One of the principal sticking points in the weeks-long infrastructure talks between the White House and Senate Republicans is financing: officials fundamentally disagree on how to pay for the investments. President Biden and Democrats want to raise taxes on the wealthy and big corporations -- a step the GOP refuses to consider -- while Republicans are eyeing increases in the gas tax and other user fees, which the White House has rejected.
But just as fundamental is the conflict over the topline question: how much will the infrastructure package cost? Biden's initial blueprint called for $2.25 trillion in investments, though as CNBC reported this afternoon, that price tag is now shrinking.
White House aides working on a bipartisan infrastructure deal made a counteroffer on Friday to Republican senators, reducing their initial proposal by $600 billion. The latest offer would cost $1.7 trillion over a decade, White House press secretary Jen Psaki said.
Psaki told reporters, "This proposal exhibits a willingness to come down in size, giving on some areas that are important to the president."
Republicans appeared unimpressed, with one GOP official saying the new offer was "not an encouraging one." The Washington Post reported that one Republican insider said the White House's proposed decrease "is not as steep as it appears, reflecting efforts by the Biden administration to just shift spending to other legislative packages."
There's some truth to that. While on the surface it appears Biden is prepared to slash the cost of his package by roughly a fourth, there's some budgetary shifts underway: the new offer proposes cuts, for example, to the research investments in the original plan, but there's some other new research spending in a different bill pending in the Senate.
But the GOP appears to be budging even less. The Associated Press reported this morning that the latest Republican infrastructure proposal "left some dismay in the administration that there wasn't more movement off the Republicans' initial $568 billion proposal." The Post's report added:
The fresh wrinkles threatened to end the week on a disappointing political note after a flurry of recent negotiations between the White House and its Republican counterparts, which last met during an hour-long meeting in the Capitol on Tuesday. In that exchange, Senate Republicans presented their own revised figures that weren't substantively different from their previous offer, either, people familiar with the matter said.
Sen. Shelley Moore Capito (R-W.Va.), who's taken a leading role in the negotiations, told Bloomberg News this week that the prospects for a breakthrough deal on a bipartisan infrastructure package are greater than 50%.
I'm finding that increasingly difficult to believe, given that the parties are not close in how much to invest or how to pay for the investments. The more realistic take is that Democrats will either rely on the reconciliation process or the entire infrastructure initiative will die.
Update: A group of GOP senators responded to the offer with a written statement that read in part, "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."