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Trump proposes $1 trillion plan to fix U.S. infrastructure; who will pay?

Posted: 3:56 PM, Aug 24, 2018
Updated: 2018-08-24 20:56:20Z

America's aging infrastructure is expected to be a hot topic for voters in the upcoming midterm elections.

Lawmakers on both sides want to fix it, but there’s one major sticking point: how do you pay for it?

President Donald Trump has proposed a $1 trillion plan to improve aging roads, bridges and tunnels across the country.

Transportation Secretary Elaine Chao told Fortune magazine there's one sticking point between the two parties.

“How do you pay for it, is the toughest question,” says Chao. “There are many ways of paying for the infrastructure proposal, and I would say the majority of them are not ones I could get consensus from in this audience.”

One way that Republicans propose to raise money will impact most Americans directly.

“A gas tax increase and a diesel tax increase of about 15 cents a gallon for gas and 20 cents for diesel to help fund this, because we do need to fund infrastructure upgrades,” says Republican strategist Ryan Williams. “We can't make the money appear out of thin air.”

Republicans also want to raise money by letting private sector businesses help finance projects.

Democrats have come up with their own trillion-dollar plan.

“Where's the money [going] to come from? We don't want to increase our deficit. The tax bill's done that enough,” says Sen. Chuck Schumer (D-NY). “We say take some of those tax breaks from the wealthiest Americans and put them in middle class jobs.”

Democrats want to increase the tax rate on the rich, raise the corporate income tax and reverse cuts to the estate tax.

But the Democrats admit, as of now, their plan has little chance of going anywhere.

“These are all ideological steps the Democrats are taking, because they don't control the House or the Senate,” says Democratic strategist Tiffany Cross.

Both sides do agree they don't expect any action to be taken on infrastructure until after the midterm elections.