White House press secretary Jen Psaki told reporters at a press briefing on Friday that President Joe Biden presented a $1.7 trillion counter-offer to Republicans, down from the $2.3 trillion plan Biden originally proposed.
The offer is a decrease of $550 billion from Biden's original offer, but the two sides are still "far apart."
The proposal reduces the president's original proposal for roads, bridges and other major infrastructure projects by $39 billion to get closer to the number presented by Republicans, as well as reducing funding for broadband infrastructure to $65 billion, matching the GOP figure.
The counter also shifts some spending proposals, such as for supply chains, manufacturing and for research and development, to other bills.
Psaki called the counter offer, which was presented at a meeting with Republicans and Biden administration officials, “the art of seeking common ground.”
"This proposal exhibits a willingness to come down in size, giving on some areas that are important to the President,” she added.
But the proposal makes clear that President Biden is not interested in the Republicans’ idea of having consumers pay for the new investments through tolls, gas taxes or other fees. Instead, the administration is sticking with his proposal to raise the corporate tax to pay for the new investment, which is a red line for Republicans.
Republicans panned the offer, describing it as "well above the range of what can pass Congress with bipartisan support" in a statement issued after the meeting.
"There continue to be vast differences between the White House and Senate Republicans when it comes to the definition of infrastructure, the magnitude of proposed spending, and how to pay for it," the statement continued. "Based on today's meeting, the groups seem further apart after two meetings with White House staff than they were after one meeting with President Biden."
But Republicans dismissed the new White House offer as “disappointing,” according to a GOP aide familiar with the meeting and permitted anonymity to discuss it.
The Republicans viewed the changed approach as “very marginal movement” on the topline and without much difference in policy, the aide said.
The slog of the negotiations is certain to mean new worries from Democrats that time is slipping to strike a compromise. The president’s team is holding to a soft Memorial Day deadline it had set to determine whether a deal was within reach.
The White House characterized the GOP’s initial $568 billion “Roadmap” proposal as amounting to an estimated $175 billion to $225 billion in “new investment, above current levels Congress has traditionally funded,” according to a memo obtained by The Associated Press.
The GOP senators have not publicly disclosed their latest offer.
Republican Congressional leadership, along with House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer, met with President Biden and Vice President Kamala Harris to discuss infrastructure last week.
House Minority Leader Kevin McCarthy and Senate Minority Leader Mitch McConnell expressed that the meeting was productive and were somewhat optimistic about a compromise, but noted that their “red line” is raising taxes by overhauling the changes made in the 2017 tax law, one of the signature legislative achievements of the GOP in the last decade.
"We're not interested in reopening the 2017 tax bill,” McConnell said outside the White House after the May 12 meeting. “We both made that clear to the president. That's our red line.”
“You won't find any Republican that will go and raise taxes and that's the worst thing you can do in the economy — when you are watching inflation, gas prices are going up, and it has not been this high since President Biden was vice president,” McCarthy said.
Senate Republican leader Mitch McConnell said Thursday on Fox News that higher taxes on corporations or the wealthiest Americans are nonstarters. Republicans are unwilling to undo the 2017 tax cuts, the party’s signature domestic accomplishment under President Donald Trump. They reduced the corporate rate from 35% to 21%. Biden proposes lifting the corporate tax to 28%.
“If they’re willing to settle on target a infrastructure bill without revisiting the 2017 tax bill we’ll work with them,” McConnell told Fox’s Larry Kudlow, a former Trump adviser. But McConnell, R-Ky., said a package topping $2 trillion or more “is not going to have any Republican support.”
McConnell said in an interview with Kentucky’s PBS station Kentucky Educational Television days earlier that “the proper price tag for what most of us think of as infrastructure is about $600-800 billion,” signaling a willingness to go higher than the $568 billion figure proposed by Senate Republicans led by West Virginia Sen. Shelly Moore Capito.
Sen. Capito’s counter-proposal calls for $299 billion for roads and bridges, $20 billion for railroads, $61 billion for public transit systems and $65 billion toward broadband infrastructure.
Biden’s $4 trillion spending plan is split into two pieces — about $2.3 trillion for traditional infrastructure, as well as funding for areas like the home health care industry, schools and child care facilities, and $1.8 trillion on what is referred to as “human infrastructure,” including free community college, universal preschool and a comprehensive paid leave program.
But the Kentucky Republican recently said in early May that he did not think “there will be any Republican support” for Biden’s plan, which he slammed as a “$4.1 trillion grab bag which has infrastructure in it but a whole lot of other stuff.”
“If it's going to be about infrastructure, let's make it about infrastructure,” he said on May 3.
The White House’s hopes for a bipartisan deal on infrastructure have cooled but they have not abandoned the effort, one of the officials said.
Biden has reveled in the face-to-face negotiations, aides said, and has expressed hope to bring Republicans along. West Wing officials have been hearted by the public comments made by some of the GOP negotiating team, including Capito, the official said.
But the outward talks of progress have not translated into the two sides getting much closer to a deal. Beyond the significant gap in the two sides’ visions for the size of the package, there has been little discussion of how to reach an agreement on how to pay for it.
One GOP senator in the talks suggested tapping unspent funds from the massive COVID-19 aid package to help pay for the infrastructure investment. Other funds could be tapped from uncollected tax revenues or public-private partnerships.
One strategy that had gained momentum would be for Biden to negotiate a more limited, traditional infrastructure bill of roads, highways, bridges and broadband as a bipartisan effort. Then, Democrats could try to muscle through the remainder of Biden’s priorities on climate investments and the so-called human infrastructure of child care, education and hospitals on their own.
But, administration aides believe, if such an “infrastructure only” bipartisan deal is far smaller than Biden’s original proposal, the White House risks a rebellion from Democrats who could claim that the president made a bad deal and missed the moment to pass a sweeping, transformational package.
The Associated Press contributed to this report.