- President Joe Biden wants his infrastructure overhaul plan to win bipartisan support, but lawmakers behind the scenes are starting to draw battle lines.
- Democrats are pushing to include green initiatives, as well as tax increases to pay for the legislation.
- Republicans, meanwhile, are wary of including climate-related provisions and uncomfortable with bigger tax hikes.
President Joe Biden wants his infrastructure overhaul plan to win bipartisan support, but lawmakers behind the scenes are starting to draw battle lines around what should be in the legislation – and how to pay for it.
In recent meetings with Biden and his top aides, lawmakers from both parties suggested breaking up the bill along different lines, according to some attendees.
Democrats proposed breaking up the projects from the pay-fors: One measure would include the building proposals that both sides of the aisle seemingly would back. The other would include a set of provisions to cover the costs – including raising taxes on gas, corporations and electric vehicles – that have already attracted GOP criticism and would likely only pass along party lines.
Republicans, conversely, have suggested they could back a tax on carbon emissions – seen as a more predictable financial penalty for fossil fuel companies, unlike regulation that halts drilling and could change with each administration. Or, they could back a trust fund with diversified sources of revenue from several smaller tax changes or cost cuts.
But they made it clear that they won't sign on to a bill they see as "hijacked," in one lawmaker's words, by the administration's clean energy interests.
"If the Democrats want to run a climate bill they know is going to be much more contentious than helping to come together and rebuild our roads and bridges, that's what they need to use the reconciliation process for," Rep. Rodney Davis, R-Ill., told CNBC following a meeting at the White House.
Reconciliation is the congressional process that allows policies with an impact on spending or revenue to pass the Senate with a simple majority. It has been used for landmark and potentially legacy-defining proposals when bipartisan support has been elusive – like with the Bush and Trump tax cuts, Obamacare, and, most recently, Biden's pandemic relief plan.
Rep. Peter DeFazio, D-Ore., who chairs the House Transportation and Infrastructure Committee, said the rules governing the process would likely strip out large swaths of a bill because their impact on the federal budget is deemed unclear or immaterial.
"But the money could be raised through reconciliation – and the money will be a big hang-up," DeFazio said. But as for the projects themselves, "clearly the president wants to try bipartisan, and I'm willing to try that."
Biden isn't the only one who wants the bill to be bipartisan.
Sen. Joe Manchin, a centrist Democrat from the conservative stronghold of West Virginia who wields outsized influence over the priorities of a chamber split 50-50, said he wants Republican support for the bill, as well.
"I am not going to get on a bill that cuts [the GOP] out completely before we start trying," Manchin told Axios in an interview.
Manchin's West Virginia colleague, Sen. Shelley Moore Capito, holds the top Republican position on the committee that will author the Senate's infrastructure bill. She has recently raised concerns about hiking the corporate tax rate, criticized a tax on a vehicle's miles traveled as an alternative to a gas tax, and introduced the possibility that Democrats choose not to offset the proposal's cost with any additional revenue.
While Biden solicited revenue ideas from lawmakers, White House aides say they want to take advantage of continued low interest rates, regardless of where the national debt and deficit stand.
"The president has made clear that being fiscally responsible is a priority of his," said Bharat Ramamurti, deputy director of the White House National Economic Council. "He's also made clear that, right now, one of the best things that we can do is deficit finance these investments because that's what gets the economy moving more quickly. And in the long term, growth helps bring down the debt and deficit levels as well."
The White House has maintained a disciplined message about the state of discussions: It's still too early to talk specifics.
"We don't have a package being proposed at this point, and when we get to that point, I'm sure we will have this discussion," Psaki said recently during a daily briefing. "The president has talked in the past about different revenue raisers, whether it is rolling back certain tax cuts, but we are just not at that point in internal policy discussions."
The White House has not yet installed its top policy aides, delegating the effort to longtime Biden advisor Steve Ricchetti and Transportation Secretary Pete Buttigieg, according to people familiar with the matter. Buttigieg's undersecretary for policy, Polly Trottenberg – a former New York City transportation official – is expected to take an outsized role but has not yet been confirmed.
Installing a full slate of policy officials to tackle and implement any potential policy would take months, but lawmakers suggest that enough work has already been done on infrastructure to provide legislative blueprints before the summer. The U.S. Chamber of Commerce, in a letter signed by 300 businesses in February, set a deadline for passage by the July 4 holiday.
The end of summer might be more likely.
"The end of July before the August recess, I think that's possible," said Rep. John Garamendi, D-Calif. "I've already said the month of September is more likely."
By the end of September, Congress must pass a bill to reauthorize highway funding, which could provide a deadline for a town that rarely operates without one.
The Biden administration, meanwhile, doesn't want an opportunity to reform American infrastructure to slip away from it. "Infrastructure Week" became a punchline during the Trump administration as a bill proved elusive, even though the former president had said infrastructure was one of his biggest priorities.
Asked in an MSNBC interview when Biden's Infrastructure Week would take place, Buttigieg said, "I think it could be an infrastructure year."
-- CNBC's Stephanie Dhue contributed reporting.