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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Top Republican accuses White House of moving goalposts on infrastructure –┬ábut she didn’t budge on either of Biden’s requests

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

  • Biden ended infrastructure negotiations with Sen. Shelley Moore Capito on Tuesday.
  • Capito later said she was “disappointed” at how things ended and Biden kept “moving goalposts” on her.
  • But her GOP group barely budged on their offer and refused to raise taxes, which Biden proposed.
  • See more stories on Insider’s business page.

After nearly six weeks of back and forth between President Joe Biden and West Virginia Sen. Shelley Moore Capito on infrastructure, Biden ended the negotiations on Tuesday after failing to come to an agreement.

Capito said in a Fox News interview on Wednesday that the White House “kept moving the goalposts” on the Republican group, and she was “frustrated” with how things turned out.

“I’m a bit disappointed and frustrated that the White House kept moving the ball on me and then finally just brought me negotiations that were untenable and then ended the negotiations altogether,” Capito said. It’s unclear exactly what Capito was referring to, but the public statements from both sides indicate the White House kept coming down on the cost of the package and the GOP was inflexible.

There seemed to be disappointment on both sides. White House Press Secretary Jen Psaki said in a statement on Tuesday that Biden was disappointed that “while he was willing to reduce his plan by more than $1 trillion, the Republican group had increased their proposed new investments by only $150 billion.”

Capito and the group of Republicans first brought Biden a $568 billion infrastructure offer, which was significantly smaller than the $2.25 trillion infrastructure plan he proposed. He then offered the group $1.7 trillion, and even suggested going as low as $1 trillion, but the GOP only came back to him with a $928 billion offer, which included only $150 billion in new spending.

Since unveiling his plan, Biden has kept saying he’s committed to a bipartisan agreement, as seen with his willingness to come down on cost to get both sides of the aisle on board. For instance, after his talks with Capito collapsed, he reached out to some members of a new bipartisan group about another infrastructure proposal. Sen. Mitt Romney of Utah, a member of that group, has already said that tax increases are out of the question.

Using corporate tax hikes to fund his plan is one of the things Biden has remained firm on, but the GOP group never budged on the possibility of doing so, calling it a “red line” and suggesting repurposing unused stimulus funds instead.

“The pay-fors that they brought to me the final time were many taxes,” Capito said. “We had told them before we could do this without raising taxes and we gave them great opportunity to look at our pay-fors and how we would pay for this. I think when they brought the tax hikes before me the last time when I was in the Oval Office I knew they weren’t really serious at that point.”

Given that tax hikes are a core component of Biden’s plan, the likelihood of reaching a bipartisan agreement is slim, and Senate Majority Leader Chuck Schumer said during a press briefing on Tuesday that Democrats are preparing to use reconciliation, meaning passing a bill without any GOP votes.

“We all know as a caucus we will not be able to do all the things that the country needs in a totally bipartisan way,” Schumer said. “So at the same time, we are pursuing the pursuit of reconciliation.”

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Elizabeth Warren says the GOP infrastructure plan is not a ‘serious’ counteroffer and leaves out women

senator elizabeth warren
Sen. Elizabeth Warren.

  • GOP Senators introduced a $928 billion counteroffer to Biden’s $2.25 trillion infrastructure plan.
  • Massachusetts Sen. Elizabeth Warren said their plan is not a “serious” offer and leaves out women.
  • She, along with other Democrats, also criticized the GOP idea to repurpose stimulus aid to fund infrastructure.
  • See more stories on Insider’s business page.

A group of Republican senators unveiled their $928 billion counterproposal to President Joe Biden’s infrastructure plan, increasing the price tag from their first $568 billion counteroffer.

Massachusetts Sen. Elizabeth Warren was not impressed with this new plan.

“I don’t really think this is a serious counteroffer,” Warren told MSNBC following the release of the plan.

The past few weeks in the White House have been filled with Oval Office meetings attempting to get Republicans on board with Biden’s $4 trillion infrastructure plan. After a GOP group – led by Sen. Shelley Moore Capito of West Virginia – met with Biden to discuss their original $568 billion proposal, the White House countered that with a $1.7 trillion proposal, down from its initial price tag of $2.25 trillion on the American Jobs Plan.

And on Thursday, the Republicans brought a $928 billion offer to the table, largely focused on funding for physical infrastructure, and only a $257 billion increase in new government spending beyond what Congress has already authorized.

Warren criticized the plan for lacking a clear funding method and only suggesting repurposing already allocated stimulus funds.

“First of all, they don’t have pay-fors for this, it’s not real,” Warren said. “They have this illusory notion of how we’re going to take money that’s already been committed to other places and other spending.”

She added that women are also left behind in this package because while Biden’s American Families Plan proposed significant investments in childcare, the GOP offer does not allocate any funding toward care-economy measures.

“Millions of women are out of the workforce right now and one out of four says the reason [for that]: I can’t get childcare,” Warren said. “This is our chance to expand our idea of what infrastructure means. Give women who want to work a real chance in the workplace,” she added.

Other Democratic lawmakers joined Warren in criticizing not only the GOP plan, but the idea of using stimulus aid to pay for it instead of the corporate tax hikes Biden had originally proposed.

“They’re talking about using the child tax credit to pay for this,” Colorado Sen. Michael Bennet told reporters. “This is a significant tax cut for working people. Ninety percent of America’s kids – more than that – are going to benefit. It’s going to cut childhood poverty almost in half so I really don’t understand their desire to raise taxes on working people.”

And Insider reported that 14 state treasurers are urging Congress to refrain from repurposing stimulus money to fund infrastructure, given that the aid is much needed to sustain economic recovery for state and local governments.

“This is called a jobs bill. It’s infrastructure and jobs,” Warren said. “So long as we’re investing in roads and bridges and lots of concrete, about 90% of those jobs are going to be for men. But when we’re talking about childcare, those jobs are nearly all going to women and those jobs today pay far too little. We have a chance to turn those into good paying, professional jobs.”

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The GOP prepares to come up $500 billion on infrastructure after Biden comes down by $600 billion

Roger Wicker Mississippi
Sen. Roger Wicker.

  • GOP Sen. Roger Wicker said Republicans will bring Biden a $1 trillion infrastructure counter-offer.
  • This follows the White House’s offer to cut its $2.25 trillion plan down to $1.7 trillion.
  • Some Republicans still think $1 trillion is too high, while the parties are far apart on funding new spending.
  • See more stories on Insider’s business page.

In his latest attempt to get Republicans on board with his infrastructure plan, President Joe Biden offered them a $1.7 trillion plan last week, down from his initial $2.25 trillion proposal. GOP lawmakers plan on countering that with a $1 trillion plan on Thursday.

A group of GOP senators, led by Shelley Moore Capito of West Virginia, met with Biden two weeks ago to discuss their initial $568 billion counter-proposal to Biden’s infrastructure plan. They missed last Tuesday’s deadline to bring the president a new offer, but Sen. Roger Wicker of Mississippi told reporters on Tuesday that a new offer close to $1 trillion will be brought to the table on Thursday.

“We’re going to hit a figure very close to what the president said he would accept, and it will end up being the most substantial infrastructure bill ever enacted by the federal government,” Wicker told reporters.

Capito’s office said in a statement to Insider last week that Friday’s White House offer was “well above the range of what can pass Congress with bipartisan support” and that Republicans and the White House still differed on what’s considered infrastructure, how much should be spent on it, and where that money should come from.

While Biden has proposed funding the plan through corporate tax hikes, Republicans have strongly opposed doing so, instead suggesting “user-fees,” a set of charges levied on the users of a federal service or good, like raising the federal gas tax.

And last week, Insider reported that Capito floated the idea of taking unused federal unemployment money to fund infrastructure, which comes as 23 GOP-led states have so far announced they are ending unemployment benefits early following the weak April jobs report.

Wicker told reporters on Tuesday that repurposing stimulus funds, and not spending any new money, will be something the GOP will push for. Republicans are also pushing take Biden’s proposed tax hikes on the richest Americans and multinational firms off the table in any deal.

“I do think there’s a path forward here if the president is willing to take it,” Sen. Joni Ernst of Iowa, the fourth-ranking Senate Republican, told Insider. “As long as we’re not talking about tax hikes, I think that’s really important because Republicans are not going to support any tax hikes.”

Biden has proposed lifting the corporate tax rate to 28% from the 21% level put in place in the 2017 Republican tax law. He’s also seeking to impose higher taxes on investors and raise the marginal income tax rate.

Not all Republicans support the $1 trillion figure, likely complicating a bipartisan plan. Sen. Mitt Romney of Utah told reporters that it’s “unlikely” he’d support a number that high, which could pose another barrier to reaching a bipartisan agreement.

As these negotiations continue, Democratic lawmakers are increasingly urging Biden to forego these discussions and move ahead with passing the comprehensive package he proposed, with corporate tax hikes, to get urgent aid to Americans.

“We appreciate the White House’s interest in reaching across the aisle to seek Republican support for overwhelmingly popular infrastructure priorities …” House Democrats wrote in a letter. “While bipartisan support is welcome, the pursuit of Republican votes cannot come at the expense of limiting the scope of popular investments.”

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The White House offers to cut infrastructure plan down to $1.7 trillion

amtrak joe biden
President Joe Biden.

  • The White House presented a $1.7 trillion infrastructure counteroffer to Republicans.
  • It slashes the $2.25 trillion price tag substantially and reduces funding for roads and bridges.
  • The counteroffer came after a GOP group did not meet a Tuesday deadline to bring a new offer.
  • See more stories on Insider’s business page.

President Joe Biden has offered to cut down the cost of his infrastructure plan – the American Jobs Plan – from $2.25 trillion to $1.7 trillion, presenting a counteroffer to Republicans on Friday.

The offer did not address the $1.7 trillion American Families Plan, which is largely focused on care-economy measures, so the initial $4.1 trillion combination of packages would now come to about $3.2 trillion.

White House press secretary Jen Psaki said that officials including Transportation Secretary Pete Buttigieg and Commerce Secretary Gina Raimondo offered up the reduced package.

“In our view, this is the art of seeking common ground,” Psaki said.

Psaki said that proposed funding for broadband was reduced to match that of Republicans, and proposed funding for roads, bridges, and major projects was also reduced to be more in line with senators’ proposals. Investments in research and development, supply chains, manufacturing, and small businesses will be shifted into different legislative pushes.

But the White House said it would continue to push for funding for critical transportation infrastructure, especially railways.

Psaki also said the White House planned to reiterate the president’s unwillingness to raise taxes on Americans making under $400,000, such as through a gas tax and user fees.

“He believes that the extraordinarily wealthy, that companies – many of whom have not paid taxes in recent years – can afford a modest increase to pay for middle-class jobs,” Psaki said.

Republicans had previously offered a $568 billion counteroffer to the White House, well below the $2.25 trillion originally proposed and still substantially lower than the new counteroffer. It would preserve Trump-era tax cuts, which are directly countered in Biden’s proposed funding.

After the GOP group met with Biden last week to discuss its $568 billion counterproposal, Biden gave them a Tuesday deadline to bring him a new plan to negotiate, but that never happened.

Instead, the group met with Buttigieg and Raimondo, and a new plan wasn’t introduced, with the senator from West Virginia who led the Republican plan, Shelley Moore Capito, telling reporters after the meeting that there was “progress, but we still got a ways to go.”

“I think they’re digesting what we proposed, and I think the plan is for them to react to that,” Capito added.

Capito’s office said in a statement to Insider that Friday’s White House offer was “well above the range of what can pass Congress with bipartisan support” and that Republicans and the White House still differed on what’s considered infrastructure, how much should be spent on it, and where that money should come from.

“Based on today’s meeting, the groups seem further apart after two meetings with White House staff than they were after one meeting with President Biden,” Capito’s office said. “Senate Republicans will further review the details in today’s counteroffer and continue to engage in conversations with the administration.”

Separately this week, Capito also floated using unused unemployment benefits to fund infrastructure after April’s weak jobs report, which caused a growing number of GOP-led states to end Biden’s weekly $300 unemployment benefits early.

The White House’s counteroffer comes as Democrats are increasingly calling on Biden to ditch negotiations with Republicans and act big on infrastructure legislation.

Psaki said the negotiations were an art of a “different kind of a deal – a deal for the working people.”

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59 House Democrats urge Biden to ditch Republicans and go even bigger on $7 trillion of infrastructure spending

Rep. Pramila Jayapal congress tech antitrust hearing
Rep. Pramila Jayapal.

  • House Democrats sent a letter to Democratic leadership urging them to go even bigger on infrastructure funding.
  • They said that Biden should see past GOP negotiations and pass an urgently needed bill.
  • Biden has remained committed to bipartisanship and plans to negotiate on another GOP counter-offer.
  • See more stories on Insider’s business page.

Bipartisanship is the theme of President Joe Biden’s agenda these days, with him dedicating the majority of his May in persuading both sides of the aisle to get on board with his $4 trillion infrastructure plan.

But House Democrats are worried that these negotiations, while well-intentioned, could narrow down legislation that Americans urgently need, and they want Biden to go bigger – in line with his campaign promises.

Led by Reps. Pramila Jayapal of Washington and Jimmy Panetta of California, 59 House Democrats sent a letter to Speaker of the House Nancy Pelosi and Senate Majority Leader Chuck Schumer on Monday, urging them to take the opportunity to go big on infrastructure investments. They outlined three priorities regarding the size, scope, and speed of Biden’s American Jobs Plan, and they urged the congressional leaders to not get bogged down by Republican counter-offers. The letter was first reported on by ABC News.

“We appreciate the White House’s interest in reaching across the aisle to seek Republican support for overwhelmingly popular infrastructure priorities to invest in caregiving, workforce development, the environment, housing, and education, and to make the very wealthy and large corporations pay their fair share in taxes to reduce inequality,” they wrote in the letter. “While bipartisan support is welcome, the pursuit of Republican votes cannot come at the expense of limiting the scope of popular investments.”

A group of Senate Republicans, led by Shelley Moore Capito of West Virginia, introduced a $568 billion counter-proposal to Biden’s infrastructure plan. They have a Tuesday deadline to bring the president a new offer to negotiate, but Democrats don’t want this to be the focus of Biden’s agenda.

Here are the three main priorities the Democrats outlined to Schumer and Pelosi:

(1) Size

The lawmakers want Biden to prioritize his campaign promise of a $7 trillion infrastructure investment, including a four-year, $2 trillion investment on climate-focused infrastructure. Currently, Biden’s American Jobs Plan proposes $2.3 trillion over eight years, but Democrats want Biden to “maintain an ambitious infrastructure size” and go even bigger.

(2) Scope

After Republicans introduced their $568 billion infrastructure plan, Democrats called it “a joke” and “a slap in the face” given how small it was compared to Biden’s. In the letter, the Democrats cited Republicans’ “widespread climate denial,” among other things, as reasons to see past bipartisan negotiations and not succumb to a deal that doesn’t meet the needs of the economy and the climate.

(3) Speed

Given the fierce Republican opposition to Biden’s infrastructure plan as he proposed it, the Democratic group said “that robust legislation comprising the American Jobs Plan and American Families Plan must be enacted as rapidly as possible, preferably as a single, ambitious package combining physical and social investments hand in hand.”

Republican lawmakers said that Biden’s plan focuses on too many things beyond physical infrastructure, like roads and bridges, but Democrats remained firm in their messaging that care-economy measures, like universal pre-K and affordable housing, belong in infrastructure.

Biden and Republican lawmakers have expressed the desire to strike a bipartisan deal by Memorial Day, and Pelosi aims to get a bill to the House floor by July 4. Democratic leaders, including Pelosi and Schumer, have remained optimistic on reaching a bipartisan agreement.

“The president has his vision,” Pelosi told reporters last week. “The Congress will work its will. In any event, I felt optimistic about our ability to pass such a bill, and more optimistic now about being able to do so in a bipartisan way.”

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Democrats torch the 2-page GOP infrastructure blueprint as ‘a slap in the face’ and ‘a joke’

Ron Wyden
Sen. Ron Wyden (D-OR).

  • Democrats assailed the two-page GOP infrastructure blueprint, calling it too meager.
  • One Democratic senator said the GOP was “light years” away from their position.
  • The prospect of a short-term breakthrough on infrastructure appeared scant.
  • See more stories on Insider’s business page.

Democrats had scathing assessments for the two-page Republican infrastructure outline released on Thursday, a sign that a bipartisan deal was not immediately in sight on one of President Joe Biden’s top economic priorities.

A group of Senate Republicans led by Sen. Shelley Moore Capito of West Virginia had unveiled the $568 billion infrastructure blueprint that was less a detailed plan than a two-page outline of principles. It amounted to about a quarter of Biden’s proposed $2.3 trillion stimulus spending.

The GOP plan would spread out new spending over a five-year period, largely paid for with user-fees. It included no corporate tax hike, and set aside over half of its funding on to repair roads, highways, and bridges. Capito called it “a robust package” at a news conference.

But some Democrats sharply disagree – and they torched the plan as too meager to confront the dual crises of climate change and economic inequality.

“I think this Republican proposal is light years out of the ballpark in terms of being able to get a bipartisan compromise,” Sen. Ron Wyden, chair of the Senate Finance Committee, said on a press call. “They really dump it all on the backs of middle-class workers.”

Sen. Bob Casey of Pennsylvania pointed to the Republican plan slashing the $400 billion in-home elder care component of Biden’s infrastructure plan, calling it a “terrible insult” to average workers.

“When they eliminate every penny for that investment, that’s a slap in the face to not just older Americans and people with disabilities, millions of families would need this care over the next number of years,” he told reporters on the same press call.

Democratic opposition to the plan appeared to run deep, and aides said they were skeptical of Republican seriousness on cutting a deal. Insider granted anonymity to two aides so they could speak candidly.

“Having a two-pager with four bullets on four [revenue] raisers, I don’t think it’s very serious,” one Democratic aide said, referring to the GOP plan.

“It doesn’t do anything on climate, which is non-negotiable for our caucus,” the aide said. “We can’t let a decade go by without doing something more substantial on climate.”

“It’s a joke,” another Democratic aide said. “Their number is so low and achieves so few of the things even they agree are important. It’s not remotely in the ballpark of what is serious.”

Republicans recently defended the early plan, saying they sought to strike an agreement.

“Could we just kind of tone the rhetoric down here and really try to get something done?” Capito told Politico on Wednesday. “I understand disagreement, but I read that we’re trying to stall it out and not make it happen. Or being too cheap? We’re talking about a very robust package here.”

The plan set the stage for additional talks, though it was unclear how disagreements over revenue sources and the plan’s size would be bridged.

The White House said on Thursday it was ready to kick off negotiations with the group of Senate Republicans on an infrastructure plan. The GOP proposal drew Senate Minority Leader Mitch McConnell’s approval earlier in the day.

“The president has said from the beginning he would welcome any good faith effort to find common ground because the only unacceptable step would be inaction,” White House Press Secretary Jen Psaki said.

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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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GOP Senator says a ‘sweet spot’ on bipartisan infrastructure deal is less than half of what Biden wants

Shelley Moore Capito
Sens. Shelley Moore Capito, R-W.Va

  • Sen. Shelly Moore Capito said a “sweet spot” for a bipartisan infrastructure deal is less than half of what Biden wants.
  • “I would say probably into the $600 or $800 billion, but we haven’t put all of that together yet,” Capito told CNBC.
  • Other Republicans like Mitt Romney and Bill Cassidy are signaling there’s an infrastructure plan being drafted.
  • See more stories on Insider’s business page.

Republican Sen. Shelley Moore Capito of West Virginia said a middle ground between Democrats and Republicans on an infrastructure deal would be significantly less than half of the $2.3 trillion package that President Joe Biden seeks.

“I think the best way for us to do this is hit the sweet spot of where we agree and I think we can agree on a lot of the measures moving forward. How much? I would say probably into the $600 or $800 billion, but we haven’t put all of that together yet,” Capito told CNBC.

Capito laid out some potential revenue elements, including unused coronavirus relief funds, road usage fees for electric cars, and a vehicle miles-traveled tax. She also suggested raising the gas tax, a measure the Biden administration has already ruled out.

“It’s going to have to come from a lot of different sources, but this is important,” she said. Capito did not bring up lifting corporate taxes.

The West Virginia Republican later told Capitol Hill reporters there was a group were drafting a counterproposal, suggesting it would be sized somewhere between $600 billion to $800 billion. Capito was part of the Republican group that pitched a $618 billion counterproposal, which Biden along with Democrats ultimately rejected.

Other Republicans are signaling they are putting together a new package. Sen. Mitt Romney of Utah told reporters on Capitol Hill Wednesday there is a bipartisan group of 20 lawmakers evenly divided between Republicans and Democrats drafting one.

Then Sen. Bill Cassidy of Louisiana said on Tuesday that a bipartisan group was assembling an “alternative” to the Biden plan. He indicated it would double the amount of spending on roads and bridges from the $115 billion that the president is seeking.

The Biden infrastructure plan includes major funding to fix roads and bridges and set up clean energy incentives. It also has federal funds for in-home elder care, public transit, and schools, among other areas.

Democrats are pressing to take advantage of the cheap cost of borrowing to fund new investments they say will curb inequality and grow the economy.

Republicans, however, are opposed to the Biden package, viewing it as a colossal liberal wish-list. Capito criticized the Biden proposal’s expansive scope, arguing it should be constrained to roads, bridges, airports, broadband, and water infrastructure.

“If we’re going to do this together, which we want to do and is our desire, we’ve got to find those areas and take away the extra infrastructure areas that the president put into his bill like home health aides and school building and all of these kinds of things,” she told CNBC.

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