The White House and Capito proved unable to bridge their differences, and they remained far apart on the scope of the package and whether to make changes to tax law to pay for it. Now, Biden will attempt to negotiate with a group of Democrats and Republicans at once, a challenge that could prove more difficult but ultimately lead to more votes.
One option Senate Democrats explored Tuesday is the possibility of breaking the infrastructure package in two. They could try to assemble one bill with Republicans and then try to pass a separate measure with only Democratic support in an effort to meet all of their objectives. Both strategies, though, could prove difficult to execute.
Biden shifted gears quickly. He spoke Tuesday afternoon with Sen. Bill Cassidy (R-La.), who has been part of a bipartisan effort that met Tuesday evening, as well as Sens. Joe Manchin III (D-W.Va.) and Kyrsten Sinema (D-Ariz.).
Sen. Mitt Romney (R-Utah) said the bipartisan group of Senators made “good progress” during Tuesday’s meeting, which lasted nearly three hours. He declined to cite specific figures on spending agreements, but he said the group focused on new spending over a five-year period.
“We went through line by line and we’ve got pretty good agreement on most of those and went to the pay fors as well and they’re a little less solid,” he said.
Romney said he expected the group to put forward a public proposal in the coming weeks.
The new bipartisan talks are expected to focus on a package that would be narrower than what Biden originally proposed, but one of the biggest hurdles will be how to finance it, which is what Romney was referring to when he said “pay fors.” Biden has proposed raising corporate taxes, but Republicans have tried to explore other mechanisms.
An administration official, who, like others, spoke on the condition of anonymity to discuss private conversations, said the talks with Capito, the GOP’s top negotiator, fell apart after the president could not get her group to increase their overall spending on the plan, among other things.
“He informed Sen. Capito today that the latest offer from her group did not, in his view, meet the essential needs of our country to restore our roads and bridges, prepare us for our clean energy future, and create jobs,” White House press secretary Jen Psaki said in a statement. “He offered his gratitude to her for her efforts and good faith conversations, but expressed his disappointment that, while he was willing to reduce his plan by more than $1 trillion, the Republican group had increased their proposed new investments by only $150 billion.”
But Capito pinned the blame on the president, saying she was “disappointed by his decision” to end the talks after refusing her latest offer on a revised package.
“Despite the progress we made in our negotiations, the president continued to respond with offers that included tax increases as his pay for, instead of several practical options that would have not been harmful to individuals, families, and small businesses,” she said in a statement. “While I appreciate President Biden’s willingness to devote so much time and effort to these negotiations, he ultimately chose not to accept the very robust and targeted infrastructure package, and instead, end our discussions.”
There were numerous areas of disagreement. Biden had originally proposed raising the corporate tax rate from 21 percent to 28 percent as part of the plan, but many Republicans remained adamant that they wouldn’t support a change in the corporate tax rate. Biden later showed an openness to only raising the rate to 25 percent, and last week began pushing Republicans to see if they would accept any tax changes whatsoever.
Many Republicans had agreed that there needed to be large investments in U.S. infrastructure, but they had alleged that Biden’s original definition of “infrastructure” was too broad. For example, many Republicans objected to Biden’s original proposal, which would include large levels of spending on things such as elder care and other services.
“He has never really moved toward us in terms of core infrastructure,” Sen. John Barrasso (R-Wyo.) said Tuesday. “He had lots of broad requests for things that the American people don’t see as infrastructure, and he has never backed away from his desire to continue to want to raise taxes.”
Biden had proposed a massive infrastructure package as a key part of his 2020 presidential campaign, saying he wanted to rebuild roads, bridges, highways and ports, expand access to housing and broadband, and effectively modernize the United States for the 21st century. President Donald Trump had also proposed a big infrastructure package when he ran for president, but talks never went anywhere with Capitol Hill during his four years in office, in part because Trump himself never settled on a specific plan.
Senate Majority Leader Charles E. Schumer (D-N.Y.) now faces a crucial decision over how to proceed. He could try to advance a measure with only Democratic votes through a process called “reconciliation,” but there would be little room for error because the Senate is split 50-50. Biden’s outreach to Republicans on Tuesday suggests he still wants to find a way to assemble a bipartisan coalition, only now it appears possible that Capito might not be part of it.
Speaking to reporters Tuesday before talks collapsed, Schumer said Democrats are proceeding on two paths.
On one track are newly emerging conversations between Biden and the bipartisan group of lawmakers, including Sinema and Sen. Rob Portman (R-Ohio), who are “trying to put something together that might be close to what the president needs.” It’s unclear what size that package might be. At the same time, however, Schumer said Democrats are getting to work on a reconciliation package that might only need support from Democrats, acknowledging that their party is unlikely to accomplish everything they hope in a bill crafted alongside the GOP.
“It may well be part of the bill that’ll pass will be bipartisan, and part of it will be through reconciliation,” Schumer said. “But we’re not going to sacrifice the bigness and boldness in this bill.”
Reps. Josh Gottheimer (D-N.J.) and Brian Fitzpatrick (R-Pa.), the co-chairs of the Problem Solvers Caucus, spoke Monday night with the White House about bipartisan efforts to reach an infrastructure deal, and Gottheimer has been working closely with Cassidy and Sinema in the Senate, an aide familiar with the conversations said.
The president’s efforts at negotiations, however, could be slowed as he leaves Wednesday for his first international trip. Psaki said Biden has designated members of his Cabinet and senior White House staff to continue conversations as he heads overseas.
The White House has also not ruled out pushing the legislation through budget reconciliation if they cannot strike a deal with Republicans.
“The President is committed to moving his economic legislation through Congress this summer, and is pursuing multiple paths to get this done,” Psaki said in her statement.
Tony Romm contributed to this report.