Finance

Coons says bipartisan infrastructure package ‘likely’ to be smaller, not fully financed

Sen. Chris Coons (D-Del.), a close ally of President Biden, suggested Wednesday that Congress may not fully cover the costs of Biden’s $2.25 trillion infrastructure plan, and that the size of the package could come down in order to secure bipartisan support.

In an interview with Punchbowl News, Coons detailed some options and possible areas of cooperation and compromise with Republicans on the bill, such as a smaller increase to the corporate tax rate or eliminating loopholes for large, multinational corporations.

“The other option, frankly, is to not fully pay for it,” he said, noting that Congress had approved $4 trillion in deficit-financed COVID-19 relief on a bipartisan basis before Democrats approved an additional $1.9 trillion last month along party lines.

“In the choice between raising taxes significantly and simply looking at each other and saying ‘we need a robust recovery,’ I think it’s more likely we’ll have a package that is not paid for, and that is less robust but still putting hundreds of billions of dollars into infrastructure,” he continued.

Coons said that “several fairly seasoned senior Republicans” told him they were willing to support a $1 trillion infrastructure package and pay for some of it but objected to Biden’s plan to raise the corporate tax rate from 21 percent to 28 percent.

Some, he noted, were supportive of using a gas and mileage tax to pay for the plan, an idea Transportation Secretary Pete Buttigieg briefly floated before scrapping.

Coons said there were other options to pay for the whole package, but that it was just as likely that some of it would be financed through borrowing. He estimated that a rough outline for a deal clear of GOP support would be needed by Memorial Day, just seven weeks away, if Democrats were to resist the option of going it alone.

While some economists say borrowing to pay for infrastructure makes sense, especially when interest rates are low, others say the precipitous rise in the nation’s debt needs to be addressed.

This year’s deficit is already expected to surpass the $3 trillion record set last year, pushing the overall debt above 100 percent of GDP for the first time since World War II.

Coons’s comments follow Biden’s release of a more detailed tax proposal, which would raise $2.5 trillion over 15 years.

Biden, who has repeatedly said his plan was likely to change as it worked its way through Congress, said Wednesday that compromise on the bill was “inevitable.”

“We’ll be open to good ideas and good faith negotiations. But here’s what we won’t be open to. We will not be open to doing nothing. Inaction simply is not an option,” he said.

Biden campaigned on his credentials as a bipartisan dealmaker but could face pressure from his party’s progressive wing if he scales back the scope of the plan. 

Coons said that Biden was open to negotiating over the course of the next month, but would not allow obstructionism to prevent the passage of the package.

Sen. Roy Blunt (R-Mo.) said over the weekend that Republicans could support a $615 billion package that only covers traditional infrastructure such as roads, ports and bridges.

If Biden is unable to secure 10 GOP Senate votes for the plan, Democrats could pass the package using budget reconciliation, a process that can sidestep a Republican filibuster but imposes some tough limitations on the legislation.

Sen. Joe Manchin (W.Va.), a key Democratic vote, said his opening bid for covering the costs of the plan would be 100 percent, signaling some openness to deficit financing.

He also opposes raising the corporate tax rate beyond 25 percent.

Tags biden administration Chris Coons corporate tax rate Infrastructure Joe Biden Joe Manchin Pete Buttigieg Roy Blunt Senate

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