Wall Street executives, large corporations, and private equity firms are speaking to the White House and transportation officials about how to pay President Joe Biden’s eventual infrastructure bill.
Tax increases, public-private partnerships, and fee increases for bridge and motorway tolls are among the ideas that business leaders propose to the Biden administration.
The cost of the package is expected to be in the trillions of dollars, according to previous Biden proposals. It would follow the $ 1.9 trillion Covid bailout and stimulus package that has raised concerns in Washington about how the government could pay for a massive infrastructure initiative.
Biden campaigned for the president on a clean energy infrastructure plan that his team said would cost $ 2 trillion over four years. It included a push to have local trains, buses, and passenger cars run on electricity or clean fuel. At the time, Biden’s campaign did not include ways to pay for it.
According to people who have described these conversations, the White House has not yet committed to a plan to fund an infrastructure overhaul. A White House spokesman declined to comment. A spokesman for the Ministry of Transport has not returned a request for comment.
Democrats and Republicans have already drawn lines of battle on how to proceed with a bill. One of the debates in Congress is whether legislation should go through a bipartisan legislative process or a more partisan reconciliation that only requires a simple majority in the Senate.
Henry Cisneros, co-founder of a private infrastructure investment firm, told CNBC on Tuesday that he had had extensive discussions with the Department of Transportation’s policy advisors on infrastructure.
Cisneros, who was also the former head of the Department of Housing and Urban Development under Bill Clinton, recently co-authored papers describing the importance of including the input of local governments in large infrastructure projects.
Cisneros said he spoke with the DOT about this research and told CNBC that the agency is apparently waiting for the White House to determine next steps, including final payment for the methods.
Biden has publicly reiterated his campaign promise in the past few days to collect taxes on people who earn more than $ 400,000 and stated during the campaign that companies would see a tax hike as well. Republicans have already started pushing back tax increases.
Former Senator Blanche Lincoln, R-Ark, currently heads the RATE coalition, which is campaigning against a rise in the corporate tax rate. In a statement to CNBC, she said the corporate tax hike will hurt American businesses looking to recover from the coronavirus pandemic. Biden and the Democrats in Congress recently passed a $ 1.9 trillion law to ease coronavirus.
“American employers will struggle to rebuild better if they pay a higher corporate rate than their competitors in China,” said the former lawmaker. Lincoln added that “Congress should focus on filling in loopholes that allow profitable corporations to pay little or no taxes.”
She recently sent a letter to the White House with a similar message.
One proposal that finance managers are pushing is some form of large-scale private-public partnership, these individuals said. This could allow private equity firms to act as a means of funding some of the larger and more expensive projects.
In some cases, private equity giants like Blackstone, Carlyle Group, and KKR have been helping fund government projects for well over a decade.
Some of the people who described these conversations declined to be identified in order to speak freely.
These financiers, who have not spoken to the White House, are planning the best time to contact the administration to find out how private capital can play a role in paying for the infrastructure plan, these people said.
Other companies and business-friendly organizations such as the Chamber of Commerce have proposed various means of payment for the infrastructure plan that go beyond private public partnerships, such as increasing the gas tax.
Records show that companies such as General Motors and TC Energy have hired Jeff Ricchetti, brother of Joe Biden’s consultant Steve Ricchetti, to help with infrastructure, among other things.
“In terms of infrastructure, we look forward to working with the Infrastructure Administration and Congress and will be committed to investing in EV charging infrastructure to support an all-electric future,” said Jeannine Ginivan, a GM spokeswoman CNBC.
“We evaluate our consultants annually to ensure we are well-positioned to advocate policies that will support our customers, dealers and employees, strengthen our manufacturing presence in the US, and advance our vision of a world without crashes and emissions.” and no overload, “added Ginivan when describing Ricchetti’s lobbying for the company.
“Jeff Ricchetti is part of a diverse team of advisors who strategically advise and advise our company on a variety of energy issues,” Marc Palazzo, vice president of US Stakeholder Relations at TC Energy, told CNBC.
Another executive director closely associated with Biden said he was trying to encourage the administration to push forward a $ 4 trillion infrastructure spending package that would last 10 years. This person noted that in their talks, the Biden White House released its final proposal by Memorial Day on Capitol Hill.
Environment and Public Works Committee chairman Tom Carper, D-Del., Said he wanted his committee to pass new highway laws by Memorial Day.
Ed Mortimer, vice president of transport and infrastructure for the Chamber of Commerce, told CNBC in an interview on Wednesday that they were in regular contact with officials from the Biden White House and the DOT on infrastructure, including discussions about payment methods.
The chamber has proposed temporarily increasing the gas tax to pay for the plan. Mortimer pointed out that the gas tax has not been levied since 1993. DOT Secretary Pete Buttigieg has publicly pushed back on gas tax hikes to pay for improvements to national infrastructure.
“They listened. They said they were open, but we still don’t have a clear way of how it will actually be,” said Mortimer. “From our point of view, it is still a work in progress. Based on our general discussions with them, we hope that they will set up some principles in mid-April [Biden] may be an address for the state of the union, “he added.
The chamber, which was also vocal in advocating infrastructure reform during the Trump administration, is one of the largest corporate interest groups. It is currently in the midst of a campaign encouraging Congress to pass a comprehensive infrastructure bill by July 4th.
The group recently began running television ads in key state Ohio, calling for infrastructure reform.