US infrastructure investment was under discussion for a second consecutive day on Tuesday, with Senate Democrats proposing a $1 trillion investment in projects over the coming 10 years.
Their plan would establish a $200 billion ‘vital infrastructure fund’, but it is unclear how this would be financed.
It follows a meeting between President Donald Trump and lawmakers on Monday, in which infrastructure was discussed. At the meeting, the Washington Post reports, Texan Senator John Cornyn said “infrastructure needs to be paid for because we've got $20 trillion in debt”.
A proposal by two of Trump's financial advisors circulated just after the election calls for using $137 billion in tax credits to generate $1 trillion in private investment in infrastructure projects over 10 years.
Since then, House Speaker Paul Ryan said for every one dollar of federal money, there will be $40 of private sector spending.
“We want to leverage as much private-sector dollars as possible to maximise the fixing of our infrastructure,” Ryan told PBS’s Charlie Rose last week.
He added that although the cost of Trump’s proposal is “eye-popping,” the figure is only the overall investment level, not the cost of the legislation.
“That's not a trillion dollars coming from federal taxpayers into the transportation system,” Ryan said. “That is the total amount we're shooting for.”
But tax credits would still need to be fully paid for, Ryan said. Trump claims his plan would be revenue neutral thanks to taxes from new jobs and contractor profits, but economists are dubious. And any direct spending in the plan – around $3.5 billion under Ryan’s proposal – would need an offset to pass the Republican-led Congress.
“Now we have to go about figuring out how to, in a fiscally responsible way, get that going,” Ryan said. “We have to cut spending elsewhere to pay for infrastructure.”