President Donald Trump and Democratic leaders enter infrastructure talks on Tuesday already at odds over how to pay for the massive investments that American voters say their communities desperately need.
Before their first White House meeting since January’s government shutdown, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer made it clear in a Monday letter to Trump that they will push for a “substantial, new and real” source of revenue to pay for infrastructure projects.
Schumer, speaking later on the Senate floor, suggested clawing back part of the GOP’s “massive mammoth tax break to big corporations and the already wealthy” to pay for an infrastructure deal.
The White House has been hesitant to define the scope of investment needed and wary of specifying a funding source or how to deploy federal dollars. Since Trump took office, his aides have favored a mix of some federal spending and seed money to encourage larger investments of state, local and private capital. Congressional Republicans have slammed the suggestion that trimming tax cuts could pay for infrastructure.
“We’re going slowly on this,” Larry Kudlow, Trump’s top economic adviser, told reporters on Monday, adding that White House officials have an open mind and want to work with Democrats on “things that both sides can agree to.”
Infrastructure is the rare public policy issue that unites voters across the ideological spectrum, as well as rival groups like the U.S. Chamber of Commerce and the AFL-CIO union federation. Yet there’s been no agreement on how to offset the as much as $2 trillion that the American Society of Civil Engineers has estimated is needed to upgrade public works. Trump has long promised that the projects would renew communities and juice the economy.
Heightened Tensions
The last time Democratic leaders met with Trump, on Jan. 9, he walked out when Pelosi said she wouldn’t appropriate taxpayer money to finance his wall on the U.S.-Mexico border. Tensions have only heightened since then, as House committees investigate almost every aspect of the Trump administration and some Democrats are calling for his impeachment after the release of Special Counsel Robert Mueller’s report on Russian election interference in 2016.
Schumer and Trump, both from New York, are also at odds over a $12.7 billion project to build a new rail tunnel under the Hudson River linking New Jersey and Manhattan, and renovate a deteriorating century-old tube. This so-called Gateway project, essential for the daily operation of a region that generates 20 percent of the U.S. gross domestic project, has been criticized by the administration for seeking too much federal funding without a firm commitment of local funds.
Pelosi told reporters earlier this month she would like at least $1 trillion -- and as much as $2 trillion -- in direct federal spending for for a nation-wide infrastructure plan. To cover the cost, some Democrats have sided with the Chamber and AFL-CIO in backing an increase in federal fuel taxes, arguing a higher tax on gasoline and diesel fuel would be the most efficient method.