Democrats may scrap matching funds from infrastructure bill

The sun rises on the U.S. Capitol dome before Joe Biden's presidential inauguration in Washington, U.S., January 20, 2021. REUTERS/Jonathan Ernst/File Photo

Democrats are threatening to scrap plans to create an infrastructure bank in the $1.2 trillion bipartisan spending bill after Republicans opposed a provision intended to lift workers’ wages, according to three people familiar with the discussions.

A decision to remove funding for the bank would be aimed at resolving a logjam over U.S. President Joe Biden’s top legislative initiative, as lawmakers scramble to finalize key details of the plan ahead of the Senate’s typical August recess.

The group of bipartisan lawmakers seeking to hammer out Biden’s infrastructure bill want to include $20 billion for a newly created infrastructure bank that would attract investment through private-public partnerships.

But Republicans will not agree to the funding unless the bill is stripped of requirements to follow the Davis-Bacon Act, which requires contractors to pay prevailing wages, typically higher levels set by unions.

The $20 billion in funding would attract significantly more from the private sector and could be used to pay for green energy projects, such as wind and solar, that the administration is counting on to help curb climate change and meet Biden’s net-zero carbon targets.

A White House spokesman declined to comment.

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