The bipartisan infrastructure deal that President Joe Biden hopes to reach with Republicans gained steam this week, after Biden displayed willingness to narrow the scope of the bill to traditional infrastructure items and to compromise on various ways to pay for them.
In meetings at the White House with key Democratic and Republican senators, the president made it clear that he is willing to divide his mammoth infrastructure proposal, the $2.3 trillion American Jobs Plan, into separate bills in order to pass the first part of the package with bipartisan support in the Senate.
“I want to get a bipartisan deal on as much as we can get a bipartisan deal on,” Biden told MSNBC’s Lawrence O’Donnell in an interview Wednesday. “That means roads, bridges, broadband, all infrastructure.”
“Let’s see if we can get an agreement to kickstart this, and then fight over what’s left, and see if I can get it done without Republicans, if need be,” said Biden.
DThe starting point for negotiations this week was the $568 billion “Republican Roadmap” infrastructure plan, unveiled in April by West Virginia Sen. Shelley Moore Capito, the ranking member on the Senate Environment and Public Works Committee.
kickstart this, and then fight over what’s left, and see if I can get it done without Republicans, if need be,” said Biden.
The starting point for negotiations this week was the $568 billion “Republican Roadmap” infrastructure plan, unveiled in April by West Virginia Sen. Shelley Moore Capito, the ranking member on the Senate Environment and Public Works Committee.
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Even before talks began, Senate Minority Leader Mitch McConnell said Sunday that Republicans would be open to spending up to $800 billion on an infrastructure package. His remarks telegraphed to the White House that Republicans were open to going beyond what was outlined in the road map.
On Thursday, six senior Republican senators delivered the same message to Biden at a key meeting, led by Moore Capito. At the outset, Biden said that he was “prepared to compromise.” The senators were ready to talk nuts and bolts.
The senators attending the Oval Office meeting all serve as ranking members on committees with jurisdiction over infrastructure. In addition to Moore Capito, the meeting included Sens. John Barrasso of Wyoming, Roy Blunt of Missouri, Mike Crapo of Idaho, Pat Toomey of Pennsylvania and Roger Wicker of Mississippi.
Over the course of 90 minutes, Moore Capito said, the group discussed specific infrastructure items and Biden asked them to return next week with a revised offer that he could then counter. The White House said Friday that Biden expects the GOP counterproposal by Tuesday.
“We’re very encouraged, we feel very committed to the bipartisanship that we think this infrastructure package can carry forward,” she added.
A bigger bill later
As Republicans prepare a second offer in the coming days to deliver to Biden, there’s a growing acceptance among Democratic lawmakers of Biden’s preference for passing a trimmed-down, bipartisan infrastructure bill first and then a much bigger domestic spending bill, likely without Republican votes, after that.
In addition to passing what had been left out of the American Jobs Plan, Democrats would also look to incorporate the second part of Biden’s domestic agenda, the $1.8 trillion American Families Plan, into a bill they would pass on a straight party-line vote.
This second piece includes funding for two years of free universal pre-K and two years of free community college, subsidizing child care for middle-class families and expanding paid family leave and child tax credits. This is also where tax increases on both corporations and the wealthiest Americans would most likely be enacted.
“From the Democrats’ point of view, what doesn’t happen now will happen later,” said Matt Bennett, a co-founder of Third Way, a centrist Democratic think tank. “They’ll be able to take a big win on this bipartisan deal and then pass the rest of the agenda later this year on budget reconciliation.”
“A year from now, what the public will remember is that Biden led off with a bipartisan infrastructure deal,” said Bennett. “No one’s going to say, ’Well, this bit of spending was in the bipartisan bill, and that bit was in the reconciliation bill. It’s all going to be Biden’s agenda.”
Tax questions
As Democrats gradually get used to the idea of a bipartisan deal first and a bigger bill later, it also becomes easier for the White House to compromise on its initial plan to use corporate tax hikes to pay for much of the infrastructure spending.
In its place, Democrats are increasingly open to paying for a pared-down infrastructure plan through a mix of revenue generators, including user fees and bonds. On Thursday, Sen. Mark Warner, D-Va., told Axios that user fees “have to be part of the mix.”
User fees remain a sticking point, though. The White House said Friday that Biden would consider user fees a violation of his pledge not to raise taxes on those making less than $400,000 a year.
Avoiding a corporate tax increase would have the advantage of all but guaranteeing that the bill would win support from 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 his members strongly support Biden’s plan to invest heavily in infrastructure. But he said raising the corporate tax rate would do more harm than good.
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“We’ve presented other options,” said Timmons, “such as public-private partnerships, user fees, and bonds for the financing of very large infrastructure investments.”
Stepping back, it’s possible to see the outlines of what a compromise bill might look like, provided both Democrats and Republicans can continue moving closer to one another’s priorities.
This means that Republicans keep increasing the size and scope of their offer, Biden agrees to limit the bill to hard infrastructure only, and Democrats agree to fund it by some other means.
Both Biden and Republicans say they want to move swiftly, and they’ve set Memorial Day as an informal deadline for making real progress.
That’s in a little more than two weeks.
