President Joe Biden rebuffed the latest Republican infrastructure counteroffer that would moderately increase spending, arguing it does not meet his "objectives to grow the economy, tackle the climate crisis, and create new jobs," the White House said.
Mr. Biden's reaction indicates that ongoing negotiations between the president and a group Republican senators may soon come grinding to a halt, as there remain significant differences over the cost of an infrastructure proposal, as well as how it should be funded.
The White House released a readout of a call between Mr. Biden and GOP Senator Shelley Moore Capito, the lead Republican negotiator, on Friday afternoon. Although the two are expected to speak again on Monday, it's unclear whether there is any further progress to be made. Capito's office also provided a readout of the discussion on Friday.
Press Secretary Jen Psaki said Capito offered a roughly "$50 billion increase in spending across a number of infrastructure programs" in the meeting with Mr. Biden on Friday. Capito and her group had previously proposed a $928 billion counteroffer with $257 billion in new spending, well short of the $1.7 trillion sought by the president.
"The President expressed his gratitude for her effort and goodwill, but also indicated that the current offer did not meet his objectives to grow the economy, tackle the climate crisis, and create new jobs. He indicated to Senator Capito that he would continue to engage a number of Senators in both parties in the hopes of achieving a more substantial package," Psaki said.
Republicans have balked at the cost of Mr. Biden's offer, and rejected his proposal to pay for it by raising the corporate tax rate from 21% to 28%, as they have no interest in undoing the 2017 tax cut legislation signed by former President Donald Trump. In a meeting with Capito in person at the White House on Wednesday, the president emphasized portions of his plan that would be funded through corporate taxes, such as setting a 15% minimum tax on the nation's most profitable companies. However, this also seems likely to be opposed by Republican lawmakers, who may view it as an unnecessary tax hike.
Republicans have suggested using unspent funds from previous coronavirus relief measures to pay for infrastructure legislation, but this has largely been rejected by the White House.
Mr. Biden did suggest repurposing up to $75 billion in monies from coronavirus relief measures that passed before the American Rescue Plan, Psaki said on Thursday, but she noted that the "vast majority of these funds are allocated."
Mr. Biden also spoke with House Transportation and Infrastructure Chair Peter DeFazio, the White House said, after DeFazio on Fridaythat would cost $547 billion over five years, focused on roads, transit and passenger and freight rail.
"The President also spoke to Chairman DeFazio to thank him for all his hard work on key elements of the American Jobs Plan, and to offer his support for the Committee mark-up that Chairman DeFazio will begin on Wednesday," Psaki said. "The President and Chairman DeFazio agreed on the benefits of continued engagement with Democratic and Republican Senators as the House work on infrastructure advances this coming week."
The legislation does not include any means to pay for it, since that is not part of the committee's jurisdiction. The committees that write congressional funding measures, House Ways and Means and Senate Finance, have not yet proposed ways of funding the infrastructure bills.
The new bill introduced by DeFazio indicates that Democrats may be willing to move forward without Republican support if necessary.
Senate Democrats are already laying the groundwork to pass the larger infrastructure package through Congress using budget reconciliation, a process that would allow the measure to pass without any Republican votes. Senate Majority Leader Chuck Schumer indicated last week that the Senate would move forward with infrastructure legislation in July, regardless of whether Republicans and Democrats are able to come to an agreement.