pete buttigieg
Pete Buttigieg.
STEFANI REYNOLDS/POOL/AFP via Getty Images
  • Biden is set to unveil a $3 trillion infrastructure bill next week, but its funding is undecided.
  • Transportation Secretary Pete Buttigieg is eyeing a mileage tax as a way to fund the bill.
  • Lawmakers have disagreed on funding, with the GOP position against any kind of tax increase.
  • See more stories on Insider's business page.

President Joe Biden is set to unveil a massive $3 trillion infrastructure bill next week and many lawmakers have floated various ideas on how to fund it. Secretary of Transportation Pete Buttigieg has an idea: a mileage tax.

In a CNBC interview on Friday, Buttigieg discussed Biden's upcoming proposal and said the plan will lead to a net gain for Americans, rather than a net cost, since infrastructure is "a classic example of the kind of investment that has a return on that investment."

"That's one of many reasons why we think this is so important," Buttigieg said. "This is a jobs vision as much as it is an infrastructure vision, a climate vision and more."

When it comes to funding, Buttigieg said revenue will likely come from different sources and is something that he still needs to discuss with Congress, but a mileage tax could be an effective option. Introducing that would also encourage the use of electric vehicles, which has been a goal of Biden's since the start of his presidential campaign.

"I think that shows a lot of promise," Buttigieg said. "If we believe in that so-called user-pays principle, the idea that part of how we pay for roads is you pay based on how much you drive."

Buttigieg added that Build America Bonds - Obama-era bonds financed by the federal government - could also be revived to fund the infrastructure bill.

The president is set to unveil his infrastructure proposal in Pittsburgh next week, and it could include up to $3 trillion in spending, split into separate packages for repairing crumbling infrastructure and for care-economy funding for initiatives including free community college and universal pre-K.

Sen. John Thune, the Senate's second-ranked Republican, told reporters on Tuesday that splitting up the infrastructure bill is a "pretty cynical ploy" by Democrats to attempt to gain GOP support for certain measures.

And even some moderate Democrats have expressed concerns about passing an infrastructure bill without Republican support. Moderate Democratic Sen. Joe Manchin of West Virginia told Axios that he likely won't support another reconciliation bill.

"I am not going to get on a bill that cuts them [Republicans] out completely before we start trying," Manchin said.

Buttigieg on Thursday urged the House Transportation Committee to make a "generational investment" in infrastructure and combat racial inequity and climate change.

He said: "There is near-universal recognition that a broader recovery will require a national commitment to fix and transform America's infrastructure."

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