Biden-GOP spending talks hit critical juncture as patience runs thin

President Biden will speak with Sen. Shelley Moore Capito (R-W.Va.) on Friday afternoon to discuss a potential bipartisan compromise on infrastructure amid signs the talks are nearing their end as both sides remain far apart on key components.

Friday’s discussion — slated to take place by phone instead of in person like the previous meetings — comes as the clock is ticking for striking an agreement.

Capito, the lead GOP negotiator, and Biden missed an informal Memorial Day deadline to clinch a deal. Democratic lawmakers, who start returning to Washington next week, are now eager to move forward on an infrastructure package, with or without Republicans.

“I’m going to be having a talk this afternoon and I’ll be able to report to you after that,” Biden told reporters following a speech on the economy Friday morning.

Biden and Capito huddled just two days ago in the Oval Office for the second time in a month in hopes of ironing out differences on a package, but without being able to reach a breakthrough.

The White House and Republicans have inched closer to one another on the size of the spending package but glaring disagreements remain over the scope of the proposal and how to pay for it.

Biden, during Wednesday’s meeting, proposed the idea of a 15 percent minimum tax on corporations to pay for a smaller infrastructure proposal, a tax policy that was already included in his American Jobs Plan.

The White House later said Biden is still committed to increasing the corporate tax rate, having proposed a hike from 21 percent to 28 percent to pay for his original $2.25 trillion infrastructure plan.

Capito and other Republicans last week pitched a $928 billion counteroffer, containing only about $260 billion in new spending. The West Virginia senator may make another counterproposal on Friday’s call.

Though Republicans are spread out across the country this week, Capito has been briefing a handful of GOP senators, including Senate Minority Leader Mitch McConnell (Ky.).

“We’re still hoping we can come to an agreement on a fully paid for and significant infrastructure package,” McConnell said in Kentucky on Thursday, noting he had spoken with Capito.

But he also appeared to pour cold water on the idea that Republicans would support any tax increases.

“I don’t think that’s gonna appeal to members of my party, and I think it’ll be a hard sell to the Democrats,” McConnell added, instead urging Biden to reach a deal that is “smaller, but still significant and fully paid for.”

Biden first reduced his proposal from $2.25 trillion to $1.7 trillion. White House press secretary Jen Psaki told reporters Thursday that he proposed a plan that would include $1 trillion in new spending in the conversation with Capito earlier this week, while declining to say whether the president would go even lower.

“I think it’s important to note that there are a range of options moving forward. And certainly, his approach and his priority is making a historic investment in infrastructure, creating millions of jobs, and seeing how we can do that as quickly as possible,” Psaki said at a press briefing.

Biden also expressed openness to using some of the unspent coronavirus relief funds from legislation passed during the Trump administration — prior to his $1.9 trillion relief bill — to pay for a package, Psaki said.

The White House has opposed a GOP proposal to pay for infrastructure through user fees, such as an increase to the gas tax, saying it would violate Biden’s pledge not to raise taxes on Americans making less than $400,000 a year.

Biden is in a difficult position as he continues discussions with Republicans. He is facing pressure from progressives to end the talks and move forward using budget reconciliation so that Democrats can pass a large infrastructure package without Republican support. At the same time, Biden is still searching for a major bipartisan victory and needs to consider moderates like Sen. Joe Manchin (D-W.Va.).

In a pair of news interviews on Thursday, Manchin signaled he wanted to see bipartisan negotiations on infrastructure continue.

“We need to do something in a bipartisan way. … We’re not going to get everything but we can move forward,” Manchin told CNN. “These take time. I know everyone is in a hurry right now. … We’ve got to work together and that takes a lot of time and energy and patience.”

He also said Capito was expected to give an update to a key group of moderate-minded senators, known as the Group of 20, next week. The group, he added, would look for ways to “assist and help” the White House reach a bipartisan deal on infrastructure.

Manchin’s stance complicates calls from a growing number of his Democratic colleagues, who increasingly view the bipartisan talks as a waste of time.

“Best case: shrunk infrastructure bill w no serious climate stuff; Rs get bipartisan cred. Worst case: delay for nothing. Either way: climate to the curb,” Sen. Sheldon Whitehouse (D-R.I.) tweeted this week about a story on Capito and Biden’s latest meeting.

Senate Majority Leader Charles Schumer (D-N.Y.) has pledged that he will move forward with an infrastructure package in July.

“The bottom line is very simple, that it has always been our plan regardless of the vehicle to work on an infrastructure bill in July. And that’s our plan, to move forward in July,” he told reporters last week.

More extensive guidance from the Senate parliamentarian, circulated late last week, could complicate Democrats’ strategy. Under the ruling, Democrats likely only have one more shot this year at bypassing the filibuster unless they can get GOP buy-in, something that won’t happen.

But either way Democrats need Manchin’s support to use reconciliation because it requires all 50 members of the Senate Democratic caucus. Manchin is making clear he isn’t on board yet and, speaking with CNN, also argued that Biden understands his position.

“If anyone understands the process, it’s President Joe Biden … We’ve got to bring our country together,” Manchin said.

White House officials have repeatedly said Biden’s red line is “inaction.” He also hopes to pass an infrastructure package by the end of the summer, which leaves a quickly tightening window for action.

Psaki said Thursday that Monday was not a deadline for a major breakthrough on an agreement, despite Transportation Secretary Pete Buttigieg saying last week that the Biden administration wanted “clear direction” on an infrastructure plan by June 7 — when Congress returns from a Memorial Day recess.

At the same time, the White House has repeatedly pointed to other actions on Capitol Hill as other avenues for an infrastructure bill. For instance, the House Transportation and Infrastructure Committee is scheduled to mark up its $547 billion surface transportation bill Wednesday. The measure is not expected to garner any Republican support.

“I think we’re going to keep our options open to see what paths we can move forward on,” Psaki said. “And certainly, the president is not going to accept a deal that doesn’t help create millions of jobs and make a historic investment in our nation’s infrastructure.”

Rep. Peter DeFazio (D-Ore.), who chairs the House Infrastructure and Transportation Committee, told reporters on a phone call early Friday afternoon that he planned to speak to Biden over the phone later that day about his newly unveiled legislation that would provide $547 billion in additional spending to boost projects to fix bridges and roads and increase funding for rail systems.

Updated at 1:45 p.m.