Biden, Republicans Set Talks Over Competing Infrastructure Plans

WASHINGTON—Lawmakers and administration officials signaled on Sunday that they expected negotiations over an infrastructure package to ramp up this week, as Republicans and President Biden work to see if a bipartisan agreement is within reach.

White House chief of staff

Ron Klain

said that Mr. Biden had invited

Sen. Shelley Moore Capito

of West Virginia, one of the lead GOP negotiators on the infrastructure package, and others to meet this week.

“We’re going to work with Republicans. We’re going to find common ground,” Mr. Klain said on CBS.

Republicans said they wanted to see that Mr. Biden was willing to make some concessions to prove his willingness to work across the aisle.

Sen. Susan Collins

of Maine, a centrist Republican involved in the discussions, said it was up to Mr. Biden to make the next offer in negotiations with GOP lawmakers.

Republicans last month proposed spending $568 billion on infrastructure, offering a far narrower and less expensive alternative to the plan Mr. Biden unveiled in March, which would spend $2.3 trillion over eight years on programs and services that go beyond transportation, among them home care for seniors and technology and manufacturing research. In addition, Mr. Biden announced a $1.8 trillion child-care and education plan in his joint address to Congress last week. GOP lawmakers have said they think it might be possible to reach a bipartisan agreement on a more limited package focused on roads, bridges and other elements of physical infrastructure.

In his first address to Congress, President Biden called for huge federal investments, including $2.3 trillion in infrastructure and $1.8 trillion in family and education programs. Gerald F. Seib unpacks the four main takeaways from the speech. Photo illustration: Ksenia Shaikhutdinova

“At this point, I think now that the Republicans have put forth a reasonable offer, it’s up to the president to do a counteroffer to us,” Ms. Collins said Sunday on CNN.

Of the $568 billion in the GOP framework, $299 billion would go toward roads and bridges, an increase from the $115 billion the Biden administration’s plan proposes. The GOP plan also dedicates $61 billion to public transit systems, $20 billion to rail and $65 billion for broadband.

Anita Dunn, a senior adviser to Mr. Biden, said Sunday on CNN that the president was willing to compromise and that “he wants to move this package forward in a bipartisan way—if that’s possible.”

“His red line is inaction, that we cannot afford not to make these investments in America’s economy,” she said.

Mr. Biden’s proposal includes $621 billion to modernize transportation infrastructure, $400 billion to help care for the aging and those with disabilities, $300 billion to boost the manufacturing industry, $213 billion on retrofitting and building affordable housing and $100 billion to expand broadband access, among other items.

Lawmakers have said they expect that the two biggest sticking points to be the cost of a bipartisan plan and how it would be paid for. Democrats have said this is the time to make investments in the country’s infrastructure and social programs to help the economy recover from the effects of the global coronavirus pandemic. Republicans have been wary of high levels of new spending, after a year of unprecedented emergency spending in response to the pandemic.

On ABC Sunday,

Sen. John Barrasso

of Wyoming, a member of Senate GOP leadership, said “$500 to $600 billion dollars of infrastructure is a massive amount of infrastructure.”

To pay for his plan, Mr. Biden has proposed raising the corporate tax rate to 28% from 21% and increasing taxes on U.S. companies’ foreign earnings to cover the cost of the eight-year spending plan over 15 years.

Ms. Collins said Sunday that she opposed raising the corporate tax rate to 28%, saying that would mean that “jobs once again would go overseas.’’ She didn’t specify what rate she would support. “There are a host of different ways to pay for it, but that’s premature to get to until we decide the amount and what exactly is it going to cover,” she said.

Sen. Rob Portman (R., Ohio) said Sunday on NBC that options include user fees, public-private partnerships and allowing states to use funding from earlier Covid-19 relief packages to pay for infrastructure projects.

“If the White House is willing to work with us, this is a deal we can do,” Mr. Portman said. “Infrastructure has always been bipartisan.”

The White House has said it is opposed to relying on user fees to pay for the infrastructure package, though some Democrats on Capitol Hill have said they are open to that idea.

Mrs. Capito has said the Republican plan wouldn’t include raising the gas tax, instead floating the possibility of collecting a vehicle-miles-traveled tax that would collect revenue from electric vehicles.

To pay for the child-care and education package, Mr. Biden is proposing a series of tax increases on wealthy Americans. He wants to raise the top income-tax rate to 39.6% from 37%, while also raising the capital-gains rate to 43.4% from 23.8% for households making more than $1 million. The plan would also change how capital gains are taxed at death and provide more funding to the Internal Revenue Service to collect more taxes owed.

“The president has pledged that no family earning under $400,000 will pay a penny more in taxes. And we’ve been assiduous in sticking to that pledge,” Treasury Secretary

Janet Yellen

said Sunday on NBC.

The plan to raise taxes on capital gains has divided Democrats, with some saying they are concerned that higher rates could slow economic growth.

Others have defended the increases as necessary to reduce income inequality and invest in the economic recovery.

“The very rich and large corporations should start paying their fair share of taxes to help us rebuild America and create the jobs that we need,” Sen. Bernie Sanders (I., Vt.) said Sunday on NBC.

If lawmakers can’t reach a bipartisan agreement, Democrats have indicated they may be willing to advance one large package through a process tied to the budget known as reconciliation. That would enable Democrats to pass legislation without GOP support—but they couldn’t afford to lose even a single member of the Democratic caucus in the evenly split Senate, where Vice President

Kamala Harris

can cast a tiebreaking vote. Sen. Joe Manchin (D., W.Va.), a centrist, has indicated he wants to pass legislation with bipartisan support, rather than trying to jam through partisan legislation using reconciliation.

The budget process also imposes tight constraints around what type of legislation can be passed using it.

Write to Eliza Collins at eliza.collins+1@wsj.com.

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Source: WSJ – US News

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