Biden officials open to debate on how $2tn infrastructure plan is funded

Top Biden administration officials said they saw room for a deal on corporate taxes to pay for the president’s $2tn infrastructure plan, as they pushed Congress to make progress on the package by the end of next month.

“I think we’re going to find a really good, strong deal space on this,” Pete Buttigieg, the transportation secretary, told ABC on Sunday.

“We know that this is entering a legislative process where we’re going to be hearing from both sides of the aisle, and I think you’ll find the president’s got a very open mind.”

Last week on a visit to Pittsburgh, Joe Biden unveiled his next multitrillion-dollar economic proposal after securing passage of his $1.9tn fiscal stimulus package last month.

The investment plan proposed by the White House would plough more than $2tn of government funding into traditional infrastructure such as roads and bridges. But it also includes large manufacturing subsidies, and seeks to address climate change with plans to upgrade homes and other buildings and facilitate the use of electric vehicles.

Its most politically controversial element, however, is that it is funded by an increase in the corporate income tax from 21 per cent to 28 per cent, and changes to international tax provisions that make it easier for multinationals to lower their tax bills.

Republicans have immediately vowed to oppose the plan, and some Democrats, particularly from the moderate wing of the party, may look to water down the corporate tax proposal in the coming weeks. The Biden administration is vowing to be flexible on the details.

“If people think that this is too aggressive, then we’d like to hear what their plans are. It’s something we want to have a conversation about,” Brian Deese, director of the National Economic Council at the White House, told Fox News Sunday.

“But this is a responsible way to pay for significant capital investment which itself will return multiples in terms of the private investment it will unlock.”

Although the negotiations on Capitol Hill over the infrastructure plan are expected to be more complicated and lengthy than they were for the recently passed stimulus plan, Democrats and the White House are counting on the popularity of infrastructure investments to create political momentum for the plan.

While Biden has vowed to hold talks with Republicans over the package, he has suggested he was prepared to pass it with Democratic votes alone, despite thin majorities in both houses of Congress.

“The president is hoping for major progress from Congress before Memorial day [at the end of May]. And we can’t allow this thing to just keep dragging on, because the need is there today,” Buttigieg said.

Republicans are urging the White House to drop the corporate tax increase, which would unwind part of Donald Trump’s tax cuts that they supported. They also want to narrow the scope of the plan to bricks-and-mortar infrastructure, financed via public-private partnerships and user fees.

“It would be an easy victory if we go back and look at roads and bridges and ports and airports and maybe even underground water systems and broadband. You’d still be talking about less than 30 per cent of this entire package and it’s an easily do-able 30 per cent,” Roy Blunt, the Republican senator from Missouri, told Fox News Sunday.

Even as the White House tries to persuade Congress to pass its infrastructure plan, its top officials have said they are planning this month to present yet another big federal investment package, likely to be worth more than $1tn, focused on education and child care — and financed by tax increases on the wealthy.