(Adds Mulvaney statement, paragraphs 4-5)

By David Shepardson

WASHINGTON, Feb 11 (Reuters) - U.S. President Donald Trump will roll out an infrastructure plan on Monday that already faces significant hurdles in Congress because it does not offer as much new federal funding as Democrats want or directly address how to pay for the effort.

The plan to use $200 billion in federal funds to try to stimulate $1.5 trillion in infrastructure improvements over 10 year could reshape how the federal government funds roads, bridges, highways and other infrastructure. The administration also says it will eliminate bureaucratic roadblocks to completing projects that can tie up new roads for years.

White House Budget Director Mick Mulvaney said on Sunday that in addition to the $200 billion the administration seeks for its infrastructure proposal, the White House wants $21 billion over two years for infrastructure that was part of a budget framework deal approved last week in Congress.

Mulvaney said in a statement that the plan “reduces the regulatory burdens we face, shortening and simplifying the approval process for projects, and eliminating barriers that prevent projects from being efficiently developed.”

But in the face of a divided U.S. Senate and congressional elections in November, administration officials acknowledged the plan faced a difficult road to winning approval.

House Democratic leader Nancy Pelosi said Trump’s plan "shifts the burden onto cities and states."

White House aides told reporters in a phone briefing on Saturday that the proposal, billed only as "infrastructure principles" and to be part of Trump's budget plan on Monday, was just a starting point.

"This in no way, shape or form should be considered a take-it-or-leave-it proposal. This is the start of a negotiation - bicameral bipartisan negotiation - to find the best solution for infrastructure," said a senior official, who was not allowed to be identified under the ground rules for the briefing.

The White House is pointing to a wide variety of potential cuts in its budget proposal that could be used to offset the costs of the plan.

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The White House proposal will offer $100 billion in incentives to state and local governments, but will propose a smaller percentage of matching finds than the federal government has typically offered.

The remaining $100 billion involves $50 billion for rural project grants distributed to all states, $30 billion for government financing of projects and $20 billion toward “transformative projects” or new ideas that are not simply repairing existing infrastructure.