Bipartisan infrastructure deal stalls as bigger plan gains
Biden has proposed raising taxes on corporations and wealthy Americans earning more than $400,000 a year, which would cover not only the nearly $1 trillion proposal, but also the broader Democratic plan that is now swelling beyond $3.5 trillion.
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A $1 trillion bipartisan infrastructure deal senators struck with President Joe Biden is at risk of stalling out as Republicans mount stiff resistance over ways to pay for it and momentum shifts to a more robust Democratic proposal that could come into focus as soon as Jul. 13.
Biden’s big infrastructure proposals are moving on parallel tracks in Congress in a race against time and political headwinds to make a once-in-a-generation investment in the nation. Senators from both groups are huddling privately again on Jul. 13 to shore up their proposals. But opposition to the smaller bipartisan package is emerging from business leaders, outside activists and GOP senators, potentially denying it the support that’s needed for passage.
“I’m going to take this day by day and participate in the process and see where we end up,” said Sen. Jerry Moran, R-Kan., who was part of the bipartisan group of 21 senators but is not fully committed to the plan.
Paying for the new infrastructure was always going to be a challenge, which is partly why public works investments have lagged over time. Biden has proposed raising taxes on corporations and wealthy Americans earning more than $400,000 a year, which would cover not only the nearly $1 trillion proposal, but also the broader Democratic plan that is now swelling beyond $3.5 trillion. Republicans reject that approach.
Instead, the bipartisan group of senators is racing to salvage its plan, straining to come up with other revenue streams to fund the $1 trillion package, which includes about $579 billion in new spending beyond regular expenditures.
One proposal to go after taxpayers who skip out on income taxes initially had potential bipartisan appeal, but now is being lambasted by the outside groups as a way to enable the IRS to snoop around Americans’ personal finances. It would boost the IRS by $40 billion to bolster staff to audit tax returns, unleashing as much as a $100 billion net increase in revenues to federal coffers.
The core negotiating group, made up of five Democratic and five Republican senators, says money could come from $125 billion in COVID-19 relief funds approved in 2020 but not yet spent, as well as untapped unemployment insurance funds, among a hodgepodge of other sources.
As the bipartisan group struggles to devise consensus over revenue streams, it’s becoming increasingly clear that their proposal might not be fully paid for at all — opening it to another attack from senators who may withhold their votes over deficit concerns.