Exclusive-Democrats may scrap matching funds from infrastructure bill over wage issue

By Jarrett Renshaw and Susan Cornwell
WASHINGTON (Reuters) - Democrats are threatening to ditch plans to create an infrastructure bank under the $ 1.2 trillion bipartisan spending bill after Republicans oppose a provision to raise workers' wages, according to three people familiar with the discussions .
A decision to cut funding for the bank would aim to break a deadlock over US President Joe Biden's key legislative initiative as lawmakers scramble to finalize key details of the plan before the typical August Senate hiatus.
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The group of bipartisan lawmakers keen to draft Biden's Infrastructure Bill plans to earmark $ 20 billion for a newly created infrastructure bank that would attract investment through public-private partnerships.
But Republicans won't approve of the funding unless the bill is exempted from the requirements to abide by the Davis-Bacon Act, a decade-old law that requires contractors to pay the prevailing wages that are normally used by unions at higher levels Levels are secured.
A White House spokesman declined to comment.
The $ 20 billion in funding would attract significantly more from the private sector and could be used to pay for green energy projects like wind and solar that the government is counting on to help curb climate change and Biden's net-zero carbon targets to reach.
While most of the bipartisan spending bill would fall under the Davis-Bacon Act, Republicans are reluctant to pass wage laws to private companies even when they rely on public funding.
Democrats, who are closely associated with major unions, also want prevailing wage laws to apply to high-speed broadband companies, but that is also facing Republican opposition.
If funding falls out of the bipartisan infrastructure bill, the Democrats could put it back into their multi-trillion spending package that they later want to pass across the party lines. But the protracted negotiations are also causing consternation among progressive Democrats, who fear that important policies will be jettisoned or watered down.
The legislature hopes to be able to hold a procedural vote as early as Monday, which will make it possible to move the bipartisan law forward. Other key issues remain unresolved until the weekend, including a disagreement over how much money is being allocated to public transport.
(Reporting by Jarrett Renshaw in Philadelphia and Susan Cornwell in Washington, adaptation by Trevor Hunnicutt and Matthew Lewis)

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