EXCLUSIVE Democrats May Cut Matching Funds From Infrastructure Bill Over Wage Question

WASHINGTON, July 23 (Reuters) – Democrats threaten to drop plans to create an infrastructure bank in bipartisan $ 1.2 trillion spending bill after Republicans objected to a provision aimed at raising workers’ wages, according to three people familiar with the talks.

A move to cut the bank’s funding would seek to resolve the deadlock over US President Joe Biden’s main legislative initiative, as lawmakers scramble to finalize key details of the plan ahead of the typical Senate recess in August.

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

But Republicans won’t agree to the funding unless the bill is exempt from the requirement to follow Davis-Bacon Law, a decades-old law requiring contractors to pay prevailing wages, usually levels higher guaranteed by the unions.

A White House spokesperson declined to comment.

The $ 20 billion funding would attract much more from the private sector and could be used to fund green energy projects, such as wind and solar, which the administration relies on to help tackle climate change and meet Biden’s net zero carbon goals.

While the bulk of the bipartisan spending bill would fall under the Davis-Bacon Act, Republicans are reluctant to enforce payroll laws on private companies, even when they depend on public funding.

Democrats, who are closely tied to the big unions, also want current wage laws to apply to broadband contractors, but this is also meeting opposition from Republicans.

If the funding falls into the bipartisan infrastructure bill, Democrats could put it back into their multibillion-dollar spending program that they hope to pass later according to parties. But the lengthy negotiations also arouse dismay among progressive Democrats who fear key policies will be dropped or watered down.

Lawmakers hope to hold a procedural vote on Monday that will allow the bipartisan bill to move forward. Other key issues remain unresolved as the weekend approaches, including a disagreement over how much funding would be allocated to public transit.

Reporting by Jarrett Renshaw in Philadelphia and Susan Cornwell in Washington Editing by Trevor Hunnicutt and Matthew Lewis

Our Standards: Thomson Reuters Trust Principles.

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