United States President Joe Biden points to Senator Shelley Capito (R-WV) during an infrastructure meeting with Republican Senators at the White House in Washington on May 13, 2021.
Kevin Lamarque | Reuters
WASHINGTON – The bipartisan infrastructure deal that President Joe Biden seeks to reach with Republicans gained momentum this week after Biden showed his willingness to limit the scope of the bill to traditional infrastructure elements and compromise on various payment methods.
In meetings at the White House with key Democratic and Republican senators, the president made it clear that he was ready to split his mammoth infrastructure proposal, the US $ 2.3 trillion employment plan, into separate bills to cover the first part of the package to adopt bipartisan support in the Senate.
“I want to do as much as possible in a non-partisan way,” Biden said Wednesday in an interview with MSNBC’s Lawrence O’Donnell. “That means roads, bridges, broadband, all infrastructure.”
“Let’s see if we can reach an agreement to get this started and then argue over what’s left and if I can do it without a Republican,” Biden said.
The starting point for negotiations this week was the $ 568 billion Republican Roadmap infrastructure plan unveiled in April by West Virginia Senator Shelley Moore Capito, senior member of the Senate’s environmental and public works committee.
Read more about CNBC’s political coverage:
Even before the talks began, Senate Minority Chairman Mitch McConnell said Sunday that Republicans were ready to spend up to $ 800 billion on an infrastructure package. His remarks cabled the White House that Republicans were ready to go beyond what was set out in the roadmap.
On Thursday, six senior Republican Senators delivered the same message to Biden at an important meeting led by Moore Capito. At the outset, Biden said he was “willing to compromise”. The senators were ready to talk about anything.
The senators attending the Oval Office meeting all serve as senior members on committees responsible for infrastructure. In addition to Moore Capito, Sens. John Barrasso from Wyoming, Roy Blunt from Missouri, Mike Crapo from Idaho, Pat Toomey from Pennsylvania and Roger Wicker from Mississippi attended the meeting.
Within 90 minutes, said Moore Capito, the group discussed certain infrastructure elements and Biden asked them to come back next week with a revised offer that he could counter. The White House said Friday that Biden expects the GOP’s counter-proposal by Tuesday.
“We are very encouraged and committed to the non-partisanship that we believe is possible with this infrastructure package,” she added.
A bigger bill later
As Republicans prepare a second bid for delivery to Biden in the coming days, there is growing acceptance among Democratic lawmakers of Biden’s preference to pass a truncated, bipartisan infrastructure bill first, and then a much larger domestic spending bill, likely with no Republican votes. after that.
In addition to getting what was left out of the American employment plan, the Democrats would also seek to incorporate the second part of Biden’s domestic agenda, the $ 1.8 trillion American family plan, into a bill they passed through direct Party line would vote.
This second piece includes funding for two years of free universal Pre-K and two years of free community college, subsidizing childcare for middle class families, and expanding paid family vacation and tax credits for children. It would most likely also see tax increases for businesses and the richest Americans.
“From a Democratic perspective, what doesn’t happen now will happen later,” said Matt Bennett, co-founder of Third Way, a centrist Democratic think tank. “You will be able to make a big win on this bipartisan deal and get the rest of the budget vote agenda through later this year.”
“In a year from now, the public will remember that Biden started a bipartisan infrastructure deal,” said Bennett. “Nobody is going to say, ‘Well, those expenses were included in the bipartisan bill, and those parts were included in the reconciliation bill. It will all be Biden’s agenda.”
As Democrats get used to the idea of a bipartisan deal and later a bigger bill, it will also become easier for the White House to compromise its original plan to use corporate tax increases to pay for much of its infrastructure spending.
In its place, Democrats are increasingly open to paying for a reduced infrastructure plan through a mix of sources of income, including usage fees and bonds. On Thursday, Senator Mark Warner, D-Va., Told Axios that usage fees “need to be part of the mix.”
However, the usage fees remain a sticking point. The White House said Friday that Biden would view the usage fees as a violation of his promise not to levy taxes on those who earn less than $ 400,000 a year.
Avoiding a corporate tax hike would have the benefit of having the bill backed by key industry groups such as the U.S. Chamber of Commerce and the National Association of Manufacturers.
Jay Timmons, CEO of NAM, told CNBC’s Squawk Box on Friday that its members strongly support Biden’s plan to invest heavily in infrastructure. But he said increasing the corporate tax rate would do more harm than good.
“We presented other options,” said Timmons, “such as public-private partnerships, user fees and bonds to fund very large infrastructure investments.”
As you step back, you can see the outline of what a compromise law might look like, provided both Democrats and Republicans can continue to approach each other’s priorities.
This means that Republicans continue to expand the size and scope of their offering, Biden agrees to limit the bill to hard infrastructure only, and Democrats agree to fund it in other ways.
Both Biden and Republicans say they want to act quickly, and they have set Memorial Day as the informal deadline to make real progress.
That’s in a little over two weeks.