The Trump White House could use an obscure tax provision to fund a massive infrastructure project, according to a new report from the Center for American Progress.
The proposal would be a major victory for Democrats in Congress and a major disappointment to Trump, who has vowed to roll back the Affordable Care Act and impose a $1 trillion infrastructure plan on the nation.
The legislation is “not a partisan issue, but it is a matter of priorities,” said Steve Green, a former deputy chief of staff at the National Economic Council.
It would give the president and his aides the flexibility to take the funds earmarked for roads, bridges, and other infrastructure projects and use them to fund the Trump administration’s ambitious infrastructure agenda.
The plan would also give the White House leverage to negotiate with Congress over how to pay for the infrastructure spending.
A top priority for House Republicans, including Speaker Paul Ryan, is to get a long-term, $1.4 trillion infrastructure bill through Congress by the end of 2018.
But the Trump White Court has signaled its willingness to let lawmakers finish their work without any new spending or tax hikes, which would likely leave the bill with little room to maneuver.
“It’s not clear how many [Democrats] would vote for that, but I think it’s a real possibility that they might,” Green said.
The White House’s efforts to use the transportation and housing funds to fund road projects are “not new,” said the report, which was based on interviews with officials, lawmakers, and experts.
The administration has long advocated for a $50 billion infrastructure investment over the next decade, a measure that would include the building of new roads and bridges.
But Republicans and Democrats have different priorities for the money.
Green’s analysis of the infrastructure plan indicates that the Trump Administration could fund roads and other projects through a variety of means, from tax cuts to a range of other revenue sources.
The $1 billion tax credit for projects would be targeted at the construction of new highways, while other tax breaks could be used to pay off the debt incurred by the highway and transit projects.
A $100 million grant to build or rehabilitate existing bridges would be used for road construction and repair.
A $200 million grant for infrastructure projects would go toward bridge rehabilitation.
Other potential sources of funding could include a loan guarantee from the Federal Highway Administration, as well as grants to municipalities and other government agencies.
The plan is likely to include a combination of tax credits and other financing mechanisms, Green said, though the exact amount of the funding could be determined by how many roads and transit construction projects are built.
The Trump administration would have to convince Congress to allow the infrastructure program to proceed.
The president could use a two-year grace period after the tax credit expires to fund his infrastructure program, Green added.
But that would be unlikely, Green noted, given the political and political pressure the project would face.
Democrats, who control the House and Senate, have long resisted the idea of using tax breaks for infrastructure construction.
They fear that the tax credits will be used by the administration to push through a Republican-backed infrastructure plan that could ultimately slash the federal budget.
House Democrats have said that they won’t support a tax bill that does not include a $100 billion tax cut for infrastructure, which they believe would further drive up the deficit.
Republicans are also skeptical that the administration would get a tax credit that would allow it to fund any new infrastructure.
Republicans and some Democrats have pushed the White Court to agree to such a tax increase, arguing that the White Houses tax credits are not used to fund highway and rail projects and are instead used to cover interest payments on the debt that is incurred by those projects.
But Green said that Republicans have been able to persuade many Republican members of Congress to agree that the government’s existing tax credit program is not enough.
The tax credits for roads and transportation could be the easiest to get in the new tax bill, Green argued, given that the President’s team is likely ready to make good on promises to the White Council that the money would be earmarked to finance road and rail construction.
The Tax Foundation, a nonpartisan research group, estimated that if the White Office and the Administration are able to reach a deal on a two year grace period, the White Senate could get a $400 billion tax break for road projects in the $400 trillion tax package.
That estimate came from an analysis by the Tax Foundation’s chief economist Robert Kuttner.
The tax credit would cost roughly $60 billion a year over a 20-year period, according the Tax Policy Center, a Washington think tank.
The White House has been clear that it would only be willing to accept a $200 billion tax incentive for infrastructure if it is linked to an infrastructure program.
The administration has said it would not be able to raise the $1 million tax credit it would need to fund that program from other sources.
Green said the White administration is also likely to agree not to impose a new tax on cars to pay down the debt, which has already