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Senate Republicans really don’t want to raise taxes to pay for an infrastructure plan

“$2 trillion is just, that’s off the charts.”

Sen. Ron Johnson (R-WI) talks to reporters following a Republican caucus meeting in the US Capitol. 
Sen. Ron Johnson (R-WI) talks to reporters following a Republican caucus meeting in the US Capitol on July 27, 2017, in Washington, DC. 
Chip Somodevilla/Getty Images
Li Zhou is a politics reporter at Vox, where she covers Congress and elections. Previously, she was a tech policy reporter at Politico and an editorial fellow at the Atlantic.

Senate Republicans aren’t exactly pleased with the deal that Donald Trump is trying to make on infrastructure. Their concern? The $2 trillion price tag is just too high — even if a similar figure was nothing to blink at when it came to tax cuts.

“$2 trillion is just, that’s off the charts. I don’t see that happening at all,” said Sen. Ron Johnson (R-WI).

“The question is, really, where do you find the money?” added Sen. Rand Paul (R-KY).

Republican lawmakers, of course, are not the only ones worried about how to pay for this proposal, a sticking point that’s long been the downfall of any infrastructure plan. Trump and Democratic leaders, too, did not discuss how to pay for it as part of a meeting they had a few weeks ago.

And dissent on this front is already brewing: While Democrats have said they’re interested in undoing a corporate tax cut in order to cover this expenditure, Republicans aren’t particularly keen to do so.

Interestingly enough, however, Republicans only seem concerned with cost when it comes to certain policy proposals. Many didn’t have the same outcry, for example, when the Congressional Budget Office estimated in April 2018 that the 2017 tax cuts would ultimately add $1.9 trillion to the debt over the course of a decade. (The CBO went on to update this calculation slightly in 2019, concluding that “the tax cut would increase the projected deficit by more than $1.8 trillion through 2028,” according to a Washington Post report.)

When confronted with the tax cuts’ effect on the deficit last year, Republicans scoffed at the figure, arguing that the economy would grow enough to offset losses in tax revenue. And when asked about the comparison between the cost of tax cuts and the infrastructure plan this week, several returned to this old talking point. (As of 2018, this argument does not appear to have been borne out, though several Republicans argued that the benefits will take longer to accrue.)

We spoke with seven US senators about their takes on paying for the infrastructure plan. Here’s what they had to say.

Sen. John Kennedy (R-LA): “I’m not open to borrowing more money and I’m not open to raising taxes”

Li Zhou

I was wondering what payment mechanisms you’d be open to for a potential infrastructure plan?

John Kennedy

I’m not open to borrowing more money and I’m not open to raising taxes. If you’re asking me how I’m going to vote if I’m presented with a bill that would spend $2 trillion on infrastructure, and fund it with either or both tax increases, and borrowed money, the short answer to how I’m going to vote is, “No.” The long answer is, “Hell no.”

Li Zhou

Given the cost that GOP tax cuts are also expected to put on the economy, do you see that cost being comparable to the cost that infrastructure would have?

John Kennedy

You’re not talking about net cost. In terms of net cost, with the economic growth, the tax cuts are going to pay for themselves. Now, they’re not going to pay for themselves in the first year, just like you don’t build equity in your home in the first year, it takes a while. But the economy is now growing at about 3, 3.2 percent, 3.6 [percent] unemployment.

The most encouraging thing to me is productivity is growing again, thank god. I can remember when President Obama was president, you know, if we had GDP growth above 1 percent, everybody wanted to have a toga party. We’re back to normal, 3 percent is normal for the greatest economy in all of human history.

Sen. Marsha Blackburn (R-TN): “If you can’t find $5 billion to secure the border, how do you find $2 trillion to pay for infrastructure?”

Li Zhou

I was interested to get your thoughts on the $2 trillion infrastructure proposal that Trump and Democratic leaders have floated.

Marsha Blackburn

We haven’t seen any specifics and, as with everything, it’s how do you pay for something, where’s the money going to come from. If you can’t find $5 billion to secure the border, how do you find $2 trillion to pay for an infrastructure package?

Li Zhou

Are there payment mechanisms that you think would be an interesting approach?

Marsha Blackburn

We haven’t seen their proposal, so we’ll wait and see what they bring forward.

Li Zhou

I know that tax cuts that the Republicans implemented were also estimated to cost the economy —

Marsha Blackburn

Tax cuts are working.

Sen. Rand Paul: “We could stop spending the $50 billion a year we spend in Afghanistan doing nation-building.”

Li Zhou

What do you make of the infrastructure proposal that President Trump has discussed with the Democrats?

Rand Paul

I guess I really haven’t heard any details of a proposal, other than they want to spend $2 trillion. The question is, really, where do you find the money? Currently, we spend about a trillion dollars more than we bring in, with the budget that we’re in charge of. So it’s kind of hard to imagine where you find $2 trillion when you’re already a trillion dollars short for day-to-day spending.

There are areas where we could find money. One of the things that I’ve talked to the president about is we could stop spending the $50 billion a year we spend in Afghanistan doing nation-building and that would be money that could be spent here on infrastructure.

And I’ve proposed that for several years now, that we declare victory, end the war in Afghanistan and begin spending some of that money here at home.

Li Zhou

Do you see the cost for the infrastructure plan being comparable with the long-term costs of the tax cut?

Rand Paul

I don’t know how you come up with the cost, but really, you have to come up with how you pay for it. There’s not $2 trillion in the budget to spend on roads, there’s a possibility of having and encouraging private entities to build roads, but they would want to place a fee on using the roads.

Li Zhou

Do you think this investment is necessary for economic growth and worthwhile?

Rand Paul

I don’t think it creates any more economic growth than any other job does. If you don’t spend it on roads, you spend it somewhere else. The problem is we do have to fix the roads, the roads are full of potholes and somebody’s got to fix the roads, but you have to find the money. The money doesn’t exist under current revenue.

Sen. Mike Crapo (R-ID): “I’m very interested in seeing some of the proposals for public-private partnerships.”

Li Zhou

What do you see as the difference of the cost that the tax cuts are putting on the economy with paying $2 trillion on an infrastructure plan?

Mike Crapo

Well, the CBO score was wrong on the tax bill and the economic performance since then has proven that. The tax bill did not only not cost money, it generated revenue for the Treasury. But, nevertheless, that question is distinct from the question of the cost of an infrastructure plan. The infrastructure plan will be spending and we need to find the revenue sources for it.

Li Zhou

Well, what do you make of the increase in deficit in 2018 that was attributed to the tax plan?

Mike Crapo

Well, it was wrongly attributed to the tax plan. The tax plan actually generated revenue, more than would have been generated without it, again because of the bad estimates that were made. The economy grew by almost 50 percent more than was projected as a result of the tax bill, so the tax plan did not cause that level of deficit. That level of deficit was caused by the previous overspending in Congress and by the increasing debt-financing cost of the previous deficit.

Li Zhou

Are there payment mechanisms you would be on board with for infrastructure?

Mike Crapo

I’m very interested in seeing some of the proposals for public-private partnerships. And the notion that — I’m not supportive yet, I’d have to see the details — but bonding some of the construction that’s necessary and those kinds of things.

Li Zhou

So not rolling back the corporate tax cuts?

Mike Crapo

Like I said, that’s generating revenue. That would hurt our ability to finance infrastructure.

Sen. Lamar Alexander (R-TN): “It would depend on what the proposal is.”

Li Zhou

I was wondering what you make of the infrastructure proposal that the president is currently working with Democrats on?

Lamar Alexander

Well, I’m glad he’s interested in it. And I think the major question is how do we pay for it.

Li Zhou

Are there particular payment mechanisms you would support?

Lamar Alexander

It would depend on what the proposal is.

Sen. Ron Johnson (R-WI): “Increasing taxes on anything is not the right thing to do.”

Li Zhou

Just curious what your first reactions are to the infrastructure proposal that President Trump has discussed with the Democrats.

Ron Johnson

The massive cost and the massive deficit spending, how are you going to pay for it without damaging economic growth, which is the No. 1 component of the solution. We have to continue to grow our economy. Increasing taxes on anything is not the right thing to do.

If the president was proposing something in terms of a public-public, public-private cost-sharing structure, I think that’s the right direction, no matter what we do.

But $2 trillion is just, that’s off the charts. I don’t see that happening at all.

Li Zhou

Do you see infrastructure investment as the same kind of investment that the tax cuts were, in the sense that they both have a similar cost?

Ron Johnson

We’ll see, but I really don’t think in the end that tax cuts end up costing the federal government revenue, and it does grow the economy. We’ve seen it grow wages, and you’ve seen all the benefits to economic growth, which lays out a foundation for future years as well.

It’s completely different. Yes, you have a static score, but I feel reasonably confident that that will be more than made up for in terms of increased revenue, and just having that economic growth is good for Americans and gives us the money we need. Infrastructure spending is different than other spending in terms that you’re buying a capital good, if you actually do that.

That’s why you need the public-public and the public-private partnerships to ensure the most efficient, most effective allocation of that limited capital. The problem is, $800 billion stimulus under Obama got spent, boom, it’s gone. $800 billion just added to our deficit without long-term, lasting effect.

Li Zhou

What do you make of the additions to the deficit in the wake of the tax cuts in 2018?

Ron Johnson

I don’t believe there will be long term ... Again, that’s what I’m trying to explain. As the economy grows, because of the stimulating effect of the tax cut. ... That economic growth not only puts more revenue in the federal government coffers to pay for that static score, but it also lifts the economy and everybody benefits, absent that kind of growth.

Sen. Steve Daines: “I like the idea, but it’s going to be really hard to find a way to pay for it.”

Li Zhou

I had a quick question for you on infrastructure — I’m wondering what your initial reaction to the $2 trillion proposal is?

Steve Daines

I like the idea, but it’s going to be really hard to find a way to pay for it.

Li Zhou

Do you see infrastructure investment as comparable to the investment that the tax cuts were intended to provide?

Steve Daines

Putting money in the hands of the American people and letting them decide what to do with it is the best way to grow the economy.

Li Zhou

And that’s what you think the tax cuts are doing?

Steve Daines

Yes.

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