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The White House may not pay for all of Biden's infrastructure plan with a tax increase

jen psaki biden capitol commissionAlex Wong/Getty Images

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The Biden administration may not attempt to cover the entire cost of the infrastructure plan and instead put it on the equivalent of the nation's credit card, as it did the $1.9 trillion stimulus passed in March.

Asked whether financing the entire plan was a red line for President Joe Biden, White House Press Secretary Jen Psaki responded on Tuesday: "His only red line is inaction."

"He is happy to hear, as he did yesterday, proposals that members have — whether it is to have a lower increase on the rate on corporations, whether there is proposals to pay for this plan in a different way," she said at a daily news briefing.

The remarks indicate the administration is open to not paying for the entire proposal by a set of tax hikes on multinational corporations. Biden has introduced a $2.3 trillion plan, and another one focused on child care and education is expected to be rolled out in several weeks.

The Biden infrastructure plan includes major funding to fix roads and bridges and set up clean energy incentives. It also contains federal money for in-home elder care, public transit, broadband, and schools, among others. 

Democrats are broadly more supportive of deficit-spending, a step which grows the national debt. Congress has approved roughly $6 trillion in emergency spending over the past year to combat the pandemic. 

The Treasury Department said March's federal budget deficit — the gap between tax revenue and government spending — clocked in at $927 billion, It's the third highest monthly total on record as stimulus dollars flowed.

Congressional Democrats say they are now breaking with their response after the 2008 financial crisis and going big. Many economists say the recovery would have been faster if more federal cash had gone out the door to support struggling people.

Republicans are fiercely opposed to the Biden infrastructure plan. It includes a partial repeal of the 2017 Trump tax law. Many GOP lawmakers view it as their biggest economic achievement in decades.

"This tax bill of 2017 undone would create an extensive loss of jobs in our country, do exactly the wrong thing and move us in the wrong direction," Senate Minority Leader Mitch McConnell said Tuesday at his weekly press conference.

He said Republicans could support an infrastructure package that doesn't roll back the Trump's tax cuts. "I don't think there's much if any sentiment among Senate Republicans for undoing the 2017 tax bill," he said.

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