Gap With White House on Infrastructure Is Widening, GOP Says

(Bloomberg) -- Senate Republicans panned President Joe Biden’s trimmed-down $1.7 trillion infrastructure proposal on Friday, saying the revised offer suggested the two sides were even further apart than the lawmakers had thought they were.

“There continue to be vast differences between the White House and Senate Republicans when it comes to the definition of infrastructure, the magnitude of proposed spending, and how to pay for it,” said Kelley Moore, a spokeswoman for West Virginia Senator Shelley Moore Capito, the lawmaker leading the GOP effort.

Biden’s offer on Friday reduced the size of his infrastructure and jobs plan by about a quarter, but it’s still far higher than what Republicans have suggested they could support. White House Press Secretary Jen Psaki said it exemplified “the art of seeking common ground.”

The proposal -- presented to Republican senators in an afternoon call -- was a response to a GOP counter-offer earlier this week, a modified version of their initial $568 billion pitch. While calling off the negotiations was discussed among the GOP members, most favored giving the talks another week, according to a person familiar with the Republicans’ view.

“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,” Moore added. Still, the Republicans will continue their conversations with the administration and consider the various aspects of the offer, Moore said in a statement.

While Biden’s new proposal is $550 billion less than the original $2.25 trillion American Jobs Plan, Psaki explained that the administration would still pursue much of what was removed, via other legislative vehicles. The plan also still retains $400 billion of elderly and disabled care that Republicans have said doesn’t count as infrastructure.

Trimmed Back

The spending figures, detailed in a memo obtained by Bloomberg News, are over 8 years.

On funding, the administration demonstrated openness to creating an infrastructure bank, something that Republicans had asked for. The new proposal is “a reasonable counter-offer,” Psaki said.

Republican lawmakers and staff felt the latest proposal was different from what had been discussed with the president himself, and assessed that Biden wasn’t in charge of the talks, said the person familiar with the GOP’s view. The Republican group was frustrated to have seen the White House memo only after its circulation in the media, and to see Psaki characterizing the offer even as the call proceeded, the person said.

Little Movement

Biden instructed his aides to make the overture to the Republican group in hopes of trying to advance the negotiations, a White House official said, speaking on condition of anonymity. The Republicans, led by West Virginia Senator Shelley Moore Capito, didn’t substantially expand their original $568 billion proposal, a person familiar with the discussions said.

Capito said in an interview Wednesday that the next two weeks would be critical in determining whether a bipartisan deal was possible. Senate Minority Leader Mitch McConnell had suggested a compromise figure as high as $800 billion, still far below the new Biden topline.

The White House committed to shifting spending on manufacturing, supply chains, small business, and research and development to other pieces of legislation being considered by Congress -- including bills aimed at combating China’s technology dominance and the global semiconductor shortage, Psaki said.

The administration’s plan doesn’t give up on Biden priorities including spending on clean energy, railways, workforce training, the so-called care economy and other areas that Senate Republicans omitted from their initial offer, according to the memo.

Funding Question

Biden hopes to see the Republicans move on some of those issues, just as he has compromised on some of theirs, the White House official said.

The administration continues to oppose user fees as a funding mechanism, as some Republicans have proposed. Biden won’t yield on his requirement not to raise taxes on Americans earning less than $400,000, the memo showed. That would also exclude a hike in the gasoline tax.

Biden hosted a group of Senate Republicans at the White House last week to step up an effort for a bipartisan compromise, and both sides have continued talks since then.

In last week’s negotiations, the administration highlighted that it would aim to pursue social spending and tax measures separately if they weren’t included in any compromise. The Republicans underscored they wouldn’t consider any roll-back of the 2017 tax cuts they enacted.

Biden has also released a separate $1.8 trillion “American Families Plan,” made up of social spending and higher taxes on wealthy individuals.

Capito said earlier this week she saw a more than 50% chance of being able to reach an agreement with the president. The overall process still has months to go, she said, with a bill was unlikely to clear both chambers of Congress by July 4, a deadline proposed by House Speaker Nancy Pelosi.

©2021 Bloomberg L.P.