House Transportation & Infrastructure Committee Chair and Representative Peter DeFazio (D) of Oregon, spoke with Yahoo Finance's Jessica Smith to discuss President Joe Biden's progress on infrastructure, managing climate change, and taxes.

Video Transcript

SEANA SMITH: Welcome back. Now $4 trillion in new government spending is being debated in Washington right now. Let's go back to Capitol Hill where our own Jessica Smith is standing by. Jess.

JESSICA SMITH: Yeah, Seana. I am here with Congressman Peter DeFazio. He is the chair of the House Transportation and Infrastructure Committee. Thank you so much for joining us.

PETER DEFAZIO: Thanks for the opportunity.

JESSICA SMITH: Let's start talking about infrastructure. The House has already passed your plan, the Invest in America Act, that water and transportation infrastructure bill. You've been clear you're not a fan of this bipartisan deal. So do you think Senate democrats tomorrow should vote for it, vote to move ahead in this debate?

PETER DEFAZIO: Well we're expressing our concerns. We passed a transformative transportation bill that met the goals set by the White House, that is to deal significantly with climate change, create new programs for social equity for transit deserts, underserved communities, rejoining communities split asunder by freeways, major titles on safety, and significant increase in investment transit, significant increase in rail, and most of those things are lacking in the Senate proposal. In fact, they have no transit at this point in time.

Their rail title is way smaller than ours. It's not going to move us toward high and higher speed rail. And then the policies they have do not deal meaningfully with climate change, fossil fuel pollution. Their social equity programs are one sixth ours. They lack the policies. So we're very concerned about the lack of involvement and discussion with us and between us and the Senate.

JESSICA SMITH: So Politico quoted you saying the whole thing falling apart is probably the best thing. So to be clear, do you want this bipartisan plan to fail at this point?

PETER DEFAZIO: One of two things. They can pass it as a standalone bill and we go to conference and make it better and work out our differences. Or it fails. If this is a take it or leave it on the House side, I'm going to leave it.

JESSICA SMITH: So what specifically do you want to see? What changes do you want to see in order to make this passable in the House?

PETER DEFAZIO: Look, we've been living off the Eisenhower era for 70 years. It's the 21st century. We have built 30,000 lane miles of highways and our 100 largest cities in the last 25 years. Guess what? They're more congested than ever. It's called induced demand. You build it, there's more traffic. We have to look at transit alternatives, commuter rail alternatives, we've got to make it safe for people to cycle and use pedestrians and cycling. There's a 50% increase in fatalities last 10 years in cycling and pedestrians because it's not safe.

My bill deals with all those things. Their bill doesn't. Those things have to be in a 21st century bill. I'm not going to do Eisenhower 8.0 and repeat the mistakes of the last century.

JESSICA SMITH: Let's talk about climate a bit because that is a key priority for you for many democrats in the House and the Senate. What provisions do you want to see on climate specifically?

PETER DEFAZIO: We have something that'll fix it for us. There are states, Texas, and states like that. It's like their solution is more big highways, rip down, go through more neighborhoods, just make it wider and bigger. Virginia just rejected that approach. And they figured out a different approach with commuter rail. I want states before they engage in massive expansion of highways to look at alternatives that might better serve the people in that state, that city, or that region, which won't be fossil fuel polluting single occupancy vehicles jamming up the road.

JESSICA SMITH: We've heard from republicans and even some moderate democrats like Senator Joe Manchin saying that they're concerned about some of the climate measures that are in the reconciliation plan. So how do you balance the concerns of progressives who say climate has to be in this bill and moderates who are concerned about it?

PETER DEFAZIO: Well in reconciliation, they're dealing with-- fossil fuel pollution from transportation is the biggest polluter in the country. Second largest is energy. And in reconciliation, they're going to deal with renewable power and grid reinforcement so we can wield that so people aren't charging their electric vehicles off of a coal plant. You don't get much of a gain there. So that's a different title in their bill. And that's absolutely necessary to move toward more renewable energy to charge the vehicles that are coming.

And we're going electric. The world's going electric. GM's going all electric. Federal Express is going all electric run by a very conservative republican, including semis. There are already four companies producing electric semis. There's no place to charge it. We have to build the backbone and then we have to supply the power to charge those vehicles.

JESSICA SMITH: A big sticking point in all of this has been, how do you pay for it? And it sounds like at least on the Senate side, the IRS enforcement, the ramped up enforcement have been dropped from the bill. I know you have a bill to narrow the tax gap. What do you think about them dropping this measure? And how do you want to move forward and make sure people pay what they owe?

PETER DEFAZIO: Well they're ripping off average Americans. They say on average, a family's paying 3,000 bucks or more a year in taxes because of tax avoidance by millionaires and billionaires. It's estimated-- there's credible estimates that say it's $600 billion a year in avoidance. IRS' staffing is 20% what it was below 10 years ago. They've had a massive turnover because people aren't well-paid. They're being abused.

We need professionals there. We need to close these tax loopholes. We need to make those people pay under existing law what they're supposed to pay. And apparently, the republicans don't think it's fair to make them pay what they actually owe. That's nasty.

JESSICA SMITH: We have heard a lot. We just heard it from Congressman Kevin Brady concerns about inflation, especially as you consider trillions of dollars in new spending. What do you say to those concerns?

PETER DEFAZIO: Well I just read today that 40% of the increase last month was used car prices, which by the way have plateaued and started to go down. And then before that, a big factor was lumber prices and housing. Lumber's down 60% in the last two months. What we saw was huge bottlenecks coming out of COVID after the pandemic. And there's still bottlenecks out there. We're working our way through those things. I don't believe this is going to be a sustained threat. The Federal Reserve doesn't believe it's a sustained threat.

Treasury doesn't believe it's a sustained threat. Only the republicans do. They may carrying on about inflation forever, but it hasn't happened.

JESSICA SMITH: OK, I think we have to leave it there. Thank you so much, Congressman Peter DeFazio, chair of the House Transportation and Infrastructure Committee. We'll send it back to you in New York.