Key GOP senator suggests taking unused federal unemployment money and spending it on infrastructure

• GOP Sen. Shelley Moore Capito floated using unused jobless aid to fund an infrastructure plan.
• This comes as a growing number of GOP-led states are cutting unemployment benefits early.
• The GOP has opposed using corporate tax hikes to fund infrastructure, which Biden proposed.

Republican Sen. Shelley Moore Capito of West Virginia suggested redirecting federal funds from President Joe Biden's stimulus law to finance an infrastructure package.

"I think there's all kinds of different ways that we're looking at. Certainly repurposing some of those covid dollars," she told Bloomberg. "I've been looking at those 21 states that are no longer paying the enhanced unemployment - why don't we repurpose those dollars to help those folks coming off unemployment get work in an infrastructure plan."

She went on: "It sounds like a good win-win situation for those dollars."

Biden's American Rescue Plan included $300 weekly unemployment benefits that would extend through September 6, but following April's weak jobs report, 22 Republican-governed states have so far announced they will be ending unemployment benefits early to encourage people to get back to work.

Texas is the biggest GOP-led state so far to announce it would be ending federal benefits, cutting off an estimated 1.3 million from $8.8 billion in aid, adding to the 3.5 million workers nationwide at risk of losing jobless aid.

Capito's suggestion to repurpose unemployment aid to fund infrastructure is only one of the many options lawmakers are floating to fund a potential bill. For example, Republicans have also suggested using "user-fees," a set of charges levied on the users of a federal service or good, raising the federal gas tax, for instance, but they are firm in opposing corporate tax hikes to fund infrastructure, which Biden proposed and Democrats support.

"We're not interesting in reopening the 2017 tax bill. We made that clear to the president," Senate Minority Leader Mitch McConnell said at a news conference, referring to how Biden's corporate tax hike would partially repeal former President Donald Trump's cuts from that year. "That is our red line."

Capito met with Transportation Sec. Pete Buttigieg and Commerce Sec. Gina Raimondo on Tuesday to discuss the GOP's $568 billion counter-offer to Biden's infrastructure plan, and she told reporters that while they did discuss how to pay for infrastructure, they didn't make much headway on the topic because they first needed to reach an agreement on what they would be funding.

And while Biden and his administration remain committed to reaching a bipartisan consensus on infrastructure, Democratic lawmakers are increasingly urging him to forego negotiations and move ahead with passing the comprehensive package he proposed, with corporate tax hikes, to get urgent aid to Americans.

House Democrats wrote in a letter: "While bipartisan support is welcome, the pursuit of Republican votes cannot come at the expense of limiting the scope of popular investments."

Capito did not immediately respond to Insider's request for comment.