President Joe Biden met Wednesday with Sen. Shelley Moore Capito (R-W.Va.) as time is running out for Democrats and Republicans to agree to a bipartisan deal on overhauling the nation’s infrastructure.
The one-hour meeting ― the first one-on-one sit-down between Biden and a lead Republican negotiator on infrastructure ― comes at a critical time. If anyone in either party seems to genuinely want to make a deal, it’s Biden and Capito. But after more than a month of negotiations, the two sides remain far apart on the size of an infrastructure package, and perhaps more crucially, on how to pay for it.
“This afternoon, the President hosted Senator Capito for a constructive and frank conversation in the Oval Office about how we can drive economic growth and benefit America’s middle class through investing in our infrastructure. The two agreed to reconnect on Friday,” the White House said in a statement to reporters.
Biden administration officials have suggested cutting off bipartisan talks soon if an agreement cannot be reached. Democrats would then try to pass their own infrastructure package with a simple majority in the Senate using a budget process known as reconciliation.
“I think we are getting pretty close to a fish-or-cut-bait moment,” Transportation Secretary Pete Buttigieg said Sunday. “We believe in this process, but also very much agree that this can’t go on forever.”
The differences between the two parties on upgrading infrastructure are large. Biden has proposed spending $1.7 trillion ― down from an initial $2.2 trillion ask ― to renew the nation’s roads, bridges and waterways, as well as make critical investments into electric vehicles and elder care. Republicans have proposed spending about $900 billion ― their latest, most fulsome offer ― on traditional infrastructure projects only.
But the biggest disagreement may be over how to finance the massive project. Democrats want to raise corporate tax rates, whereas Republicans want to increase user fees on things like electric vehicles and repurpose billions in unspent aid Congress already appropriated for coronavirus relief in the American Rescue Plan. Neither side has budged on its proposed “pay-for,” leaving a wide gulf to bridge in any prospective infrastructure agreement.
Last week, the nation’s mayors and county leaders wrote to congressional leadership urging them not to use federal coronavirus aid to pay for other activities such as infrastructure. The funds, they noted, would go to support things like vaccine distribution, housing and rental assistance, and social safety-net services.
“Despite the obvious and critical need for these dollars, there have been recent Congressional proposals to clawback these funds. We oppose these proposals, both in general and as a pay-for for infrastructure,” the local leaders wrote in the letter.
Progressives have been wary of Biden’s negotiations with Republican senators, urging him to move on and focus on passing all their priorities in one large package. But Democrats face added risks by going it alone with reconciliation, as they did when they passed the American Rescue Plan in March.
Ditching bipartisan talks too quickly could anger Democratic moderates like Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, who have expressed a desire to make a good-faith effort at reaching a deal with the GOP. With a 50-50 split in the Senate, Democrats need every member on board to pass their agenda.
Reconciliation could also pose an even bigger challenge this time. Unlike with coronavirus aid, where Democrats agreed on the need for things like stimulus checks and unemployment insurance, the party is more divided on infrastructure and how to pay for it. Democratic lawmakers who represent more affluent states like New York, New Jersey and California are jockeying over a key provision in President Donald Trump’s tax cut law that raised taxes on their constituents, and they want Biden to undo it.
Meanwhile, progressives have a slew of demands for this package, including on elder care, child care, affordable housing and climate change.
“I think we need a bold solution that does both the hard infrastructure of roads, bridges, high-speed rail, rural internet, but also the softer infrastructure, the human infrastructure of paid family leave, affordable day care, making sure our kids are back to school, so that all parents can get back to work,” Sen. Kirsten Gillibrand (D-N.Y.) told CNN on Sunday.