Biden, Republicans hit ‘a brick wall’ in compromise infrastructure talks

It’s onto Plan B on infrastructure. Or is it Plan M? Or maybe even Plan Z?

President Joe Biden changed course after Sen. Shelley Capito, the leader of a group of six Senate Republicans handling bipartisan negotiations, offered $330 billion in new spending on infrastructure.

That seemed measly compared with Biden's reduced $1.7 trillion offer. Biden had originally proposed $2.25 trillion in national improvements. In order to pay for it, Biden’s “American Jobs Plan” includes raising the corporate tax rate to 28 percent, which is still lower than the 35 percent it has been for the last decade or so.

“He informed Sen. Capito that the latest offer from her group did not, in his view, meet the essential needs of our country,” White House press secretary Jen Psaki said in a statement.

Sen. Majority Leader Chuck Schumer, D-N.Y., was even more blunt. He said simply the talks “had hit a brick wall.”

Now there seem to be two roads to infrastructure. One is crafting another compromise with another group of Republican senators. Another is through “reconciliation,” that Senate budget process that allows revenue-related bills to pass with a simple majority. The Democrats hold a slim 50-50 edge in the Senate, thanks to Vice President Kamala Harris’s tiebreaking vote.

Leading Democrats are floating the idea of passing a smaller-scale, bipartisan infrastructure bill with nominal Republican support. Then they would follow that with a larger, Democratic-only bill that expands upon it and includes most of what the president is pushing.

“It may well be that part of the bill that will pass will be bipartisan and part of it will be through reconciliation,” Schumer said at his June 8 weekly briefing. “But we’re not going to sacrifice bigness and boldness in this bill. We will just pursue two paths and at some point they will join.”

Instead of dealing with Capito’s group, Biden reportedly contacted Sen. Bill Cassidy, R,-La., and recalcitrant Democratic Sens. Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona to discuss infrastructure. Those talks were scheduled to begin in earnest in mid-June following the president’s European trip.

“I'm working hard to find common ground with Republicans when it comes to the American Jobs Plan, but I refuse to raise taxes on Americans making under $400,000 a year to pay for it,” Biden wrote on Twitter on June 8. “It's long past time the wealthy and corporations pay their fair share.”

The collapse of compromise talks with Sen. Capito was a setback to the president’s attempt to attract Republican support for his top domestic priority. Most Republicans have said they are willing to spend only a fraction of what Democrats want on a much narrower definition of what “infrastructure” actually means.

Republicans are loath to increase any taxes to pay for anything. This intransience comes despite a recent report that the 25 richest Americans, including such household names as Amazon founder Jeff Bezos and Tesla founder Elon Musk, have paid little or no U.S. income tax in recent years.

In a senatorial version of he-said-she-said, Sen. Capito said it was Biden who had been unwilling to compromise.

“While I appreciate President Biden’s willingness to devote so much time and effort to these negotiations, he ultimately chose not to accept the very robust and targeted infrastructure package, and instead, end our discussions,” the West Virginia Republican said in a statement.

Republicans by far want a narrower view of infrastructure. For his part, Biden wants the nation to “think big” and include such things as broadband access, insulation of homes and public buildings and other benefits association with climate and poorer people.

“Any infrastructure package should and must be bipartisan,” Mr. Cassidy said on Twitter. He said he had proposed “flood resiliency and energy provisions” with the president during their phone conversation.

If Democrats decide to use the fast-track budget process known as reconciliation, they wouldn’t need any Republican support. But they would need all 50 Democrats in the Senate and nearly all House Democrats.

Business leaders expressed disappointment in the collapse of the Biden-Capito talks. “But plans for ongoing bipartisan discussions are encouraging,” Business Roundtable President & CEO Joshua Bolten said in a statement.

“We believe Congress and the Administration can craft a bipartisan infrastructure package that invests in highways, water systems, energy and communications, meets the needs of the economy and has real benefits for working Americans,” Bolten added.

A bipartisan, regular-order process is the “only way” to achieve policy changes that would allow for long-term funding certainty, unleash private capital and allow responsible regulatory streamlining, Bolten added.

“We appreciate the work of Sen. Capito and the administration in these discussions, and we encourage the bipartisan group of Senators and others to seize on the forward progress created. As negotiations continue, we urge lawmakers to craft a deal that ensures infrastructure investments create jobs and generate sustained economic growth.”

Meanwhile, the House of Representatives Committee on Transportation and Infrastructure unveiled its five-year, $547 billion surface transportation reauthorization bill on June 4. It is dubbed the Investing in a New Vision for the Environment and Surface Transportation in America, or INVEST in America Act. It would replace the current highway bill that expires Sept. 30.

“AASHTO strongly encourages Democrats and Republicans in the House and Senate to work together to enact a bipartisan reauthorization bill by September 30 that maintains current formula-based funding to states as the foundation of the federal surface transportation program,” Jim Tymon, executive director of the American Association of State Highway and Transportation Officials (AASHTO) said in a statement.