Clinton readies post-election push on highways, taxes

By Mike Dorning

Bloomberg News

WASHINGTON — Hillary Clinton’s brightening White House prospects have cleared a path for her to pursue a $275 billion infrastructure plan that would be paid for by corporate tax-law changes, a central part of a broad agenda that has been overshadowed by her attacks on Republican rival Donald Trump.

The rising likelihood of a Clinton presidency also augurs new influence for liberals in financial regulation, a strong push to expand workplace policies including paid medical and family leave, and efforts to fix Obamacare. The proposals if enacted would ripple across the economy, affecting companies including Apple Inc., Google Inc. and Microsoft Corp.

Yet her plans have received little attention in a 2016 race that’s largely been a referendum on Trump’s qualifications, particularly after allegations that the billionaire businessman made unwanted sexual advances toward women. Polls indicate the outcome is in little doubt: The election prognostication website FiveThirtyEight on Monday assessed an 86 percent chance of a Clinton victory.

Clinton says on her website that in her first 100 days as president she’ll seek approval of the “biggest investment in American infrastructure in decades,” creating tens of thousands of jobs. Gene Sperling, a Clinton economic adviser, said that a $275 billion infrastructure plan would be among her top three domestic priorities at a forum this month sponsored by the National Association for Business Economics.

President Barack Obama proposed an infrastructure plan, financed by a one-time tax on the profits of U.S. multinational corporations repatriated from overseas, that failed because congressional Republicans insisted on a U.S. corporate tax overhaul. While House Speaker Paul Ryan still seeks a broader tax deal, Republicans might be more willing to consider a piecemeal approach after a bruising Election Day loss.

Many of the policy shifts Clinton will attempt as president depend on the results of congressional elections, fights within both parties, and Clinton’s ability to influence lawmakers. But the parameters of the looming legislative battles are clear.

Should Republicans retain control of at least one chamber of Congress, the infrastructure bill is a likelier win for the new president than the other two priorities Sperling said lead Clinton’s agenda: a comprehensive immigration overhaul and changes to strengthen the Affordable Care Act. Sperling and other Democrats say Republicans may be willing to make deals on those issues as well — if they lose badly at the polls.

Clinton has said she would finance infrastructure spending through unspecified “business tax reform.” Incoming Senate Democratic Leader Chuck Schumer of New York said on CNBC Oct. 18 that the money would come from a lower tax rate on profits stashed overseas by U.S. corporations. Other Democrats close to the Clinton camp said they anticipate she would adopt the Schumer approach.

The lower tax rate would produce a one-time bonanza as companies brought home an estimated $2.5 trillion stockpiled abroad. Obama proposed an infrastructure plan financed by a one-time 14 percent tax rate on overseas profits returned to the U.S. instead of the current 35 percent maximum rate. Congressional Republicans previously proposed an 8.75 percent rate on repatriated cash.

Goldman Sachs Group Inc. said in a recent report that Obama’s plan would have yielded at least $240 billion for the government to spend.

Liberals in Clinton’s party would likely chafe at tax cuts solely benefiting multinational corporations, probably requiring the deal be sweetened for low- and middle-income families, a Democrat close to the Clinton camp said. The person asked not to be identified to candidly discuss Clinton’s likely legislative strategy.

Clinton has proposed an expanded child-tax credit, a tax credit for low-income workers without children, and paid family and medical leave for up 12 weeks.

Republican congressional leaders, particularly Senate Republican leader Mitch McConnell of Kentucky, have said that broader business tax cuts should be included in a repatriation of overseas profits. Ryan and his party have pushed for a more comprehensive overhaul of the U.S. tax code that would include the largest cut in corporate tax rates in history.

Should Republicans hold the House of Representatives, a deal with Clinton on an infrastructure bill is unlikely, one Republican leadership aide said. In the last year, Obama has signed laws authorizing new spending for highways and airports, and a bill for water projects is expected to become law after the election, reducing the appetite for a large infrastructure plan, the person said. The aide asked not be identified handicapping a debate that hasn’t yet happened.

Clinton is also likely to encounter pressure in her own party as she chooses people for key jobs in agencies regulating banks and Wall Street firms. Liberal allies, led by Sen. Elizabeth Warren of Massachusetts, are pushing for a more activist stance by regulators, which could include tougher rules on executive compensation, more disclosure of corporate political contributions and stricter rules on bank capital and liquidity.

Hispanic advocacy groups that supported Clinton’s campaign — and registered large numbers of Latino voters — are pressuring her to revise U.S. immigration law and create a path to citizenship for undocumented workers. Many Republicans, including Trump, have derided such a policy as amnesty, and his campaign is centered on a plan to seal off the southern border with Mexico and deport undocumented immigrants.

Work and family issues also are likely to be an early focus of a Clinton administration, reflecting the biography of a former working mother who would become the first female president. One sign of the issue’s political power during the campaign was Trump’s own proposal, contrary to Republican orthodoxy, to require paid maternity leave and enact larger tax benefits to offset child-care costs.

“I think she is going to put her paid family leave, her work-family balance agenda right up there in the first 100 days,” said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities and a former Obama administration economic adviser. “She is so identified with that, it really makes sense for her to come right out of the gate with that.”

Clinton also must grapple with the Affordable Care Act’s problems: large insurers have pulled out of government-run marketplaces selling insurance, citing financial losses, and premiums are rising across the country as enrollment has lagged projections. While some congressional Republicans have suggested they would be willing to work with Clinton to change the law, their party has sought its repeal ever since Obamacare was signed in 2010.