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28 May 2021
3 min read

Republicans Present a $928 Billion Infrastructure Counter-offer

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Key Takeaways

  • GOP Senators propose a $928bn offer as a latest effort to narrow the gap with the White House
  • President Joe Biden aims to pass the infrastructure legislation by the summer

Senate Republicans unveiled a $928bn infrastructure plan to the White House on Thursday in efforts to close the gap with President Biden’s $1.7tn proposal. The GOP proposal is the latest move in the negotiation process with the Biden administration as both sides are rushing to make progress over the discussion before Memorial Day on Monday.

The $928bn offer is an increase from the initial plan of the Republicans who first presented a proposal worth $568bn. The Republican offer, according to a one-page summary released by the GOP negotiators, would increase spending by $91bn on roads and bridges, $48bn on water-related projects, and $25bn on airports.

The negotiations, which have lasted for months, are at their closest point to being finalized and both parties believe they could reach an agreement, even if that means extending the talks into June. “It’s a serious effort to try to reach a bipartisan agreement,” said Sen. Shelley Moore Capito, the lead GOP negotiator.

“We recognize that your most recent offer leaves us far apart and, coupled with your Memorial Day deadline, leaves little time to close the gap,” Republican negotiators wrote in a memo to President Biden on Thursday. Mr. Biden had to trim down his offer by $600bn to $1.7tn from the original amount of $2.3tn to seek bipartisan support because Republicans argued the plan was too broad.

Bipartisan Support Urgently Required

Still, even at the current size of $928bn, the plan would leave a fair number of lingering issues to deal with. White House press secretary Jen Psaki said the Biden administration is particularly concerned about some elements of the plan, such as repurposing Covid-19 aid. In addition, the GOP plan lacks funding for veterans’ hospitals.

“We’re going to have to close this down soon,” President Biden told reporters on Thursday, referring to the talks over the infrastructure bill. The White House aims to pass the bill before the end of summer without the President setting an official deadline.

Major differences threaten to derail the progress and potentially delay the passing of the bill. Democrats have included items in the plan which Republicans argue shouldn’t be considered infrastructure. These items include $400bn for caring for the elderly and disabled. The White House has reiterated numerous times, even after Republicans had openly disagreed, that this funding should remain in the plan.

The biggest issue, however, in reaching a bipartisan agreement, is how to finance the big-ticket spending. The plan, proposed by the Senate Republicans does not mention a specific way to cover the full cost of the spending. One way, according to GOP negotiators, is to use unspent funds from the already approved coronavirus relief package to pay for some of the infrastructure costs.

Mr. Biden, supported by Treasury Secretary Janet Yellen, has proposed paying for the plan by raising the corporate tax rate to 28% from 21%. Republicans have said they are not going to support any form of tax increase.

Some Democrats doubt a bipartisan agreement is possible and have not ruled out the possibility of passing the legislation without GOP support. Given the narrow control of the House and the Senate, Democrats could use a budget maneuver known as reconciliation to approve the infrastructure bill.

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