The White House is giving bipartisan infrastructure negotiations until the end of June even as progressive opposition swells

US Senator Bernie Sanders, of Vermont, speaks with reporters about potential efforts to raise the minimum wage at the US Capitol in Washington.
Sen. Bernie Sanders (I-VT).

  • The White House is giving bipartisan economic talks until the end of June for a deal to pan out.
  • Biden could potentially shift course and embrace a Democratic-only plan after that.
  • An emerging bipartisan framework is struggling to draw substantial Democratic support.
  • See more stories on Insider’s business page.

White House officials are indicating to congressional Democrats that they’re giving bipartisan infrastructure negotiations until the end of June before potentially shoving Republicans aside and moving ahead with a Democratic-only plan.

It’s a fresh sign that the Biden administration’s patience is starting to wear thin at the slow pace of economic talks with the GOP. More than two months of back-and-forth discussions haven’t yielded a major breakthrough.

“They’re giving it a week or 10 days more and that’s about it,” House Budget chair John Yarmuth told reporters on Tuesday. “Then we move along with with reconciliation – for everything.”

The White House did not immediately respond to a request for comment.

Reconciliation, the legislative tactic that only requires a simple majority to pass certain bills, is increasingly favored by progressive Democrats, who want to combine President Joe Biden’s two-part plan into a massive $4 trillion bill and muscle it through both the House and Senate with only Democratic votes.

Many on the left fear Biden’s social spending proposals – such as paid family leave and universal pre-K – would not draw strong support from Democratic centrists in the Senate, and derail that part of the plan. But Biden is pursuing a deal and the White House is giving additional time for an agreement to be struck.

A bipartisan group encompassing 10 lawmakers from both parties is still drafting a nearly $1 trillion infrastructure plan, though key details remain unclear. It includes Republican Sens. Mitt Romney of Utah, Rob Portman of Ohio, Bill Cassidy of Louisiana, Lisa Murkowski of Alaska, and Susan Collins of Maine.

The Democratic side comprises Sens. Joe Manchin of West Virginia, Kyrsten Sinema of Arizona, Jeanne Shaheen of New Hampshire, Mark Warner of Virginia, and Jon Tester of Montana.

Sen. Bernie Sanders has come out in opposition to the emerging framework, saying its sources of revenue were not progressive enough. The group is eyeing indexing the gas tax to inflation, which may increase gas prices for average people, and repurposing stimulus funds from states.

“I wouldn’t vote for it,” Sanders told reporters on Monday. “The bottom line is there are a lot of needs facing this country. Now is the time to address those needs, and it has to be paid for in a progressive way, given the fact that we have massive income and wealth inequality in America.”

Other Democrats such as Sens. Ron Wyden of Oregon, Ed Markey of Massachusetts, and Jeff Merkley of Oregon are coming out against a plan that doesn’t contain aggressive measures to combat climate change.

“Put me down as skeptical of these theories that somehow you get everything you want, and somehow the priorities I have might be addressed down the road,” Wyden said Wednesday. Every lost Democratic vote means an additional Republican would be needed for the plan to clear the chamber – with a bare minimum of 10 GOP votes

Others are reserving judgment until more details emerge. “I got to look at it first,” Sen. Tim Kaine of Virginia told Insider.

“I want to see it, how are the Republicans gonna pay for it?” Sen. Sherrod Brown of Ohio, chair of the Banking Committee, told Insider. “I’ll see it, I don’t know yet.”

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Infrastructure talks enter last-ditch stage as both Republicans and Democrats eye gas tax increase

Mitt Romney congress
Republican Sen. Mitt Romney of Utah.

  • Sen. Mitt Romney told Insider a bipartisan group is weighing indexing the gas tax to inflation.
  • The gas tax hasn’t been raised since 1993.
  • Other Democrats appeared noncommittal, reflecting the delicate state of the talks.
  • See more stories on Insider’s business page.

Republicans and Democrats are eyeing a potential increase to the gas tax as both parties entered a chaotic last-ditch effort to strike a bipartisan infrastructure deal after a month of failed discussions between President Joe Biden and Senate GOP

The bipartisan group is in the early stages of assembling a plan they hope will draw at least 60 votes in the evenly-divided Senate. The cohort is equally split between Republicans and Democrats.

It includes Republican Sens. Mitt Romney of Utah and Rob Portman of Ohio, as well as Democratic Sens. Joe Manchin of West Virginia, Kyrsten Sinema of Arizona; and Jon Tester of Montana. The group emerged after Biden pulled the plug on negotiations with Sen. Shelley Moore Capito of West Virginia, who had been Republicans’ chief negotiator since April.

Romney told Insider on Thursday that the new working group was weighing indexing the gas tax to inflation. The 18-cent levy hasn’t been raised since 1993. “It keeps it at the same value that it has today,” the Utah Republican said.

The White House has previously said bumping the gas tax was off limits given Biden’s pledge to not hike taxes for households earning under $400,000. They did not immediately respond to a request for comment.

But the idea gained some momentum among Democrats when Sen. Dick Durbin of Iowa, second-ranked in the chamber, said he believed it “ultimately has to happen.”

“I look at it as a user fee. We pay taxes on gasoline because we want to drive our cars on safe roads,” Durbin told reporters.

Still, other Democrats in the group like Tester appeared noncommittal. “It’s not one of my favorite things, but we’ll see what the entire deal looks like,” he said in an interview. “I gotta see it in the context of everything, see what stays in and drops out.”

Sen. Mark Warner of Virginia, another Democrat in the group, declined to answer whether he supported it, a sign of the delicate state of the negotiations. “I actually think it’s better … until the cake is fully baked, to keep the ingredients quiet,” he told Insider.

Seth Hanlon, a tax expert and senior fellow at the liberal-leaning Center for American Progress, projected that indexing the gas tax to inflation would generate between $30 billion to $35 billion over a decade.

“It would be borne by consumers,” Hanlon told Insider. “We could get roughly the same revenue by rolling back the 2017 corporate tax cut by a fraction of a percentage point.”

He added that indexing the gas tax could have “modestly positive environmental effects,” though not if it’s only paired with spending focused on physical infrastructure and if it omits climate.

Biden’s two-part economic plans amount to $4 trillion in fresh spending on physical infrastructure like roads and bridges, as well as caregiving, cash payments, universal pre-K, community college, and a wide range of measures.

Both parties remain far apart on the scope of an infrastructure bill and how to pay for it. Other Republicans are increasingly signaling that climate provisions wouldn’t be included in their package.

Biden, along with congressional Democrats, are pushing clean energy tax incentives, a national system of electric vehicle charging stations, and federal funds to retrofit homes.

“If they’re looking for a line item that says ‘climate,’ they’re not going to see that,” Sen. Lisa Murkowski of Alaska said of Democrats.

A few Senate Democrats have stepped up their criticism of the bipartisan talks in recent days, warning that such talks risk omitting measures to combat climate change in an infrastructure deal. Another top Democrat threatened to withhold his vote if climate wasn’t sufficiently addressed.

“On a big infrastructure bill, to pass on climate altogether? No way!” Sen. Ron Wyden of Oregon, chair of the Senate Finance Committee, told Insider. “Think I’m blunt enough? No way.”

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Republicans have an idea who should pay to overhaul the country’s infrastructure: average people

Collins Romney Senate Republicans
Sen. Susan Collins (R-ME) and a group of Senate Republicans speak to reporters outside the White House in February.

  • Infrastructure talks are gaining steam in Congress, and Republicans are floating new road taxes on drivers.
  • The GOP is lining up against a corporate tax hike, arguing it would hurt job growth.
  • Instead, they’re hinting they may support user-fees such as a raise to the gas tax or vehicle mileage tax.
  • See more stories on Insider’s business page.

Infrastructure talks are starting to gain momentum in Congress two weeks after President Joe Biden rolled out his sprawling $2.3 trillion infrastructure plan.

A Republican-led group of 20 lawmakers is gearing up to make a counteroffer in a bid to strike a bipartisan deal on a smaller package. Sen. Shelley Moore Capito of West Virginia floated one this week in the range of $600 billion to $800 billion. But there are fresh signs of discord among Republicans on the price tag and it’s far from settled.

The sole factor binding them together is opposition to Biden’s corporate tax hike. Capito called it a “non-negotiable red line,” and other Republicans like Sens. John Cornyn of Texas and Susan Collins of Maine agreed they wouldn’t budge.

Instead, they are suggesting potential “user-fees,” a set of charges levied on the users of a federal service or good, such as raising the federal gas tax. User-fees have the support from the Chamber of Commerce, a powerful business group.

“My own view is that the pay-for ought to come from people who are using it. So if it’s an airport, the people who are flying,” Sen. Mitt Romney told reporters on Wednesday. “If it’s a port, the people who are shipping into the port; if it’s a rail system, the people who are using the rails; If it’s highways, it ought to be gas if it’s a gasoline-powered vehicle.”

That could shift the financial burden of an infrastructure overhaul from companies onto people, Kevin DeGood, an infrastructure expert at the liberal-leaning Center for American Progress, told Insider. It has triggered intense resistance among Democrats.

“If the Republican position is that we’re going only going to do this by raising the gas tax and we won’t accept an additional penny of corporate revenue, that won’t be something our caucus can get behind,” a Senate Democratic aide granted anonymity to speak candidly said.

Pressing Republicans to roll back Trump tax cuts is like urging Democrats to repeal Obamacare

The US generally funds infrastructure – encompassing roads, highways, and public transit like commuter rail – through a blend of state and federal funding. Only about a quarter of spending on transportation and water projects stems from the federal government now, per the Congressional Budget Office.

That’s down from a peak of 38% in 1977, leaving state and local governments to pick up more of the tab in recent decades. Biden’s last two predecessors urged more infrastructure spending. Former President Barack Obama sought to close corporate tax loopholes to repair roads, bridges, and tunnels in a jobs plan, but Republicans lined up against it.

Then former President Donald Trump pitched $1 trillion in new infrastructure spending during his 2016 campaign. Several efforts at a bipartisan package collapsed throughout his four years in office.

Now, a five-year highway funding bill expires in September, providing lawmakers with something close to a deadline to get their public-works priorities through Congress. Clashes are intensifying between Democrats urging tax hikes on corporations and high-earners, and Republicans pushing new fees on individuals.

Biden wants to raise the corporate tax rate from 21% to 28%, a partial repeal of Trump’s 2017 tax law. Brian Riedl, a budget expert at the right-leaning Manhattan Institute, said Republicans were unlikely to support rolling back their biggest economic achievement of the past decade.

“Republicans worked extraordinarily hard to enact a major rewrite of the tax code,” Riedl told Insider. “They’re not going to reverse their signature policy to pay for Joe Biden’s spending. That’s like asking Democrats to repeal Obamacare to pay for a Republican tax cut.”

He outlined a potential plan that would include repurposing unspent emergency stimulus funds to state and local governments, and moving federal money around in the annual budget.

Republicans floated a gasoline tax or a vehicle mileage tax on electric vehicles to finance infrastructure in lieu of business tax hikes. The federal gas tax hasn’t been lifted since 1993, and a vehicle miles-traveled tax has never been implemented at the federal level. Only two states have it in place, The Washington Post reported.

Business groups favor spending on roads and bridges, but don’t want to pay for it

Business groups generally want infrastructure spending, though targeted in scope. The Business Roundtable supports up to $1.5 trillion “to return US physical infrastructure to a state of good repair.”

“There are clear benefits to business from additional infrastructure investing, but we also think it’s unfair to ask business to shoulder or cover all of the additional costs of this public infrastructure investment,” Brendan Bechtel, a leading figure in the Business Roundtable, told CNBC on Wednesday.

But experts say there is simply not enough to be raised through charging new fees on drivers or other types of road taxes. “User-fees are not going to be sufficient and there are sectors that don’t have them,” DeGood told Insider. “For example, the Biden administration wants to put money into electrical transmission.”

Republicans are indicating they will favor a package that’s narrowly tailored to address roads, bridges, ports and other physical infrastructure. One Republican aide argued Democrats swelled the size of their plan, dampening the odds of a deal.

“I think this is going to turn into a slush fund for priorities for important constituencies and important members,” the aide said. “You’re going to get a much better work product if you have Republican senators involved in this. It will give it more longevity.”

Still, some Democrats such as Sen. Chris Coons of Delaware said it may be possible to split off elements of Biden’s plan and strike a $1 trillion bipartisan agreement, giving Democrats space to push through the rest using budget reconciliation in a party-line vote. GOP lawmakers wouldn’t be likely to endorse that, according to Riedl.

“Republicans aren’t gonna allow themselves to be chumps like that,” Riedl said.”They won’t give bipartisan cover to a process that will run them over in the end using reconciliation.”

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GOP senators oppose corporate tax hike as ‘non-negotiable red line’ as they float taxes on drivers to pay for infrastructure

Shelley Moore Capito
Sen. Shelley Moore Capito (R-WV).

  • Sen. Shelley Moore Capito said Republicans were strongly opposed to corporate tax hike.
  • “I think that’s a non-negotiable red line,” she said, and other top Republicans around her agreed.
  • Republicans are drafting an infrastructure plan that may be mostly financed with taxes on drivers.
  • See more stories on Insider’s business page.

Republican Sen. Shelley Moore Capito of West Virginia said that GOP senators won’t budge from their resistance to hiking corporate taxes, a key element in President Joe Biden’s infrastructure plan.

“I think that’s a non-negotiable red line,” Capito told reporters on Thursday of her party’s opposition to increasing corporate taxation.

Other Republican senators at the news conference said they agreed with Capito. The group also included Sens. John Barrasso of Wyoming, Roger Wicker of Mississippi, Deb Fischer of Nebraska, and John Cornyn of Texas.

Democrats assailed the Republican comments. Sen. Ron Wyden of Oregon, chair of the Senate Finance Committee, called the red line a “completely unreasonable” position.

“Republicans’ insistence that the most profitable companies in the world shouldn’t contribute a single penny to investments in roads, schools and our clean-energy future is simply not acceptable,” Wyden said in a statement.

A faction of Senate Republicans in recent days appeared to be prepping a $600 billion to $800 billion infrastructure counterproposal to Biden’s $2.3 trillion package. Several lawmakers suggested financing the plan with a vehicle mileage tax on electric vehicles or raising the gas tax.

“I think we still haven’t defined what we mean by infrastructure and what’s going to be included and so how much it’s going to be, we don’t really have an idea,” Sen. Mitt Romney of Utah told reporters on Thursday. “It’s a very early process that we’ve engaged in.”

Still, other Democrats described the $800 billion indicated by Capito as too meager to address the country’s infrastructure needs. “We’re going to do whatever it takes. If it takes $4 trillion, I’d do $4 trillion but we have to pay for it,” Sen. Joe Manchin of West Virginia told reporters on Thursday.

A JPMorgan economic research note on Thursday found that, although the corporate tax rate was higher than the global average before former President Donald Trump’s 2017 tax cut, the US had a lower ratio of corporate tax revenues to GDP dating back to 2000.

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Senate Republicans are drafting their own infrastructure plan and want to tax people for it, not corporations

Mitt Romney
Sen. Mitt Romney (R-UT).

  • Republicans are starting to draft an infrastructure plan in a bid to strike a deal with Biden.
  • It may shift the financial burden of the plan onto people instead of large corporations.
  • The plan could come in at less than half of the $2.3 trillion proposal laid out by the White House.
  • See more stories on Insider’s business page.

A group of Senate Republicans is assembling an infrastructure plan, part of a bid to strike a deal with President Joe Biden on a package that’s more narrowly targeted in scope.

The Republican faction appears to consist of the same 10 GOP senators who pitched Biden a $618 billion stimulus package in early February. Those negotiations didn’t yield a breakthrough, as the Democrats passed a $1.9 trillion stimulus without any Republican votes.

These infrastructure proposals are shaping up to be similar, as the Republican group is preparing to unveil an infrastructure bill likely worth $600 billion to $800 billion, much smaller than Biden’s $2.3 trillion plan.

The bloc includes Sens. Mitt Romney of Utah, Bill Cassidy of Louisiana, and Shelley Moore Capito of West Virginia.

Here are some emerging outlines of the plan, based on comments from those Republican lawmakers:

  • $600 billion to $800 billion price tag.
  • Focused on roads, bridges, highways, airports, water and broadband.
  • May double the spending on roads and bridges from Biden plan ($115 billion).
  • Financed with “user-fees” such as a tax on vehicle-miles traveled.
  • No corporate tax hikes.

Romney said told reporters the plan remained in its “early stages,” an indication many details still need to be hashed out. Yet the developments could lead to weeks of negotiations between the Republican-led group and the White House on a smaller infrastructure plan.

Capito on Wednesday said “a sweet spot” for an bipartisan infrastructure deal would range between $600 billion to $800 billion – less than half of the $2.3 trillion package Biden laid out.

“What I’d like to do is get back to what I consider the regular definition of infrastructure in terms of job creation. So that’s roads, bridges, ports, airports, including broadband into that, water infrastructure,” she told CNBC.

‘The people who are using it’ should pay for infrastructure

Other Republicans say they would back shifting the cost of the package from large companies onto the “users” who benefit from government spending. Many are strongly opposed to reversing the Trump tax law to pay for an infrastructure overhaul.

“My own view is that the pay-for ought to come from people who are using it. So if its an airport, the people who are flying,” Romney told reporters. “If it’s a port, the people who are shipping into the port; if it’s a rail system, the people who are using the rails; If it’s highways, it ought to be gas if it’s a gasoline powered vehicle.”

Romney also said he supports implementing a mileage fee on drivers of electric vehicles. Then Capito suggested redirecting unused stimulus money to pay for an infrastructure plan among other measures.

“We’re going to look at Vehicle Miles Traveled as a possibility when you look at fleets or when you look at electric vehicles. We’re going to look at assessing electric vehicles for road usage even though they don’t pay into the gas tax,” she said.

Meanwhile, Cassidy is pushing for an even bigger federal commitment to repair roads and bridges.

“Something I would like to see is double the money for roads and bridges,” he said Wednesday, adding he was in talks on a plan alongside Gov. Larry Hogan of Maryland, the head of the National Governors Association.

News of the Republican plan triggered some early criticism from Sen. Bernie Sanders, who heads the Senate Budget Committee.

“We have a major crisis in terms of roads, bridges, water systems, affordable housing, you name it. [The GOP price tag] is nowhere near what we need,” he told reporters on Wednesday.

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