WASHINGTON -- The White House on Friday rejected a new counteroffer from Senate Republicans on funding for an infrastructure overhaul, saying the party's latest proposal -- which included an additional $50 billion in spending -- marked a welcome move, but one that still falls far short of what President Joe Biden is seeking.
"Now is the time to build on the progress we've made," Biden told reporters in Rehoboth Beach, Del. "We need to make those investments today to continue to succeed tomorrow."
With billions of dollars still separating the two sides, the exchange capped off a week of tense negotiations that increasingly have left Democratic and GOP lawmakers unsure on whether they are going to be able to broker a bipartisan deal to improve the nation's roads, bridges, pipes, ports and internet connections.
In total, Republicans now appear to have offered to spend nearly $980 billion on infrastructure. More than $300 billion of that amount appears to represent new federal investments, with the rest reflecting existing or expected spending as part of regular congressional efforts to fund improvements in water and transportation.
Biden has signaled he is open to slimming down his package, known as the American Jobs Plan, to about $1 trillion from its initial $2.3 trillion price tag. But the president also has maintained that infrastructure spending should include entirely new investments -- meaning the gap between Democrats and Republicans is much wider than it appears.
White House press secretary Jen Psaki confirmed the details of the GOP's latest offer in a statement Friday after Biden spoke by phone with Sen. Shelley Moore Capito, R-W.Va. "The president expressed his gratitude for her effort and goodwill, but also indicated that the current offer did not meet his objectives to grow the economy, tackle the climate crisis and create new jobs," she said.
The White House said Biden told Capito that he would "continue to engage a number of senators in both parties in the hopes of achieving a more substantial package."
Capito's office confirmed the call but declined to provide details.
Both sides said they planned to resume talks Monday, with Congress set to return from its recess.
The overall price tag of an infrastructure package represents only one of the many disagreements still separating Democrats and Republicans over new public-works spending. The sides still cannot come to terms on what infrastructure fully entails, much less how the government should finance the investments.
Both sides have sought to make some concessions -- with the GOP raising the initial cost of its plan and the White House signaling it is willing to put aside some of its most controversial tax increases if only for the moment. But the entreaties have hardly bridged the divide, prompting top White House aides to emphasize in recent days that the clock is ticking.
Psaki earlier Friday declined to set a deadline or specify that the talks are at their end. "There's runway left," she said at a news briefing. "We're going to keep a range of pathways open."
However, she added, there are some "realities of timelines."
That includes ongoing work in the House and Senate to reauthorize a series of key federal transportation programs, an effort long seen as a potential vehicle for a broader infrastructure deal.
Earlier in the day, Rep. Peter DeFazio, D-Ore., leader of the House Transportation and Infrastructure Committee, released a $547 billion plan to fund the nation's roads and railways. The panel is set to begin considering the measure next week.
DeFazio said in an interview that his proposal incorporates "many of the new and novel programs and objectives" that Biden sketched out in his jobs plan, including the president's desire to couple new transportation spending with efforts to combat climate change. He said he felt it was important for infrastructure reform to proceed on essentially two tracks, adding: "I think it is essential that the president continues to engage meaningfully with the Senate."
DeFazio's legislation doesn't address how to pay for the projects. He called the effort a "once-in-a-generation opportunity to move our transportation planning out of the 1950s and toward our clean-energy future."
His bill would authorize up to $343 billion for roads, bridges and safety improvements. Another $109 billion would go to public transit programs, and $95 billion would go to freight and passenger rail systems, including a tripling of funding for Amtrak.
OTHER MEASURES
DeFazio's bill is not expected to attract much GOP support, as Republicans unveiled their own legislation recently that would authorize about $400 billion over five years for road, bridge and transit programs.
Republicans on the House panel criticized the Democratic legislation in a statement: "Instead of working with Republicans to find common ground on a bill that could earn strong bipartisan support ... this bill moves even further to the left to appease the most progressive members in the Majority's party."
Biden called DeFazio on Friday to thank him for his work "on key elements of the American Jobs Plan," Psaki said, adding that they agreed on the benefits of continuing to engage both Democratic and Republican senators.
Business groups such as the U.S. Chamber of Commerce and the Business Roundtable have called on lawmakers to continue negotiations and work toward a bipartisan compromise.
But Biden's talks have begun to trouble some Democrats, who in recent days have urged the White House to hold firm on its infrastructure ambitions -- and seize on its narrow but potent majorities in Congress to see a bill through to passage.
They support using a process that would allow Democrats to pass an infrastructure boost with a simple majority, as they did with the covid-19 relief measure that delivered $1,400 payments to most Americans.
"Getting Republicans on board is not necessary. Getting the American people back on their feet is," said Rep. Jamaal Bowman, D-N.Y.
"If what I'm reading is true, I would have a very hard time voting yes on this bill," said Bowman, a member of the Congressional Progressive Caucus, adding in a tweet that the $2 trillion package Biden initially put forward "was already the compromise." "POTUS can't expect us to vote for an infrastructure deal dictated by the Republican Party," he added.
"Hmm. When the GOP passed legislation to provide a $1 trillion tax break to corporations & the 1% without a single Democratic vote, I didn't hear my Republican colleagues say 'Wait. It has to be bipartisan,'" Sen. Bernie Sanders, I-Vt., tweeted Friday. "Please don't tell me we can't use the same tools to help working people."
CORPORATE MINIMUM
Biden has pitched the idea of a 15% minimum tax on U.S. corporations, along with strengthened IRS enforcement efforts, as a way to fund a bipartisan infrastructure package, according to a person familiar with the discussions.
The proposal sets aside the administration's proposal to raise the headline corporate income tax rate to 28% from 21% -- a nonstarter for Republican lawmakers -- though that could be pursued elsewhere, the person said.
Under the pitch to Republicans, companies that have lots of tax credits and deductions would be required to pay at least 15%. The plan also would increase tax revenue by conducting more audits of rich taxpayers.
Those two funding measures already were included in Biden's tax plans. The thinking is they could raise money without increasing tax rates or rolling back President Donald Trump's 2017 tax cuts, something that Republicans have said is a red line in the negotiations, said the person, who requested anonymity to discuss the private conversation.
The offer does not mean that Biden is abandoning his larger ambitions to raise taxes on corporations and wealthy individuals, the person said, characterizing the proposal as simply a bid to find common ground in the Capito talks. Democrats still could pursue those plans in a partisan reconciliation bill later this year.
The 15% minimum tax addresses situations where major tech companies, like Amazon.com Inc, Netflix Inc. and Zoom Video Communications Inc., have largely been able to avoid paying federal income taxes in some years despite turning a profit because they used legal maneuvers, including write-offs for business expenses, to whittle down their tax bills.
The measure was included in Biden's American Jobs plan announced in March. It would impose a minimum 15% levy on corporations' profits reported in financial statements, also known as book income. The change would upend decades of differences to how companies compute their finances for tax purposes and would limit the amount of legal tax breaks they could use.
The provision has been criticized by Republicans and some economists for being an inefficient way to increase taxes.
Critics have said that imposing a minimum tax on profits would mean that companies would be less incentivized to spend money on things that Congress wants to promote, such as research and development or renewable energy, because they wouldn't be able to claim those tax breaks.
Biden also has proposed an $80 billion investment in the Internal Revenue Service, which the White House says could raise an additional $700 billion over a decade. The plan would ramp up IRS enforcement, which has declined in recent years, as well as give the agency more visibility into the bank accounts of some taxpayers.
The White House has argued that additional enforcement has bipartisan support. A Data for Progress report released last month showed that 60% of Americans -- including 40% of Republicans -- back increased IRS enforcement.
Republican lawmakers have said they support some additional funding for audits, but some have criticized the Biden plan as going too far.
Information for this article was contributed by Tony Romm of The Washington Post; by Justin Sink and Laura Davison of Bloomberg News (TNS); and by Kevin Freking, Lisa Mascaro and Josh Boak of The Associated Press.