June 15, 2021

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Biden presents infrastructure counteroffer. But Republicans aren’t impressed. – POLITICO

4 min read

The White House’s counteroffer—to $1.7 trillion from $2.25 trillion—was meant to demonstrate that the administration remains eager to craft a deal with Republicans, even as liberal Democrats press Biden to forge ahead alone out of fear that he may be willing to give up too much during the negotiations.

“This is the art of seeking common ground,” White House press secretary Jen Psaki said at Friday’s press briefing. But she made clear the administration was unwilling to back down from its redlines to fund the bill, a point officials reiterated coming out of the meeting.

Senate Republicans, however, did not leave Friday’s call optimistic about the fate of the bipartisan discussions. A spokesperson for Sen. Shelley Moore Capito (R-W.Va.), the lead negotiator, panned the White House’s counteroffer, calling it “well above the range of what can pass Congress with bipartisan support” and noting “vast differences” remain on many issues, including the definition of infrastructure, the price tag and pay-fors.

“Based on today’s meeting, the groups seem further apart after two meetings with White House staff than they were after one meeting with President Biden,” Capito’s office said.

The GOP’s problems with the counteroffer were found in its fine print. Instead of just slashing the overall overall cost, Biden proposed “shifting” spending on research and development, small business, supply chains and manufacturing into other proposals, including the Endless Frontier Act and the CHIPS Act. The president’s allies note that Republicans themselves are relying on accounting maneuvers to boost the overall number in their last proposal to far higher than it is in reality, making the large gap even larger.

The new Biden infrastructure proposal also would cut broadband spending to match the Republicans’ latest offer, and cut investment in “roads, bridges and major projects” to get closer to the Republicans’ bottom line — a point an administration official involved in the talks characterized as ironic given the GOP’s insistence all along that the package focus heavily on improving “core” infrastructure — but a concession nonetheless.

Administration officials stressed that Biden’s original proposal was justified to meet the country’s growing needs, after years in which prior presidents promised to tackle infrastructure (including President Donald Trump and his infamous infrastructure weeks) only to fail to get bills passed.

The Biden White House said their adjustments were made in good faith and in the interest in finding common ground. Officials said it was now up to Republicans to come back with proposals of their own to bring the two sides closer.

The current stalemate is only likely to increase calls from liberal Democrats to ditch Republicans and instead pursue reconciliation, which would allow Senate Democrats to muscle the package through without GOP support. Sen. Joe Manchin (D-W.Va.), the Senate’s most conservative Democrat, has been pushing for bipartisan negotiations, but it’s not clear yet if failed talks with Republicans will be enough to convince him to move forward along party lines.

“I’ve used this phrase before on the infrastructure, on the bipartisan effort: the fish or cut bait moment,” said Sen. Bob Casey (D-Pa.) this week. “I don’t know when that is precisely but I think for us there’s a real danger in pushing off the fish or cut bait date.”

The White House and Senate Republicans met earlier in the week. But their Tuesday gathering yielded little progress, with the parties still struggling to reach consensus on a definition of infrastructure. Biden had set a target for “progress” on a sweeping infrastructure package by Memorial Day—a date that is rapidly approaching.

Inside the White House, there’s an appetite to keep pushing on a deal past that date if they still believe that Capito is operating in good faith. But as of now, the two sides remain hundreds of billions of dollars apart and nowhere near agreeing on how to fund the investments. Biden is pushing to raise the corporate tax rate to pay for the package, a non-starter for Senate Republicans, who have instead suggested user fees, which the White House says would violate Biden’s pledge not to raise taxes on people making less than $400,000.

In a memo outlining their counteroffer, White House officials noted “concern” that the Republican proposal left out investments in areas like environmental remediation, veterans hospitals and construction, and workforce development and training. Psaki said the Republican offer had room for improvement.

“The counteroffer also reflects our view that the Republican offer excludes entirely some proposals that are key to our competitiveness, key to investments in clean energy and in industries of the future, and rebuilding our workforce, including critical investments in our power sector, building and construction, workforce training, veterans hospital construction and the care economy,” Psaki said.

The Biden administration’s counteroffer pushed for more funding for so-called “critical transportation” infrastructure like rail, pointing to China’s investment in “such projects.” It also proposed eliminating lead pipes and fund resilience projects in light of threats from climate change. But Psaki and others added that specifics will still be up for negotiation.

“I’m not a mathematician, otherwise I wouldn’t be here. But obviously we proposed a package that was $500 billion less expensive, so it needs less pay-fors. But what that looks like will have to be a part of the negotiation,” she said.

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