Republicans Release $568 Billion Infrastructure Proposal

Senate Republicans released their infrastructure counterproposal on April 22. The $568 billion package focuses on a narrower definition of infrastructure than reflected in President Biden’s American Jobs Plan, with the Republicans proposing nearly $300 billion on roads and bridges, $44 billion for airports, and another $66 billion for public transit systems. The total price of the package is about a quarter of the price tag of Biden’s, which is estimated to cost about $2.3 trillion and includes funding for many other areas, including elder care, buildings and housing, the electric grid, electric vehicles, water infrastructure, and broadband, which are not mentioned in the Republican proposal. Details of the Republican proposal can be found here.

Senate Democrats immediately panned the proposal as too small, with Senate Finance Committee Chairman Ron Wyden (D-OR) calling the proposal "light years out of the ballpark in terms of being able to get a bipartisan compromise." There is also a gulf between Democrats and Republicans in terms of how the infrastructure will be paid for. The Republican proposal does not lay out specific funding mechanisms and does not include an increase to income or capital gains taxes. By contrast, President Biden is calling for an increase of the corporate tax rate to 28%, though reports this week indicate that Senate Democrats are coalescing around an increase to 25%. President Biden also plans to announce a new tax proposal in the coming days that would raise the top marginal income tax rate to 39.6% and the capital gains rate to 43.4%. Though that proposal will likely be separate from the current infrastructure package negotiations, it highlights the distance between the two parties in terms of taxes and may harden GOP opposition to any new tax increases.

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