Earlier today, bipartisan negotiations over President Biden’s proposed infrastructure bill fell after both parties were unable to resolve their different views on how large should the bill be and how should be funded. Biden had started negotiations with Senator Shelley Moore-Capito (R-WV) a few weeks earlier after both the GOP and the administration had proposed their plans on an infrastructure package.
Both the White House and the office of Senator Capito issued statements lamenting the breakdown on negotiations while pinpointing the other side as the one to blame over the falling of the bipartisan negotiations, as part of the usual political posturing that is traditional to any failed political negotiation.
White House Press Secretary Jen Psaki announced that Biden told Capito that the offer from the GOP didn’t “meet the essential needs of our country” on physical infrastructure, job creation, and clean energy. Psaki also said Biden was disappointed that while the administration was willing to reduce the price-tag on their package by $1 billion, Republicans were only willing to raise $150 billion more on their initial counteroffer, although the GOP almost doubled the price tag of their original counterproposal.
Psaki also left the door open for further bipartisan negotiations, only that led by another group of senators. However, the White House has left very clear that they will neither accept a tax increase on families earning less than $400,000 a year nor “accept inaction as an outcome”.
Capito disputed the narrative set by Psaki and the White House, saying she was “disappointed” by Biden’s decision to end the negotiations. Capito, who is one of the most bipartisan senators, said that the GOP was willing to meet the President’s threshold of a $1 billion dollar bill.
The latest Republican counteroffer included almost $1 trillion on investment in infrastructure. Including $506 billion on roads and bridges, $98 billion on public transportation systems, $46 billion on rails, $21 billion on safety, $22 billion on ports, $56 billion on airports, $65 billion on broadband, $72 billion on water infrastructure, among other projects.
However, according to Capito, all of the President’s offers included tax increases as he denied any other type of funding to the program that would not be “harmful for individuals, families, and small businesses”. The issue of taxing was significant to the collapse of the negotiations as one of the red lines of the Republicans was to prevent any repeal of the tax cut passed by the Trump administration in 2017.
Capito also left the door open for a possible future bipartisan agreement, highlighting that the EPW Committee of the Senate has already made progress on the issue of infrastructure by marking up a couple of bills related to water infrastructure
Why did the bipartisan infrastructure negotiations failed and what now?
Both sides left it very clear that they were very far away from an agreement on the issue of how to fund the bill and the size of it or even the definition of Infrastructure. Democrats are aiming for a massive bill, proposing billions of dollars to fund sectors of the economy that are not traditionally associated with Infrastructure (like $400 billion in elder care) which would be partly funded via an increase in the corporate tax rate to 28%, effectively undoing part of the 2017 tax cut.
Republicans held very different ground on both of these issues, they vehemently opposed much of the funding to proposals that did not adhere to the more traditional definition of infrastructure (actual buildings) and would never agree to an effective overturn of the 2017 tax plan. Even if the divide over which types of projects to fund were to be bridged, it appears that the issue of funding would still be the sticking point on any type of negotiation between both parties.
Although the end of the talks between Capito and Biden do land a heavy blow over the prospects of a bipartisan agreement, there are still some roads that both parties could use if a deal is to be reached. Biden has said he will now meet a different group of senators to see if a deal can be reached, with the Washington Post reporting that the President talked with Senators Romney (R-UT), Cassidy (R-LA), Synema (D-AZ), and Manchin (D-WV) to look for an alternative deal.
However, the reality is that a broad bipartisan agreement on infrastructure is increasingly looking like a pipe dream. If Biden wants to avoid a filibuster, he would need to convince 10 Republicans to sign on a deal, a tall order especially if he does not count with the blessing of the GOP Senate leadership. Which is why Senate Majority Leader Chuck Schumer (D-NY) has said they are already preparing a reconicliation package where only Democratic votes are needed.
Progressives are beginning to lose patience with the bipartisan chatter coming from the White House and are pushing hard for a straight partisan bill passed through the reconciliation process. However, even that approach will be difficult for Biden, as he will need every single Democrat to agree with a single package, and Manchin has already voiced his hesitance to using the reconciliation process to pass the infrastructure project.
Although support for an infrastructure bill is overwhelmingly popular in both parties, which would make it theoretically easy to find common ground, it is looking increasingly likely that Biden will have to resort to try and pass his pet project bill via a straight partisan vote this summer.