Senate Republicans unveiled their $ 928 billion infrastructure counter offer to President Joe Biden on Thursday, as the parties see if they can bridge an ideological chasm to reach a bipartisan deal.
The plan, presented by a group led by Republican Sen. Shelley Moore Capito of West Virginia, includes:
$506 billion for roads, bridges, and major infrastructure projects, including $ 4 billion for electric vehicles
- $98 billion for public transportation
- $72 billion for water systems
- $65 billion for broadband
- $56 billion for airports
- $46 billion for passenger and freight rail systems
- $22 billion for ports and waterways
- $22 billion for water storage
- $21 billion for security efforts
- $20 billion for infrastructure financing
Biden’s last offer to Republicans was $ 1.7 trillion, $ 600 billion less than his original plan. He has urged the Republican Party to put at least $ 1 trillion into an infrastructure package.
Senate Minority Leader Mitch McConnell, R-Kentucky, told CNBC the Republican Party could make additional proposals after Thursday’s proposal.
“We’re going to talk and I understand the president is willing to talk,” we told Squatters on the street on Thursday. We want to see the results of a larger infrastructure package.
In a statement later Thursday, White House press secretary Jen Psaki praised the constructive additions to the Republican proposal, but said the administration remains concerned about funding levels for rail systems, public transport and clean energy. She added that the White House is concerned that major cuts in COVID relief funds could jeopardize pending aid to rural small businesses, restaurants and hospitals.
As for the way forward, the president called Senator Capito to thank her for the proposal and tell her that she would follow up after getting additional details, said Psaki.
To reach an agreement, the parties need to resolve not only the price difference, but also how to offset the costs. In their counter-offer, Republicans again rejected Biden’s call for an increase in corporate taxes, claiming that they could cut infrastructure costs either with funds already allocated by Congress or with transportation user fees.
Biden will also have to grapple with concerns within his own party, as some lawmakers worry the president will dilute his vision of winning the support of the Republican Party. Sen. Elizabeth Warren, a Massachusetts Democrat, said it was not a serious counter offer.
First of all, they don’t have ‘payments’ for this, it’s not real, the progressive Democrat told MSNBC. They have this delusional notion of how we are going to take the money that has already been committed elsewhere and other expenses.
The GOP proposal does not include the Biden administration’s priorities such as $ 400 billion for home health care, $ 100 billion for reimbursements for electric vehicle consumers, or spending to improve homes and schools.
Republicans and the White House have come close to agreeing on an infrastructure plan, but have yet to resolve fundamental questions about the scope of a package and how to pay for it, Capito said Thursday. She said the parties are getting closer to negotiations ahead of Memorial Day, the date the White House wanted to see progress in bipartisan negotiations.
We’re still talking. I’m optimistic, we still have a big gap, the West Virginia Republican told CNBC’s Squawk Box. I think what we’re really falling short of is that we can’t seem to get the White House to agree on a definition or scope of infrastructure that matches where we think it is, and that’s the infrastructure physical central .
The White House is still incorporating its human infrastructure into this package and that is not a principle for us, he continued, referring to Biden’s plans to invest money in programs that include caring for elderly and disabled Americans.
It’s unclear whether the two sides can overcome wide ideological differences over what constitutes infrastructure and how to pay for improvements to reach a bipartisan agreement. If negotiations are not promised, Democrats will have to decide whether to try to pass their own framework bill using special budget rules.
The process would bring its own headaches. Senate Democrats would have to keep all 50 members of their caucus on board and abide by strict rules about what can be included in a budget reconciliation bill.
The Republican senators who crafted the offer to Biden mentioned that lawmakers could redirect unused coronavirus relief funds for state and local governments to infrastructure, or implement user fees on transportation such as electric vehicles. These Republican solutions could make Biden a bind.
The president has promised not to raise taxes on anyone who earns less than $ 400,000 a year. User fees or an increase in the gas tax would put an additional burden on many Americans whose income falls below the threshold.
Republicans have said they do not want to raise taxes to cover the cost of improving transportation, broadband and the water system. Biden has promised to raise the corporate tax rate from 21%, a level that has been raised to at least 25% since the Republican Party cut taxes in 2017.
We can do this without touching … those tax cuts, Capito told CNBC.
Capito said he sees the possibility of a bilateral agreement on transportation costs. He noted that the Senate Environment and Public Works Committee, where he sits as a senior member, raised the nearly $300 billion surface transportation bill, which he believes could further guide the infrastructure deal.
By slashing his original $ 2.3 billion plan, Biden eliminated funding for research and development and supply chain improvements. He also reduced the proposed spending on broadband, roads and bridges.