The White House is not interested in introducing user fees to pay for its $4 trillion worth of spending proposals for infrastructure and social welfare programs.
User fees, including increasing the federal gas tax or rolling out a new vehicle miles traveled fee, would “violate” President Joe Biden’s promise not to hike levies on people earning less than $400,000 a year, according to White House press secretary Jen Psaki.
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“The president’s pledge and his commitment, his line in the sand, his red line, whatever you want to call it, is that he will not raise taxes for people making less than $400,000, a year, user fees that have been proposed out there would violate that,” Psaki told reporters Friday.
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The White House is closing in on its self-imposed deadline for negotiations to “progress” regarding Biden’s $4 trillion-plus infrastructure and social welfare plans.
Republicans, led by West Virginia Sen. Shelley Moore Capito, have made a $568 billion counteroffer, covering traditional infrastructure projects, such as public transportation, water, and broadband investments. Senate Minority Leader Mitch McConnell has signaled his willingness to spend up to $800 billion on infrastructure.
At the same time, Republicans do not want to undo any of former President Donald Trump’s 2017 tax cuts. Biden’s idea to move the corporate tax rate up to at least 25% and the top marginal federal income tax rate to 39.6% would do just that. To bridge the divide, Virginia Democratic Sen. Mark Warner told Axios, “user fees have to be part of the mix.”
The White House was expecting another compromise from Republicans next week, Psaki said. She described Biden’s talks with Republicans as “a significant positive development.”
“One of the proposals he made was having the IRS play more of a role and ensuring people are paying the taxes they owe, that’s one component, but I do expect there may be components and proposals that are put forward that are discussed in these private discussions that may not cross either of those lines,” Psaki added.
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Biden’s infrastructure plan includes $621 billion for transportation and resilience improvements, and another $111 billion for water, and $100 billion for broadband. In contrast, Republicans have counteroffered that $299 billion be spent on roads and bridges, $61 billion on public transit, $20 billion on rail, $35 billion on water, and $65 billion on broadband.
