Biden to unveil massive infrastructure plan, with proposed tax hikes to pay for it

The total price tag was expected to include more than $2 trillion in spending, focused on infrastructure priorities like transportation, water, broadband and innovative technologies, according to people familiar with a Tuesday briefing for top senators on congressional committees who will be involved in crafting the package.

Later next month, Biden planned to unveil a second portion of his sweeping proposals that would focus on other domestic priorities, centering on “creating economic security for the middle class through investments in childcare, health care, education and other areas,” White House press secretary Jen Psaki said Monday.

That part, according to the people familiar with the senators’ briefing, could total more than $1 trillion in spending.

Biden will detail the first part during a speech in industry- and union-centric Pittsburgh, according to the White House; he launched his campaign there in 2019 by promising to rebuild “the backbone of America, the middle class.”

The White House said it will include investments not only in domestic manufacturing and research and development, but in broadband access and child- and elder-care, creating millions of “good paying, clean energy jobs, union jobs.”

The plan includes offsets for all the new spending, officials said.

Axios reported Wednesday that Biden wanted to raise the corporate tax rate from 21% to 28% and bump up the top individual tax rate for people making over $400,000 from 37% to 39.6%, a return to the level before the 2017 GOP rewrite of the tax code. Axios also reported that he aimed to tax capital gains as normal income and impose a minimum tax on profits companies make from foreign subsidiaries.

While those tax changes track with ideas Biden pitched on the campaign trail, White House officials have so far declined to confirm specifics — or a total price tag.

Psaki said Monday the plan would be fully paid for dollar for dollar, across the board, but on Tuesday she added the qualification that it would be paid for “over time.”

She also said Biden did want to target corporations with tax changes.

“He believes there’s more to be done that can make the corporate tax code fair, to reward work not wealth,” Psaki said.

Biden himself said in an interview with ABC News’ George Stephanopoulos earlier this month that “anybody making more than $400,000 will see a small to a significant tax increase.”

“If you make more than — less than $400,000, you won’t see a fed — one single penny in additional federal tax,” he added.

The White House has not provided many details about what particular infrastructure improvements would be included in Biden’s plan, although Psaki said Tuesday it would include “modernizing roads, our railways, our bridges” — with “shovel-ready projects” — as well as expanding access to broadband.

“That’s part of his vision for investing in industries of the future,” Psaki said.

According to The Washington Post, the proposal Biden’s advisers prepared for him last week was expected to include hundreds of billions of dollars for roads, railways, bridges and waterways; money for school buildings and safety improvements; and hundreds of billions of dollars to fight climate change, pay for green transit, and build more electric vehicle charging stations.

When he was president-elect, Biden laid out what he called “a two-step plan of rescue and recovery” — the first, his COVID relief proposal, a version of which became law this month, and the second, what he called his “Build Back Better” plan.

That plan, the then-president-elect said in January, “will make historic investments in infrastructure and manufacturing, innovation, research and development, and clean energy. Investments in the caregiving economy and in skills and training needed by our workers to compete and win the global economy of the future.”

Biden has prioritized the major spending plan, the first half of his package, as he seizes on any early momentum he still has after pushing a $1.9 trillion COVID-19 relief package through Congress.

But with such a razor-thin Democratic majority in the House of Representatives — he can only afford to lose eight Democratic votes — and an evenly split Senate, it remained to be seen whether the infrastructure package could pass through Congress.

While improving airports and roads typically find bipartisan support, the Biden administration’s plans to fund improvements through tax increases could turn off most, if not all, Republicans, and potentially even some Democrats. The coronavirus relief package was popular among Americans, including Republicans, but it did not garner a single Republican vote in Congress.

As it did with the relief package, also known as the American Rescue Plan, the White House has similarly leaned in to popular support for infrastructure improvements — a sign it is prepared to use, and try to shape, public opinion as a cudgel to bring members of Congress on board.

Another threat came this week from several New York-area House Democrats who want to see Biden lift the cap on the deduction for state-and-local taxes, known as SALT, imposed by a law then-President Donald Trump signed into law in 2017.

Doing so would benefit suburban homeowners, although some progressive Democrats could balk at the notion of a tax change that would benefit relatively wealthier Americans.

“If SALT is not included, I’m not voting for any changes to the tax code,” Rep. Tom Suozzi, a Democrat representing parts of Long Island and Queens in New York, told ABC News. “We all put our different interests about different issues on the back burner for the American Rescue Plan because it was so important that we all come together on it.”

“I think there are people all over the country that will take a similar position,” he added.

On Tuesday, Suozzi issued a statement with two other Democrats, Reps. Bill Pascrell and Josh Gottheimer of New Jersey, opposing any deal that does not reverse the cap on the SALT deduction. “We say, ‘No SALT, no deal,'” they said.

Rep. Pramila Jayapal, D-Wash., the chair of the Congressional Progressive Caucus, told reporters on Tuesday that the group would not take a position on lifting the cap, but added, “I’m not sure that our members will see it as some of the fundamental reforms to the tax system that would make the system more fair.”

The White House has indicated that Biden would be willing to negotiate on potential new taxes that are sure to be unpalatable to Republicans and Democrats alike on Capitol Hill.

“The president has a plan to fix our infrastructure and a plan to pay for it,” Psaki said Monday. “But we are also open to having that discussion, and we certainly expect to have the discussion with members of Congress, as we move forward, about areas where they agree, where they disagree, where they would like to see greater emphasis or not.”

Biden has said he wants to attempt to pass a major infrastructure package as his second priority — before legislation on immigration or gun reform, for example — because he thinks the current, divisive political climate may be more tolerant of a spending plan could help the United States “compete and create significant numbers of really good-paying jobs.”

“It’s a matter of timing,” Biden told reporters last week.

But if Republican support does not materialize this time either, Senate Majority Leader Chuck Schumer’s office this week hinted at the possibility Democrats in that chamber could try to push through the president’s proposals through a budgetary process known as “reconciliation” — the same way they passed Biden’s COVID-19 relief bill.

That process would allow for a simple majority — including Vice President Kamala Harris’s tie-breaking vote — to pass Biden’s bills, unlike the 60 votes normally needed.

But that step would require the support of all 50 Senate Democrats — far from guaranteed after centrists have expressed a desire for prioritizing bipartisanship this time around.

Biden could also face competing pressures inside his party on the overall size of the package, with Jayapal and other progressives encouraging the White House to think bigger than the multi-trillion-dollar proposal Biden is expected to unveil.

“The Biden proposal on the campaign trail was significantly larger than what’s been discussed so far,” Jayapal said. “We really think there’s ample room to get the overall number up to [$11 trillion over the next ten years.”

ABC News’ Allison Pecorin, Molly Nagle and Mary Bruce contributed to this report.

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