WASHINGTON ― After the GOP’s stunning defeat on health care, and the turmoil it unleashed among lawmakers this week, Democrats find themselves with more leverage than ever over an unpopular president in dire need of a legislative victory.
As Donald Trump shifts his attention from Obamacare to tax reform and infrastructure, two issues with the potential for bipartisan compromise, Democrats reiterated this week that they are willing to make a deal. But only, they said, if the Trump infrastructure proposal includes real federal spending needed to overhaul the nation’s crumbling roads, bridges, and waterways.
“If it’s an infrastructure bill disguised as a tax bill, it’s not going to go,” House Minority Leader Nancy Pelosi (D-Calif.) told reporters at a roundtable on Tuesday. ”That is to say, ‘You, Mr. Big Bucks, we’re gonna give you tax breaks to build something, which you would then own. Then you’re going to charge tolls, so the taxpayer is paying twice and you’re making a profit.’ That is not going to fly.”
Trump has yet to unveil his promised infrastructure initiative. Elaine Chao, his secretary of transportation, said Wednesday that it would consist of “a strategic, targeted program of investment valued at $1 trillion over 10 years.” The plan, which Chao said would be released sometime later this year, would include investment for “energy, water and potentially broadband and veterans hospitals as well.”
Chao did not, however, offer any details about how much federal funding the Trump administration would include in its infrastructure package (versus simply tax incentives), nor any details as to how the measure would be paid for. During her confirmation hearing earlier this year, Chao acknowledged the difficulty of securing new revenue streams and indicated her support for including tax breaks to private-sector investors who invest in infrastructure projects.
Most Democrats, however, are skeptical that funding vehicles of this sort, known as public-private partnerships, will be enough. In interviews with The Huffington Post on Thursday, several Senate Democrats said they would be willing to work with Trump if his plan includes real federal spending.
“My understanding is it’s going to be tax breaks for equity investments in infrastructure,” Sen. Mark Warner (D-Va.) said of Trump’s plan. “The problem is not equity. There’s plenty of equity for anyone who wants to invest in infrastructure... but you’ve gotta have some of the revenue for some of these projects to pay back.”
“I don’t know anybody in the infrastructure business that thinks that tax advantage for equity and public-private partnership deals are what’s going to fix the problem,” Warner added.
Sen. Bill Nelson (D-Fla.), one of several senators who attended a meeting at the White House on Thursday, said he was for “all of the above.” But he warned that public-private partnerships alone “will not solve the problem of the infrastructure debilitation that we have in the country.”
Nelson said he spoke with Vice President Mike Pence and other White House staff about putting together a bipartisan infrastructure bill. The response he received from them was “very good,” Nelson said.
Sen. Dianne Feinstein (D-Calif.) said Trump’s infrastructure package “would have to be big enough to make a dent, and it would have to have a mechanism for financing.”
Sen. Ben Cardin (D-Md.) also said that he “would like to see it as large as possible.”
Trump this week suggested that his administration supports some amount of direct federal spending, telling The New York Times Magazine his administration was “going to prime the pump” to get the economy going. But his preliminary budget, which the White House released earlier this month, delivered the opposite message. It proposed a 13 percent reduction to the budget of the Department of Transportation, including slashing funds to the successful “TIGER” grant program, which has been used to fund highway, rail, and transit projects.
It is difficult to see how a large federal spending package would make it to the president’s desk. Senate Majority Leader Mitch McConnell (R-Ky.), Chao’s husband, has warned against trying to pass a “trillion-dollar stimulus” through a Republican-controlled Congress. A small group of conservatives in the House known as the Freedom Caucus has already flexed its muscles by helping derail legislation that would have repealed and replaced the Affordable Care Act.
The Trump administration is reportedly looking at moving legislation concerning tax reform and infrastructure simultaneously, using the promise of infrastructure spending to win over Democratic votes in order to pass tax reform. It is unclear, however, whether such a strategy could succeed, given the disagreement between Democrats and Republicans over how to fund infrastructure projects.
Pelosi said Trump ought to drop his bungled efforts to repeal Obamacare and focus instead on legislation that would create jobs.
“I would forget all this stuff and just go for a big jobs bill,” she said. “Because he has nothing to offer. Two months-plus into his presidency ― you don’t need me to go into all the things we accomplished under President Obama by now. But where’s his jobs bill? Where’s his infrastructure bill?”
Jennifer Bendery contributed reporting.