Infrastructure Talks Mired In Gridlock Over Scope, Taxes

Republicans and Democrats agree on the importance of infrastructure spending. They also agree that it should be paid for. Where their views sharply diverge, however, is on what even counts as infrastructure as well as how new projects ought to be financed. 

The long-running debate over a major infrastructure overhaul is playing out once more in bipartisan talks between President Joe Biden and congressional Republicans. The differences of opinion on the issue reflect the growing rural/urban divide among the parties themselves. 

Republicans from more rural areas of the country, for example, believe that people who use things like cars, roads, and bridges ought to bear the burden of new infrastructure spending. Democrats who hail from cities and towns, meanwhile, favor making corporations contribute more to a system their businesses rely on. 

Negotiations at the White House involving Biden and several groups of bipartisan lawmakers have yet to yield any significant progress. A group of Republicans, led by Sen. Shelley Moore Capito of West Virginia, is expected to unveil a $500-800 billion infrastructure proposal this week. But that topline number would represent a fraction of Biden’s broader $2-3 trillion infrastructure and jobs plan, which includes things like elder and child care, as well as affordable housing and school funding. 

The early details surrounding the GOP’s infrastructure counteroffer didn’t sit well with Senate Democrats on Wednesday. 

“I think that’s really, really light,” Sen. Bob Casey (Penn.) told HuffPost when asked about the plan.

“The Republicans are trying to find a way once again not to meet the needs of the American public,” added Sen. Elizabeth Warren (Mass.).

It’s still early in the process and Congress isn’t expected to take up actual legislation until later this summer. But already, both sides are drawing lines over what sort of revenue they are willing to accept in order to finance an infrastructure overhaul. Republicans oppose any increase to the corporate tax rate; Democrats believe user fees such as tolls and added gas taxes would unfairly disadvantage the middle class. 

“Hell no, don’t raise them! I got people that have to drive a long way to make a living,” Sen. Joe Manchin (D-W.Va.) told HuffPost on Wednesday when asked about hiking user fees and gas taxes. “That just makes it harder on the working person. That’s not the way to go.”

Manchin, a key moderate senator pivotal to any bipartisan deal, supports raising the corporate tax rate to 25% from 21% lower than Biden’s proposed rate of 28% to pay for infrastructure spending. No Republican has endorsed the 25% rate yet. 

Sen. Mitt Romney (R-Utah), who, along with Manchin, is part of a bipartisan group seeking to find a middle ground in the Senate, said that revenue raisers such as added tolls and passenger airport fees ought to be included in the discussions. 

“The White House is clear they don’t want to see any tax increase for people making under $400,000 a year. I understand that. But having a toll at a bridge is not a tax on people earning under $400,000 a year,” Romney argued. 

Romney also suggested allowing states to dip into funds Congress appropriated for COVID-19 relief to finance infrastructure projects, saying that his state is “awash” in federal money. The $1.9 trillion American Rescue Plan Democrats passed unilaterally earlier this year included hundreds of billions of dollars for states and localities whose revenues dried up during the pandemic. It’s unclear whether Democrats would go for this idea. 

Democrats are winning the battle over how to pay for infrastructure   at least when it comes to public opinion. A Morning Consult/Politico poll released on Wednesday found that 65% of all voters support corporate tax hikes to pay for Biden’s infrastructure plan, including 42% of Republicans. 

But there are also broad philosophical differences among lawmakers over what counts as infrastructure. Biden’s administration is trying to stretch the definition of traditional infrastructure from things like roads, bridges, and waterways to include “human” infrastructure needs such as home and elder care, child care, better schools, and more affordable housing. But that argument hasn’t convinced Republicans who view Biden’s plan as a “Trojan horse.”

“They’ve assembled a patchwork of left-wing social engineering programs and want to label it ‘infrastructure,’” Senate Minority Leader Mitch McConnell (R-Ky.) complained Wednesday. 

So far, negotiations over Biden’s infrastructure and jobs plan are advancing in a similar fashion to his $1.9 trillion COVID relief and stimulus package. The big difference this time is that, unlike on COVID relief, he’s not pressed for time due to a key deadline such as expiring unemployment benefits. The White House is making more of an effort to court Republicans on infrastructure or at least make it appear so to win over the public and appease Manchin. 

In the end, if both sides don’t budge, Biden’s infrastructure and jobs plan could pass the same way unilaterally via budget reconciliation. 

“We have to come together otherwise it’s just not going to go anywhere,” Sen. Joni Ernst (R-Iowa) said Wednesday when asked about the two sides’ opposite negotiating positions.