny Hoyer, a Democrat, said Tuesday that the Biden administration was “not going to wait a long time if we don’t see that agreement is possible.”

Asked in the Oval Office on Wednesday how he expected to come to a compromise, Biden quipped that he would just “snap my fingers.”

White House spokeswoman Jen Psaki said Biden did not seek to raise taxes on working Americans.

“His bottom line is that inaction is unacceptable, and that he is not going to raise taxes on the American people who are making less than $400,000 a year, but he’s open to a range of proposals,” she told a briefing.

Biden has said he wants to raise the U.S. corporate tax rate to between 25% and 28%, from 21%, to pay for badly needed infrastructure.

House Speaker Nancy Pelosi, a Democrat, said she felt more optimistic about prospects for a bipartisan infrastructure bill after the meeting, which she attended.

“We have a different set of values. But what we did agree in the meeting is: Let’s agree on what we’re trying to achieve. And then we can talk about how we pay for it. Let’s not lead with a disagreement. We’ll find a way because the public knows that this is necessary,” Pelosi told reporters.

CHENEY EXPULSION

McCarthy came to the White House talks shortly after leading his House Republican colleagues in expelling a member of their leadership, Liz Cheney, for rejecting Trump’s claims that Biden stole last year’s election from him through election fraud.

McCarthy, who has sought to placate Trump, cast her dismissal as necessary to unify Republicans and reclaim control of the House in 2022.

Psaki said the Republicans’ support for Trump’s false claims would not get in the way of Biden attempting to work with them.

“The president is no stranger to working with people who he disagrees with… or who he has massive fundamental disagreement with,” she said.

Congressional Democrats are giving Biden plenty of room to try to broker a deal, but they are preparing for the possibility of moving a massive spending bill along strictly party lines if Republicans do not join in negotiations, according to congressional and White House sources.

However, the Democrats in Congress may still struggle to retain the necessary support of enough of their own members to pass Biden’s spending proposals through both chambers, where they have slim majorities. They are betting the sheer volume of the spending measures will include enough attractive items to overcome any internal opposition, the sources told Reuters.

(Reporting by Jeff Mason and Jarrett Renshaw;Writing by Alistair BellEditing by Heather Timmons, Howard Goller and Rosalba O’Brien)

‘Momentum is on our side,’ Oklahoma teachers union leader declares

As their walk-out for higher wages and increased education spending enters its second week, teachers rally outside the Oklahoma Capitol in Oklahoma City, Oklahoma, U.S. April 9, 2018. REUTERS/Heide Brandes

By Heidi Brandes

OKLAHOMA CITY (Reuters) – Oklahoma teachers carried their walkout over school funding and higher pay into a ninth day on Tuesday as a union leader declared that educators had the advantage of momentum in a battle with the Republican-dominated state legislature.

State lawmakers have approved nearly $450 million in new taxes and other revenues to help fund teachers’ raise pay and boost other education spending since the walkout began on April 2, but the union is pushing for more action to raise overall spending by $600 million each year.

“Momentum is our on side,” president Alicia Priest said in a video posted late Monday night on the Oklahoma Education Association’s Facebook page.

The walkout closed public schools serving about 500,000 of the state’s 700,000 students on Monday, and schools in the state’s largest cities, Oklahoma City and Tulsa, were shut again on Tuesday.

The Oklahoma strike comes amid a wave of action by teachers in states where budgets have been slashed, as measured by per-student spending, over the past decade.

The nonpartisan Center on Budget and Policy Priorities said Oklahoma’s inflation-adjusted per student funding fell by 28.2 percent between 2008 and 2018, the biggest reduction of any state.

A West Virginia strike last month ended with a pay raise for teachers. Educators in other states, increasingly angry over stagnating wages, are also considering walk-outs.

Opponents of the Oklahoma tax hikes say lawmakers could bolster education spending by cutting bureaucracy and waste rather than raising taxes.

Republican lawmakers said they have made major moves to boost education spending and it may be difficult to find more money.

“This year’s education budget, which spends $2.9 billion (a 22 percent increase), has been signed into law. I don’t anticipate that bill being changed this year,” Republican Senate Majority Floor Leader Greg Treat said on Facebook ahead of this week’s legislative session.

Thousands of teachers packed into the state Capitol on Tuesday to urge lawmakers to remove a tax exemption on capital gains that would bring in another $100 million in revenue. They also asked Governor Mary Fallin to veto the repeal of a hotel tax that is valued at an estimated $50 million.

The new taxes and revenue approved by lawmakers translate into an average teacher pay raise of about $6,100.

Teachers want a $10,000 raise over three years. The minimum salary for a first-year teacher is currently $31,600, state data shows.

Graphic – Education funding 2008 thru 2015, click https://tmsnrt.rs/2Iumbck

Graphic – U.S. Teacher Salaries in 2017, click https://tmsnrt.rs/2IsvlGa

(Writing and additional reporting Peter Szekely in New York; Editing by Scott Malone and Jeffrey Benkoe)

Oklahoma teachers press Senate to pass tax plan to end strike

Teachers rally outside the state Capitol on the second day of a teacher walkout to demand higher pay and more funding for education in Oklahoma City, Oklahoma, U.S., April 3, 2018. REUTERS/Nick Oxford

By Heidi Brandes

OKLAHOMA CITY (Reuters) – Oklahoma teachers packed the state Capitol on Monday to press the Republican-dominated Senate to enact a capital gains tax overhaul educators said could bring in about $100 million and help end a statewide walkout now in its second week.

Tens of thousands of teachers have come to the Capitol each working day since the strike started April 2 calling for increased spending for an education system where inflation-adjusted general funding per student dropped by 28.2 percent between 2008 and 2018, the biggest reduction of any state, according to the nonpartisan Center on Budget and Policy Priorities.

Public schools serving more than half of the state’s 700,000 students were closed on Monday, including those around Tulsa and Oklahoma City. Oklahoma teachers are some of the lowest paid in the country.

“We need lawmakers to make a long-term investment in our children’s future,” the Oklahoma Education Association, the state’s largest teachers union with about 40,000 members, said on Monday.

In the past few weeks, lawmakers approved nearly $450 million in new taxes and revenue to help fund teachers’ pay and education, but that is still short of the $600 million being sought by teachers.

The Senate is set to meet this afternoon and discuss a bill that would remove a tax exemption on capital gains. If the bill is enacted, the union has said it would be a major step toward ending the strike.

They also want lawmakers to implement a hotel tax that would bring in an estimated $50 million.

The strike has garnered strong public backing, with a statewide survey from the Sooner Poll agency released last Friday showing that 72.1 percent of respondents supported the walkout.

The job action comes after a West Virginia strike last month ended with a pay raise and as teachers in other states, increasingly angry over stagnating wages, consider walkouts of their own.

Opponents of the tax hikes, including Oklahoma Taxpayers United, argue that lawmakers could boost education spending by cutting bureaucracy and waste rather than raising taxes.

The new tax and revenue that has been approved by lawmakers translates into an average teacher pay raise of about $6,100.

Teachers are seeking a $10,000 raise over three years. The minimum salary for a first-year teacher is currently $31,600, state data shows.

A major cause of budget strain comes from tax breaks Oklahoma granted to its energy industry, which were worth $470 million in fiscal-year 2015 alone.

(Writing and additional reporting by Jon Herskovitz in Austin and Peter Szekely in New York; Editing by Scott Malone and Tom Brown)

Fed on track to raise U.S. rates twice more this year

A police officer keeps watch in front of the U.S. Federal Reserve building in Washington, DC,

NEW YORK (Reuters) – The Federal Reserve is on track to raise interest rates twice more this year after a policy tightening last week, and it could be more or less aggressive depending on inflation and fiscal policies from the Trump administration, a Fed rate-setter said on Monday.

The public comments from Chicago Fed President Charles Evans were among the first since the U.S. central bank lifted its policy rate a notch last week, as expected. It also forecast roughly two more moves in 2017 in a nod to low unemployment and some inflation pressures.

“Three is entirely possible,” Evans, speaking on Fox Business Network TV, said of hikes in 2017. “As I gain more confidence in the outlook I could support three total this year. If inflation began to pick up, that would certainly solidify (that expectation). It could be three, it could be two, it could be four if things really pick up.”

Asked about U.S. President Donald Trump’s promise to boost the economy to a 4 percent growth rate, from about 2 percent in the last few years, Evans said: “Four percent would be really an outsized number.”

While that level of growth could be reached “in any given year,” he said it was hard to imagine given the economy is already doing well, the labor market is “very strong,” and sectors like automobile sales are at all-time highs.

Evans, who is a voter on the Fed’s policy-setting committee this year and supported last week’s move, also echoed a comment from Fed Chair Janet Yellen on Wednesday that suggested the central bank could try to push inflation, now at 1.7 percent, above a 2-percent target.

“There is room to get inflation up to 2 percent and in fact going beyond 2 percent a little bit to make sure we get there, and that it’s a symmetric inflation objective, so that’s ok,” Evans said.

(Reporting by Jonathan Spicer; Editing by Chizu Nomiyama)