Biden’s Infrastructure Plan Meets a Counter-Offer by Republicans

26 May 2021 · 3rd Party Analysis

Biden’s Infrastructure Plan Meets a Counter-Offer by Republicans


In Summary

  • The GOP party will release a $1tn counter-offer this week
  • President Biden remains confident a bipartisan agreement could be reached

Senate Republicans are preparing to propose a counter-offer to President Biden’s infrastructure plan. A group of GOP Senators is set to present a $1tn infrastructure offer to the White House later this week. The offer comes as a response to the $1.7tn plan the White House proposed last week, a drop from the original $2.3tn proposed spending package.

Citing the large amounts of spending planned for certain measures included in the plan, Senate Republicans wanted more cuts in the budget, even after the $500bn trim from the initial package. The slimmed-down proposal of $1.7tn aimed to restart the bipartisan efforts to reach an agreement but negotiations fell flat just a week later.

There are steps, however, from both sides to close the gap between the proposals of the parties. Republican lawmakers almost doubled their original offer of $568bn. The substantial increase brought hopes that bipartisan talks could be sustained. Members of the GOP group said they will send the new plan to the White House on Thursday.

White House press secretary Jen Psaki has not yet confirmed whether President Biden will support the $1tn package. Before the crafting of the $1tn offer, Ms. Psaki had commented the White House administration looked forward to receiving a new GOP proposal.

“Our view is that this can be a week of progress, including the counteroffer,” she said on the matter after the counter-offer was announced. “We’ll have to look at the nitty-gritty details. Certainly, them coming up in funding is progress.”

Roads at the Core of President’s Biden Plan

Meanwhile, President Biden continues to promote his plan and seek support. “It’s time we invest in the future of America again,” Mr. Biden said on Twitter yesterday. “The American Jobs Plan will rebuild our crumbling roads and bridges, ensure every American has access to clean drinking water, and bring high-speed internet to every community.”

Significant hurdles will still need to be overcome even if both sides close the gap over the size of the fiscal spending. There are major differences in the discussions, including how much spending should be dedicated to certain elements of the package. Republicans and Democrats disagree, for example, on the amount of money dedicated to research and technology. A more serious issue is how to finance the infrastructure plan. Republicans have rejected the White House proposal to raise taxes on US companies to cover the cost of the investment.

Some Republicans will call for a reallocation of already approved, but not spent, funding. Sen. Pat Toomey, a participant in the negotiations, said he will seek to repurpose Covid-19 aid for infrastructure spending. This approach is most likely not going to be favored by Democrats who have pushed strongly for the approval of the $1.9tn coronavirus relief package. Of the coronavirus relief spending, $350bn has been

earmarked for state and local governments. Democrats have already signaled they will not repurpose the funding.

Both Democrats and Republicans believe a deal is possible and could be reached in the next few weeks. Some elements of the package have already been agreed upon, including a $304bn Senate bill to reauthorize federal transportation programs. How to pay for this legislation still remains unclear.

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