Fully paid? Biden and GOP fight over infrastructure costs | Your money
WASHINGTON (AP) – Congressional negotiators and the White House appear poised to strike a roughly $ 1 trillion infrastructure deal. But they struggle with the hard part – how to pay for it.
As President Joe Biden returns to talks this week, the question of where the money will come from arises. And time is running out to resolve it.
Biden wants to raise taxes on corporations and households earning more than $ 400,000 a year. Republicans ruled out this, offering alternatives that Democrats find unacceptable. Both sides said infrastructure spending should be paid and not add to the national debt.
It is a long-standing challenge with no easy solution, which puts tension on the bipartite agreement around infrastructure. with the harsh realities of governing. It’s an issue that has thwarted previous attempts at an infrastructure bill, including under the Trump administration, and their ability to resolve it now is likely to determine whether a bipartisan deal is possible.
Republican Senate Leader Mitch McConnell has said user fees are the way to go. But the White House and leading Democratic lawmakers oppose the increase in user fees that have traditionally funded the construction of roads and bridges, the federal tax on gasoline, even if the increase is only him allow the rate of inflation to rise from its current level of 18.4 cents per person. gallon. The federal gasoline tax has not increased since 1993.
“The president’s commitment was not to raise taxes for Americans earning less than $ 400,000 a year, and the gasoline tax or vehicle mileage tax would do just that,” White House Press, Jen Psaki. “So that’s a non-starter for him. I would also note for the mathematicians in the room that this only raises $ 40 billion, which is a fraction of what this proposal would cost.”
Biden welcomed two key Democratic senators, Joe Manchin from West Virginia and Kyrsten Sinema from Arizona, to the White House on Monday. He told them he was encouraged by the plans that were taking shape but still had questions about the policy and funding of the proposal, a White House official said. Biden also said he was focusing on discussions about resolving the budget.
The two senators were part of a group that gathered on Capitol Hill Monday night, with some emerging optimistic that a bipartisan deal was within reach. “Significant progress,” said Senator Susan Collins, R-Maine. Senator Jon Tester, D-Mont., Said they were “very close” to having a full proposal from the bipartisan group as early as Tuesday.
One idea under consideration is to reallocate funds already approved as part of COVID-19 relief measures. Sen. Rob Portman, R-Ohio, said on Sunday they plan to reallocate more than $ 100 billion from COVID-19 aid to help pay for infrastructure. He left it up to the White House to come up with other ideas, as Democrats are reluctant to index the gasoline tax to inflation or create a user charge for electric vehicles.
“So the administration will have to come up with other ideas without raising taxes,” Portman told NBC’s “Meet the Press”. “What we don’t want to do is hurt the economy right now as we come out of this pandemic by raising taxes for working families.”
With the gasoline tax likely to be removed, other ideas include increasing revenue from communication spectrum leases and both sides are considering funds that could be raised by tackling tax evaders. Republicans estimate that about $ 63 billion could be raised by strengthening law enforcement by the Internal Revenue Service. Democrats say the amount could be even higher.
Another complication in the negotiations is that many Democrats question whether the size and scope of the infrastructure package discussed by the White House and Senators is adequate. In the $ 1,000 billion package, approximately $ 579 billion would be new spending and the rest would be a continuation of existing programs. Many Democrats are wary of a repeat of 2009 when Barack Obama was president and they spent months negotiating the details of the affordable care law with Republicans. In the end, Democrats alone adopted the package that became known as “Obamacare”.
“The amount of money they are offering is about a quarter of what the president talked about in terms of new money. It’s not enough, ”said Senator Bernie Sanders, I-Vt., On CNN’s“ State of the Union ”.
Lawmakers also hope to influence more than the price of the infrastructure bill. A key senator in the talks, Manchin unveiled his own draft proposal for green energy infrastructure investments on Monday. The 423-page bill contains a wishlist of energy-related proposals, and it will hold a hearing on the plan on Thursday in the Senate Committee on Energy and Natural Resources.
Senate Majority Leader Chuck Schumer, DN.Y., described the infrastructure bill being negotiated as a good start. But he says most Democrats don’t think he’s doing enough on the climate and also want him to address priorities like paid family leave. He advocates a “two-way” approach that leaves open the possibility of a much larger bill without Republican votes.
Using a special budget, the second infrastructure bill would only take a simple majority of 51 votes to pass. Such a move could include more of the priorities Biden set out as part of his US $ 1.8 trillion plan for families, such as paid family leave and universal kindergarten for ages 3 and 4.
Senator Lindsey Graham, RS.C., has warned the administration not to go this route.
“I would just say to President Biden, you have a party that is divided. You have a Republican Party that’s ready to meet you in the middle for a trillion dollars of infrastructure that could fundamentally change the way America does business on roads, ports and bridges and speed up electric vehicles, ” Graham said on “Fox News Sunday. “You have to decide what kind of president you are and what kind of presidency you want.”
Associated Press editors Josh Boak in Baltimore and Matthew Daly in Washington contributed to this report.
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