Out With the Infrastructure

Hill watchers got a peek at the ongoing bipartisan negotiations between the White House and Senate Republicans last Friday— and progress appears to be lagging.

In a new memo, the White House lowered its request for the American Jobs plan from $2.25 trillion to $1.7 trillion and simultaneously lowered its estimate of the amount of new funding contained in the Republican proposal to no more than $225 billion — effectively leaving a $1.5 trillion difference between the two parties.  

Much of their differences center on the definition of infrastructure and how to pay for it. 

The White House’s memo indicated the Republican proposal does not include six investments that are “key to our competitiveness and have garnered bipartisan support”:

  • Power sector investment and tax credit
  • Environmental remediation investments
  • Building and construction tax credits  
  • Veterans’ hospital and modernization
  • Workforce development and training
  • Investments in care infrastructure

And underfunds three programs consistent with the Republicans’ narrower definition of infrastructure:

  • Transportation infrastructure, e.g., EV charging stations
  • Elimination of lead pipes and service lines
  • Resilience investments

Republicans have rejected the president’s proposal to pay for infrastructure with corporate tax increases, instead apparently preferring increased fees on users of electric vehicles, an approach Biden fundamentally disagrees with because it would violate his commitment not to raise taxes on people earning under $400,000.  

After several weeks of discussions, significant differences clearly remain and time and patience are running out. Members of both parties indicate the next couple of weeks are critical for coming to an agreement. If no bipartisan agreement can be reached, Democrats will find themselves going the partisan budget reconciliation track later this summer.