U.S. senators push for infrastructure plan that avoids tax hikes

By David Morgan and Susan Cornwell

WASHINGTON (Reuters) -A bipartisan group of 10 senators is trying to craft a plan to revitalize U.S. roads and bridges without tax hikes, lawmakers said on Wednesday, though some of President Joe Biden's fellow Democrats fretted that such an approach on infrastructure legislation would fail.

Revamping America's infrastructure is a high priority for Biden, but his sweeping $1.7 trillion proposal has run into trouble in a Congress that his party only narrowly controls, making Republican support pivotal.

Republican Senator Mitt Romney told reporters that members of the group have reached "tentative conclusions" on their plan but did not provide details. The proposal is expected to total nearly $900 billion.

"We're not raising taxes," Romney told reporters. "We're going to be talking to other members to see if we can get enough support for this to have the necessary votes to be successful."

A Democratic member of the group, Senator Jon Tester, said he would be willing to look at funding an infrastructure plan without raising taxes though he was not committed to that approach.

"I would consider it, sure," Tester said. "I think there's plenty of pots of money out there - hopefully they're not all smoke and mirrors."

The bipartisan group also includes Republicans Rob Portman, Bill Cassidy, Susan Collins and Lisa Murkowski, and Democrats Kyrsten Sinema, Joe Manchin, Mark Warner and Jeanne Shaheen.

Some liberal Democrats have become frustrated https://www.reuters.com/world/us/liberal-democrats-restless-over-bidens-infrastructure-talks-with-republicans-2021-06-04 by the long-running talks, and have worried that this will lead to a smaller deal that does not include party priorities, including funding for schools and home healthcare.

'STAND-FOR-NOTHING MINIMALIST'

Senate Banking Committee Chairman Sherrod Brown sounded pessimistic about the chances for bipartisan success, saying an infrastructure plan without tax hikes on corporations and the wealthy to help pay for it would have little credence with his fellow Democrats.

"There aren't 10 Republicans who are even willing to talk to us about compromise," Brown said. "And if they get exactly 10 Republicans, you'd probably lose some Democrats if it's too squish, middle-of-the-road, stand-for-nothing minimalist."

Cassidy, who spoke to Biden about infrastructure by phone on Tuesday, predicted that any plan containing tax hikes would not receive enough Republican support to pass the Senate.

The Senate is divided 50-50, with Democrats in control because Vice President Kamala Harris can cast a tie-breaking vote. Sixty votes are needed in the 100-seat chamber to advance most legislation.

Biden has proposed raising taxes on U.S. corporations to help fund a sweeping package that would address physical infrastructure projects, as well as climate change and social programs. Republicans have shown no appetite for tax increases, having strongly backed a 2017 tax cut law signed by former President Donald Trump.

Portman said the group is looking at funding mechanisms for their proposal that could face Democratic resistance, including unspecified user fees and tapping into funds for COVID-19 pandemic-related unemployment payments to individuals that some states have returned to the U.S. Treasury.

"I think the White House is interested in talking with us about appropriate ways to look at some COVID funding that's being sent back," said Portman, adding that lawmakers have also considered an infrastructure bank to fund projects.

Biden broke off talks on Tuesday with Senator Shelley Moore Capito, who had headed a six-member Republican team, including party leaders and top members of relevant Senate committees.

Capito had offered Biden $330 billion in new infrastructure spending, far short of what he has sought.

Cassidy said the bipartisan nature of his group could make a difference.

"That softens the White House line, potentially," Cassidy told an online forum. "It may allow Republicans to be a little bit more giving."

Separately, a bipartisan group of 58 House lawmakers led by Representatives Josh Gottheimer and Brian Fitzpatrick known as the Problem Solvers Caucus released a $1.2 trillion infrastructure framework. The caucus has been working with the bipartisan group of senators, a source familiar with the negotiations said. The proposal does not include details on how it will be paid for.

(Reporting by David Morgan and Susan Cornwell; additional reporting by Makini Brice; Editing by Scott Malone, Will Dunham and Andrea Ricci)