President Joe Biden offered to cut the price of an infrastructure package to $ 1 trillion, but wants to make sure it is “new money” – not from funds already approved by Congress, as Republicans of the Senate said they have requested briefed a GOP source of the talks.
Biden also reiterated his request for new taxes to pay for much of his plan, the source said. But this latest attempt marks the first concrete proposal that would take into account the firmest Republican redline: amendments to the tax law of 2017.
Biden has raised the idea in previous private discussions of postponing its proposed funding mechanism – a series of corporate tax hikes, including a hike in the rate from 21% from 2017 to 28% – to address GOP concerns.
But the proposal put on the table at the meeting with West Virginia Republican Senator Shelley Moore Capito on Wednesday would explicitly avoid the issue, relying on and increasing tax enforcement instead, and introducing a minimum corporate tax of 15%, the target would have companies that have used loopholes to avoid paying a significant portion of the taxes, a source said.
The idea was developed explicitly so as not to cross the central GOP redline, the source added, and, coupled with a topline number down by more than $ 1 trillion, represents the clearest attempt at an upper bound between the two Bridging sides has hardly narrowed down despite weeks of discussions.
It was made clear, however, that the offer did not mean Biden abandoning his proposed corporate tax hikes entirely, the source said. Instead, it was specifically taken as part of the ongoing negotiations to pave a way forward. The government remains determined to push through Biden’s proposed tax hikes for businesses and wealthy individuals while pursuing the entirety of its $ 4 trillion economic agenda.
The offer made to Capito represents a $ 1.7 trillion reduction in the Biden administration’s latest proposal, but still represents a dramatic difference in new spending from the recent offer by the Republican senators. Capito and her group Senate Republicans have proposed a $ 928 billion infrastructure package, with $ 257 billion in new spending.
Two sources familiar with Wednesday’s discussion between Biden and Capito, who leads negotiations on behalf of the Republicans in the Senate, said any new infrastructure money would be over $ 400 billion over a five-year period, which is one Total equivalent to $ 1.4 trillion. The White House declined to comment.
On Wednesday, a White House official described the conversation as “constructive and frank,” and Republicans are considering making another counteroffer on Friday, one of the sources said.
The $ 1 trillion figure is in line with what Republicans claimed Biden got them privately, CNN reported. The White House has spoken out against diverting unused Covid-19 aid funds to pay for an infrastructure package, as the Republicans have proposed.
No ‘best and last’ offer
Biden’s intention on Wednesday was not to explicitly put a “best and last” offer on the table, a source familiar with White House strategy told CNN. Instead, he should underline that he was ready to slash his initial $ 2.3 trillion and try to pinpoint the payment method for the proposal, but only if Republicans deviated significantly from their latest offer.
The goal of the face-to-face meeting was to get a sense of where the broader Republican group would be poised to make up those differences, and to see Biden where Capito personally thought a deal might be struck.
Capito gave no indication that Republicans would be significantly relinquishing their positions, this source said, only that she would discuss the meeting with the other Republicans on her negotiating team, which she did on Wednesday night. Biden and Capito publicly announced that they will speak again on Friday.
In the White House, Biden’s meeting with Capito was considered the moment to find out what was actually possible. A prior meeting of the Oval Office with the Senate GOP group, sharing of proposals, and appraisal appraisals were all seen as part of the process to find out where – or if – there was room for an actual agreement, the source said. But the White House considers the window to this process closed, and Biden has made it clear that he wants to know if an outcome is possible. That was the origin of the Capito meeting, the source said.
White House officials admit Biden will leave the talks if a deal doesn’t go through isn’t exactly an easy option. The moderate Democrats have made it clear that they want the talks to continue and the Democrats cannot move anything unilaterally without their support. Important infrastructure elements should also not go through the budget procedure, which allows bills to be passed in the Senate with a simple majority. This is in part why White House officials have made it clear that they are also speaking to Republicans outside of the Capito group.
White House officials have pointed to June 9 of the House Land Transportation Act as a key date – it’s a central part of any infrastructure plan and could serve as a vehicle for a scaled-down deal with Republicans if a broader deal is sought in failure.
Capito briefed other Republicans
Capito’s communications director Kelley Moore said the West Virginia Republican was “encouraged that negotiations continue.” Capito briefed other Senate Republicans negotiating the infrastructure about the meeting at the White House.
“Senator Capito reaffirmed her desire to the president to work together to reach an infrastructure deal that can pass bipartisan congress,” the statement said. “She also highlighted the progress that the Senate has already made.”
The White House spokeswoman Jen Psaki had indicated earlier on Wednesday that the meeting with Capito would likely not be a “paper exchange” but “more of a discussion”. She also said that “at least part” of the meeting would be one on one, “if not the whole meeting”.
Transport Secretary Pete Buttigieg said over the weekend that there must be a “clear direction” in infrastructure talks until Congress returns from its hiatus next Monday.
Senate minority leader Mitch McConnell, a Republican from Kentucky, said Wednesday he hopes the GOP negotiations with the Biden administration over a huge infrastructure package will be successful and that Republicans believe the key to a deal therein insists on reusing large amounts of unspent funds that have been allocated to stimulate the economy during the Covid-19 pandemic.
This story and headline have been updated with additional reports.