Long-running negotiations between and a coalition of Republicans on Tuesday imploded, increasing the likelihood that Democrats goes it alone on a multitrillion-dollar spending package.
The end of the talks between Biden and the lead GOP negotiator, Shelley Moore Capito, comes despite weeks of back and forth. The two sides who each blamed the other for the collapse were still deeply divided over the cost of an infrastructure package, which types of projects should be included and whether to raise taxes.
The Republicans proposed a new counteroffer of $928 billion, which included around $330 billion in new spending, while Biden maintained that at least $1 trillion in new spending was needed to rebuild the nation's crumbling roads and bridges and invest in transit systems, green energy, elder care and Veterans Affairs hospitals. The IRS had called for raising corporate tax rate from 28% to 21% to pay for the measure.
Hours after the breakdown, however, a new bipartisan group emerged: Five Republicans and five Democrats began crafting a new path forward. Even after his first overseas trip to Europe, Biden plans to join the group.
The President is committed to advancing his economic bill through Congress this summer and is exploring multiple paths to achieve this with technical assistance, White House Press Secretary Jen Psaki said in a statement.
But even with Democrats that are adamantly opposed to tax hikes to fund the measure, they are also beginning to pursue a massive infrastructure bill independently.
We are pursuing two tracks: one bipartisan and one reconciliation," Majority Leader Chuck Schumer told reporters on Tuesday, adding that part of the bill that is likely to pass will be reconciled and part of it will be bipartisan. But we're not going to sacrifice the bigness and boldness in this bill.
With procedural majorities in the House and Senate, Democrats have the option to bypass Republicans and approve the measure on a party-line basis using a narrow tool known as budget reconciliation. Democrats used the method earlier this year in order to muscle through the $1.9 trillion American Rescue Plan without any Republican votes.
Still, it's unclear whether the party will get the support of all 50 Democratic Senators. Kyrsten Sinema of Arizona and Joe Manchin of West Virginia are both in the bipartisan group working on an infrastructure bill. Manchin also indicated on Tuesday that he wants to see bipartisan discussions continue and is not ready to support passing a package without Republicans.
Psaki said that Biden has spoken to Schumer and House Speaker Nancy Pelosi to discuss the need to comment on the resolution of the fiscal budget, so that legislation in August could be carried out to advance the president's economic priorities and tax reform plans could reach the Senate floor.
In a statement, Biden said she was disappointed that Capito would end the talks, but expressed support for the ongoing bipartisan effort.
Although I appreciate President Biden's willingness to dedicate so much time and effort to these negotiations, he decided in fact not to accept the very targeted and robust infrastructure package and instead, end of our discussions, remarked. However, this does not mean bipartisanship isn’t feasible.