Senate Democrats called on Congress Wednesday to junk President Trump’s infrastructure plan and instead pay for $1 trillion in new spending on roads and bridges by repealing much of the GOP’s tax-cut law.
Mr. Trump, in turn, said Democrats are obstructing on the issue to deny him a win in an area where he’d had high hopes for bipartisanship.
Prospects for a deal appear to be dwindling. While both sides say the country needs a massive infusion of infrastructure cash, they deeply disagree on how to come up with it.
Democrats proposed $140 billion to repair roads and bridges, $115 billion apiece to modernize the country’s water and sewer systems and improve public transportation, and $40 billion to extend high-speed internet into rural areas, among other items.
To pay for the new spending, Democrats proposed to raise the corporate income tax rate from 21 percent to 25 percent — still lower than it was before last year’s tax cuts, but much higher than Mr. Trump has said he would allow. Democrats also called for hiking the rate on top earners back to 39.6 percent, up from the new 37 percent rate, to restore the individual alternative minimum tax and the estate tax, and close the “carried interest” loophole for certain money managers.
“As we’ve said from day one, we Democrats want to work with the president and our Republican colleagues on infrastructure,” said Sen. Charles E. Schumer, New York Democrat. “But we want to do it in a real way that actually produces results — not the kind of proposal the president made, which has gone over with a big thud.”
Democrats’ plan also calls for the use of labor union-friendly “project labor agreements” for federally-funded projects and guaranteed overtime for certain employees — several items that might attract less support from Republicans.
Mr. Schumer said they want to use the infrastructure plan as a “contrast” to the GOP’s tax-cut law — which Republicans plan to feature prominently on the campaign trail — and that the Democrats’ plan will do more to create jobs.
“We’re very positive about going full steam ahead showing our plan and the contrast with what the Republicans want to do with the money,” Mr. Schumer said. “It’s a loser for them.”
Republicans rejected the tax hikes outright.
“More than 90 percent of American workers have seen more money in their take-home paychecks because of the tax relief law,” said Sen. John Barrasso, Wyoming Republican. “Now Senate Democrats want to take their hard-earned money away from them.”
Mr. Trump’s plan seeks to leverage $200 billion in new federal spending to spur $1.5 trillion in new investments — mostly from state and private interests — over 10 years.
Mr. Trump said Democrats are blocking his plan, released last month, because they want to deny him another policy win.
“They think we’ve had too many victories. We got a lot victories. We’ve had a lot,” the president said at a Latino legislative summit.
But even some Republicans have given his proposal a cool reception on Capitol Hill, saying it’s a decent start but that questions remain on how to pay for it, as conservatives are likely to reject the administration’s overtures on a potential hike in the federal gas tax.
“We have to be realistic about our needs and how we can address them in a fiscally responsible way,” said Rep. Bill Shuster, Pennsylvania Republican and chairman of the House Transportation Committee.
