WASHINGTON (AP) — The White House made a $1.7 trillion infrastructure
counter-proposal to Senate Republicans
on Friday, abandoning President Joe Biden
's $2.3 trillion proposal "in the spirit of finding common ground."
The new offer was announced by White House Press Secretary Jen Psaki
while talks between key Cabinet secretaries and Republican senators were still ongoing, at a critical stage toward a deal
. Skepticism had been growing on all sides due to complaints about the lack of significant movement off the opening bids. Republicans had offered a $568 billion plan.
“This proposal demonstrates a willingness to shrink in size,” she said during a press conference.
The administration is slashing more than $550 billion from the president's initial offer, according to a memo obtained by The Associated Press
The memo, however, makes it clear that Biden is not interested in having consumers pay for the new investments through tolls, gas taxes, or other fees, and that the administration is sticking with his proposal to raise the corporate tax to pay for the new investment, which Republicans oppose.
“Our approach should ensure that corporations pay their fair share,” the administration’s negotiators wrote to Republican senators in a memo.
The White House and Republican senators have been in talks since Biden met with a core group of Republican negotiators about the possibility of working together on an infrastructure plan. The White House sent the transportation and commerce secretaries, as well as top aides, to Capitol
Hill earlier this week to meet with the Republicans, and they had a follow-up video call on Friday.
The slog of those negotiations is certain to raise new concerns among Democrats
that time is running out to reach an agreement; the president's team had set a soft Memorial Day deadline to determine whether an agreement was within reach.
Psaki stated that the new proposal eliminates the president's proposed expenditures on broadband, as well as roads, bridges, and other major investments, in order to meet the Republicans' lower level. She also stated that the administration's proposal included "shifting investments in research
and development, supply chains, manufacturing, and small business
" out of the infrastructure talks, because they could be considered otherwise.
However, Psaki stated that the president's team is still advocating for investments in new veterans
hospitals, rail projects, and green energy
investments to combat climate change
, which Republicans have excluded from their proposals.
Overall, the White House reduced broadband spending from $100 billion to $65 billion, as Republicans proposed, and reduced road and bridge spending by $39 billion to meet the GOP
According to the memo, eliminating the R&D funds would result in a $480 billion reduction.
Securing a massive infrastructure plan is Biden's top priority as he seeks to make good on his campaign pledge to "build back better" in the aftermath of the coronavirus
crisis and the economic churn caused by a shifting economy
. With narrow Democratic majorities in the House and Senate, the president is reaching out to Republicans for support on a potentially bipartisan approach rather than relying on simple Democratic majority.
Republicans are unwilling to undo the 2017 tax cuts, the party's signature domestic achievement under President Donald Trump
, which reduced the corporate rate from 35% to 21%, according to Senate Republican Leader Mitch McConnell
, speaking on Fox News
on Thursday. Biden proposes raising the corporate tax to 28%.
“If they’re willing to settle on a target infrastructure bill without revisiting the 2017 tax bill, we’ll work with them,” McConnell, R-Ky., told Fox’s Larry Kudlow, a former Trump adviser. However, McConnell, R-Ky., said a package worth $2 trillion or more “will not have any Republican support.”
According to two administration officials who spoke on the condition of anonymity to discuss the private talks on Friday, the meeting was constructive and hopeful.
According to officials, the new White House offer was intended to be a good faith effort at compromise, as well as to prod Republicans to make a more substantive counteroffer.
In previous talks, the administration expressed disappointment that there had been no movement from the GOP lawmakers' initial $568 billion offer.
According to a person who spoke on the condition of anonymity to discuss private negotiations, Republicans made “no significantly changed offer” during their meeting with the administration this week.
According to an administration official who was not authorized to publicly discuss the private conversations and spoke on the condition of anonymity, the White House's hopes for a bipartisan deal on infrastructure have cooled but they have not abandoned the effort.
According to aides, Biden has enjoyed the face-to-face negotiations and has expressed hope that Republicans will join him. West Wing officials have been encouraged by public comments made by some members of the GOP negotiating team, including Capito, the official said.
However, the outward signs of progress have not translated into the two sides getting much closer to a deal. Aside from the significant difference in the two sides' visions for the size of the package, there has been little discussion of how to pay for it.
One Republican senator in the talks suggested using unspent funds from the massive COVID-19
aid package to help pay for the infrastructure investment, as well as uncollected tax revenues or public-private partnerships.
One strategy that has gained traction is for Biden to negotiate a more limited, traditional infrastructure bill of roads, highways, bridges, and broadband as a bipartisan effort, after which Democrats could try to muscle through the remainder of Biden's priorities on climate investments and so-called human infrastructure of child care, education
, and hospitals on their own.
However, administration officials believe that if such a bipartisan “infrastructure-only” agreement is far smaller than Biden’s original proposal, the White House risks a Democratic revolt, claiming that the president made a bad deal and missed the opportunity to pass a comprehensive, transformative package.