President Joe Biden is reportedly coming down on the price tag on an infrastructure package in hopes of coming to a bipartisan compromise with a group of Republican senators, but new spending and corporate tax hikes remain sticking points in negotiations.
In about an hourlong meeting with Republican negotiator West Virginia Sen. Shelly Moore Capito on Wednesday, Biden asked for $1 trillion in new spending on top of a baseline of $400 billion over five years, according to CNN and Politico.
That would put Biden’s new ask down from his initial $2.3 trillion proposal and the $1.7 trillion compromise previously offered to Republicans.
But it is significantly higher than what Republicans proposed last week: A $928 billion counteroffer focusing on traditional “infrastructure” such as roads, bridges, and broadband projects, with much of the money for the projects coming from unspent funds originally designated in coronavirus relief legislation and $257 billion in new spending. That was an increase from Republicans’ original five-year $568 billion proposal.
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Biden is also reportedly sticking to wanting to pay for the new spending with a corporate tax hike. Previous plans from Biden included increasing the corporate tax rate from 21% to 28%.
Republican ideological opposition to tax increases and Democratic insistence on huge amounts of funding for the “care economy” have been major roadblocks to striking a deal.
Capito and Biden will continue discussions in another meeting on Friday.
“This afternoon, the President hosted Senator Capito for a constructive and frank conversation in the Oval Office about how we can drive economic growth and benefit America’s middle class through investing in our infrastructure,” the White House said in a statement on Wednesday.
Capito was not joined by any other senators in Wednesday’s meeting. Congress is not in session this week, and most lawmakers are in their home states and districts. She gave a rundown of the meeting to other Senate Republicans in the negotiation group later on Wednesday.
“Senator Capito reiterated to the president her desire to work together to reach an infrastructure agreement that can pass Congress in a bipartisan way. She also stressed the progress that the Senate has already made. Senator Capito is encouraged that negotiations have continued,” her office said in a statement on Wednesday.
The Biden administration, though preferring to keep his campaign promise to make a bipartisan agreement, is anxious to strike a deal soon or move on without Republicans.
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If no deal is reached, there is a chance that Democrats could attempt a reconciliation budget tool to bypass the 60-vote threshold to overcome a filibuster and pass an infrastructure package without support from Republicans, using Vice President Kamala Harris as a tiebreaking vote in the 50-50 divided Senate.
The clock is ticking. Senate Majority Leader Chuck Schumer has said he hopes to put a bill on the Senate floor for a vote before the August recess.
