WASHINGTON – Congressional negotiators and the White House appear open to striking a roughly $1 trillion deal on infrastructure. But they are struggling with the hard part – how to pay for it.
As President Joe Biden jumps back into the talks this week, the question of where the money will come from looms large. And time is running short to solve it.
Biden wants to increase taxes for corporations and those households making more than $400,000 a year. Republicans have ruled that out, putting forward alternatives that Democrats find unacceptable. Both sides have said the infrastructure spending should be paid for and not add to the national debt.
It's a problem that has thwarted previous attempts at an infrastructure bill, and their ability to solve it now is likely to determine whether a bipartisan accord is possible.
Senate Republican leader Mitch McConnell has said user fees are the way to go. But the White House and key Democratic lawmakers oppose increasing the user fee that has traditionally funded road and bridge construction, the federal gas tax, even if the increase is just allowing it to rise at the rate of inflation from its current level of 18.4 cents per gallon, which has not increased since 1993.
“The president's pledge was not to raise taxes on Americans making less than $400,000 a year, and the proposed gas tax or vehicle mileage tax would do exactly that,” White House press secretary Jen Psaki said. “So that is a nonstarter for him. I'd also note for the mathematicians in the room that only raises $40 billion, which is a fraction of what this proposal would cost.”
Biden hosted two key Democratic senators, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, at the White House on Monday. He told them he was encouraged by the plans that were taking shape, a White House official said.
The two senators were among a group huddling late Monday at the Capitol, some emerging upbeat that a bipartisan deal was within reach. Sen. Jon Tester, D-Mont., said they were “very close” to having a full proposal from the bipartisan group as soon as today.
One idea under consideration is reallocating money already approved as part of COVID-19 relief measures. Sen. Rob Portman, R-Ohio, said Sunday that they're looking at repurposing more than $100 billion from COVID-19 relief to help pay for infrastructure.
He put the onus on the White House to put forward other ideas.
With the gas tax likely out, other ideas include raising revenue from communication spectrum leases, and both parties are eyeing funds that could be raised by going after tax dodgers. Republicans estimate about $63 billion could be raised by beefing up enforcement by the Internal Revenue Service. Democrats say the amount could be even higher.