Show an ad over header. AMP

I am the FIRST

Republicans eye deficit spending for infrastructure

Some Senate Republicans might agree to add to the national debt to pay for a scaled-back infrastructure plan, senators and aides told Axios — one more grasp at a deal with President Biden before Democrats pack up and go it alone.

Why it matters: Skipping over the thorny question of how to offset up to $1 trillion in new projects could actually be politically and philosophically easier for GOP lawmakers than agreeing on tax increases.


What they're saying: Deficit spending "could be part of the discussion," Sen. Lisa Murkowski (R-Alaska) told Axios. "It would be for what we would consider to be the hard infrastructure: the roads, bridges, the ports...is it something that is on the table? I think that's probably accurate to say."

  • Sen. Josh Hawley (R-Mo) said, "My strong preference would be for it to be paid for. But you know, if they have another proposal, I won't dismiss it out of hand."

Driving the news: The White House has indicated that Biden will make a decision by Memorial Day on whether to continue negotiating with Republicans or jump to the partisan track and try and pass a package with only Democratic votes.

The big picture: There are two Senate efforts to reach common ground with Biden on a bipartisan infrastructure package, which could climb as high as $1 trillion but well short of the $2.3 trillion he initially proposed for both hard and "human" infrastructure.

  • The first, led by Sen. Shelley Moore Capito (R-W. Va.), is mostly focused on the size and scope of a potential package. Her group has exchanged offers and counteroffers with the White House on what qualifies as infrastructure.
  • On Tuesday, a second bipartisan group led by Sens. Mitt Romney (R-Utah), Rob Portman (R-Ohio) and Kyrsten Sinema (D-Ariz.) emerged to say they're focusing on paying for any compromise.
  • "The real question is how will it be paid for because the Republicans have ruled out an amendment to the 2017 tax bill," said Sen. Angus King (I-Maine). "And they've ruled out filling the tax gap by making high-income people pay their pay their taxes."

The other side: Some Democrats are reluctant to open the door to deficit spending on a bipartisan bill, convinced that corporations and wealthy Americans need to pay higher taxes. They assume Republicans who sign on would demand to shrink the overall price tag and allow corporations to keep their tax rate at 21%.

  • "We will ultimately have the tool of budget reconciliation in front of us," said Sen. Tammy Baldwin (D-Wisc.) "We don't have to do deficit spending."

Between the lines: While some Republicans, like Sen. Susan Collins (R-Maine) are open to finding additional revenue from unpaid taxes, most are skeptical that the Internal Revenue Service can raise $700 billion as Biden claims.

  • Republicans also insist there are billions of unspent funds from the $1.9 trillion COVID relief bill. And they're focused on additional user fees through indexing the gas tax to inflation and levying a fee on miles traveled for electric vehicles.
  • But both those options are non-starters for the White House and Senate Democrats. "I've zoomed with a lot of Republican county commissioners and not a single one said 'we don't need the money,'" said Sen. Bob Casey (D-Pa.)

Be smart: Republican willingness to use deficit financing for infrastructure will be tested on the U.S. Innovation and Competition Act, which could cost $200 billion, including $52 billion for domestic semiconductor manufacturing.

  • "If you want to see who the fiscal conservatives are now, see what they do on the Endless Frontier Act," said Sen. John Kennedy (R-La.), using the original name for that legislation. "There's no question that we've got some Republicans that don't mind deficit spending."

Why the startup world needs to ditch "unicorns" for "dragons"

When Aileen Lee originally coined the term "unicorn" in late 2013, she was describing the 39 "U.S.-based software companies started since 2003 and valued at over $1 billion by public or private market investors."

Flashback: It got redefined in early 2015 by yours truly and Erin Griffith, in a cover story for Fortune, as any privately-held startup valued at $1 billion or more. At the time, we counted 80 of them.

Keep reading... Show less

Scoop: Facebook's new moves to lower News Feed's political volume

Facebook plans to announce that it will de-emphasize political posts and current events content in the News Feed based on negative user feedback, Axios has learned. It also plans to expand tests to limit the amount of political content that people see in their News Feeds to more countries outside of the U.S.

Why it matters: The changes could reduce traffic to some news publishers, particularly companies that post a lot of political content.

Keep reading... Show less

Scoop: Amazon quietly getting into live audio business

Amazon is investing heavily in a new live audio feature that's similar to other live audio offerings like Clubhouse, Twitter Spaces and Spotify's new live audio platform, sources tell Axios.

Why it matters: As with Amazon's efforts in podcasting and music subscriptions, the company sees live audio as a way to bolster the types of content it can offer through its voice assistant, Alexa, and its smart speaker products.

Keep reading... Show less

Hurricane Ida exposes America's precarious energy infrastructure

The powerful hurricane that plunged New Orleans into darkness for what could be weeks is the latest sign that U.S. power systems are not ready for a warmer, more volatile world.

The big picture: “Our current infrastructure is not adequate when it comes to these kinds of weather extremes,” Joshua Rhodes, a University of Texas energy expert, tells Axios.

Keep reading... Show less

"We must go further": 70% of adults in European Union are fully vaccinated

About 70% of adults in the European Union are fully vaccinated against COVID-19, Ursula von der Leyen, the president of the European Commission, said Tuesday.

Why it matters: The milestone makes the E.U. one of the world's leaders in inoculations, after an initially lagging vaccine campaign, the New York Times notes.

Keep reading... Show less

What Elizabeth Holmes jurors will be asked ahead of fraud trial

Jury selection begins today in USA v. Elizabeth Holmes, with the actual jury trial to get underway on Sept. 8.

Why it matters: Theranos was the biggest fraud in Silicon Valley history, putting both hundreds of millions of dollars and thousands of patients' health at risk.

Keep reading... Show less

Insights

mail-copy

Get Goodhumans in your inbox

Most Read

More Stories