WASHINGTON – President Biden’s ambitions for a large-scale investment in the country’s aging public building system, along with other parts of his economic agenda, depend on what has always been the toughest problem for lawmakers: agreeing how to pay for the spending.
That question has led a group of centrist senators to find creative ways to fund nearly $ 600 billion in new spending as part of a potential compromise plan for investing in roads, broadband internet, electricity, and other infrastructure projects want to include the federal government.
The White House and Republicans have ruled out entire categories of potential revenue growth opportunities. The impasse is the subject of increasingly urgent talks between a large group of Senate Democrats, Republicans, White House officials, and sometimes the President himself.
Some of the ideas Senators have debated in the past few days include reallocating unspent coronavirus aids, increasing enforcement by the IRS, and introducing user fees for drivers, including indexing gas tax to inflation.
Mr Biden dispatched aides to Capitol Hill Tuesday to discuss what his secretary, Jen Psaki, said had made progress but had not reached an agreement. Top White House officials will meet with Senator Chuck Schumer of New York, majority leader, and spokeswoman Nancy Pelosi, of California, on Wednesday night. These discussions will focus on infrastructure negotiations as well as separate efforts to get a large portion of the president’s $ 4 trillion economic agenda through the Senate without Republican votes, using a procedural mechanism known as reconciliation.
Expected attendees at the meeting include Brian Deese, director of the National Economic Council; Steve Ricchetti, a top advisor to Mr. Biden; Louisa Terrell, the director of the Legislative Office of the White House; Shalanda Young, acting director of the Office of Management and Budget, and Susan E. Rice, who heads the White House’s domestic affairs council, according to an official familiar with the plans.
Democratic leaders in Congress are preparing to get a comprehensive, multi-trillion dollar bill through the reconciliation process to avoid the need for Republican votes and spending on physical infrastructure, education, emissions reductions, childcare, paid vacations, combating efforts to approve of poverty and more. But the Senate Center Democrats – along with Mr Biden – have repeatedly said they want to reach an agreement with Republicans on a scaled-down version of the president’s plan to rebuild roads, bridges and other infrastructure projects.
The bipartisan group has not reached a public agreement on how the spending will be funded. Moderates in both parties insist that every deal is paid for with new revenue. Mr Biden has offered $ 4 trillion in potential revenue streams, all focused on increasing the tax burden on businesses and high earners. Republicans have responded with hundreds of billions of their own funds, including increased taxes for drivers and reusing previously borrowed money from the $ 1.9 trillion Covid Relief Act that Biden signed earlier this year.
The Senators who led the original framework spent much of Tuesday huddling with Mr. Deese, Mr. Ricchetti, and Ms. Terrell to work out the details of a draft that would see $ 1.2 trillion over eight years, of which $ 579 billion in new funding is, and how to fund it.
“These things are always complicated and tough,” said Ohio Republican Senator Rob Portman as he left the Capitol on Tuesday. “We’re going there. We are moving in the right direction. “
The two sides didn’t seem to have enough in common to officially announce how they would fund the plan. The five Democrats and five Republicans who shuttled around the Capitol for hour-long meetings, scheduled around votes, declined to offer any details beyond their prevailing optimism and plans to continue discussions.
“Pay-fors,” said Louisiana Senator Bill Cassidy, one of the Republicans negotiating the deal, when asked what the remaining stumbling blocks were. “Every time you bring in $ 579 billion, you have to figure out how to do it.”
Mr Biden has promised not to raise taxes on the middle class, not even at the gas pump. The Republicans in the Senate are refusing to raise tax rates for corporations and high earners. Both sides interfered in Washington, to the surprise of some business leaders and other lobbyists.
White House officials in the past few weeks have moved to urging Republicans to support one of Mr Biden’s proposals that would not lead to an increase in tax rates: a plan to spend tens of billions of dollars on increased IRS enforcement plan would raise hundreds of billions of dollars from high earners and corporations that owe their fair share of taxes but don’t pay them. Republicans say they are concerned about the scope of the provision but have continued to discuss it in private meetings.
“I would say we put a lot of different options on the table,” Ms. Psaki told reporters on Tuesday. “And our view is that there is one fundamental question right now. Are Republicans, members of Congress, do they think rich people have to pay the taxes they owe, or should we raise the cost for travelers just trying to get to work? That is the basic question here. So we’ll see if they can make progress on this point. “
Legislators were optimistic that an agreement could be reached this week, but conceded the split over the increase in revenue.
“It’s always the hard part of an infrastructure package,” said Senator Shelley Moore Capito, a Republican from West Virginia, who tried unsuccessfully to negotiate an even closer package with Mr. Biden.
“There’s a pretty good dividing line between Republicans and Democrats at times – certainly on taxes,” she added. “But the president has taken any kind of user fee off the table – where you traditionally pay for those things – that only makes it more difficult.”
Neil Bradley, the executive vice president and chief policy officer of the U.S. Chamber of Commerce, said Tuesday that he expected any final deal to include some money from Mr Biden’s plans to increase the enforcement of the IRS.
He said he expected a final deal would include some surprises. “I suspect they’ll have some creative ideas that we don’t know about,” said Bradley.
The debate on funding Mr Biden’s economic agenda will also extend to any package that lawmakers seek to push through with reconciliation, which could be as high as $ 6 trillion. Senator Bernie Sanders, the independent Vermonter who heads the Senate Budgets Committee, has asked Democrats on the panel to outline their priorities for the package as he intends to pass a draft budget to begin the process by July.
“I think the priorities that the president has set, that we have set, are solid,” Sanders said in an interview when he described his strategy. “But you know, we have to make sure that we end up with numbers that 50 members can agree on.”
He added that his intention was to use “progressive taxation” to fund new initiatives – such as childcare allowances and health care expansion – including increasing taxes on the rich and business. But he didn’t extend that to one-time expenses like repairs to roads or bridges or improving water systems, saying, “I don’t think it’s necessary to pay for one-time capital improvements to infrastructure.”
In an early reference to what Mr. Sanders called an effort to “calm the margins,” he said he was ready to relax a $ 10,000 limit on state and local tax deductions.
Several Democrats, particularly lawmakers representing New York and California, have warned that they may not endorse changes to the tax law that do not take into account this provision. A draft budget circulated by Capitol Hill staff and received by the New York Times appeared to include funding for a partial waiver of the state and local tax deduction, which could mean removing the cap for all but the highest earners or increasing the cap. There were few details about how that money would be distributed, and lawmakers and aides warned that the plan was on the move.
“I have a problem with extremely wealthy people getting the full trigger,” Sanders said. “I think this is an issue that we have to work on.”
Cecilia Kang and Luke Broadwater contributed to the coverage.