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Biden, GOP Inch Closer to Infrastructure Compromise

May 27, 2021
The Republicans latest infrastructure proposal runs $928 billion, almost twice their original counteroffer.

Negotiations on a new U.S. infrastructure funding bill continue in Washington between Senate Republicans and President Biden. A group of Senate Republicans led by Senator Capito of West Virginia released their second counteroffer to Biden’s infrastructure plans May 27, outlining $928 billion in spending for roads, broadband, and other forms of infrastructure.

To come up with their latest infrastructure offering, Republicans dramatically increased the amount of money that would go towards noncontroversial improvements like roads, bridges, public transit, and airports relative to their last proposal.

The GOP’s latest bill apportions $506 billion for roads, bridges, and other personal transportation infrastructure, compared to $299 in their original counteroffer. Additionally, $4 billion of the money towards road infrastructure would be earmarked for developing electric vehicle infrastructure.

According to a bill summary provided by Senate Republicans, the new bill would increase spending for roads and bridges by $91 billion over baseline, water infrastructure by $48 billion over baseline, and passenger and freight rail by $22 billion over baseline. It would also include one-time increases of $65 billion for broadband infrastructure, $25 billion for airports, and $6 billion for water storage in the West.

Republicans did not budge on elements of Biden’s infrastructure bill that would provide funding for services like public housing, childcare, and community-based healthcare workers. Those issues, Republicans say, are social welfare issues not suitable for inclusion in an infrastructure bill. In a letter to the White House sent May 27, the authors of the latest counteroffer said, “Policies unrelated to physical infrastructure do not fit in this package.”

President Biden looks to fund the infrastructure bill in part by raising the U.S. corporate tax rate to 28%. Republicans, however, say raising the corporate tax rate from where Trump tax cuts put it in 2017 would put a halter on the current recovery. Instead, GOP proposals have called for sourcing money from unused funds for expanded COVID-19 benefits.

In comments to the media May 27, Senator Capito said, “I think 23 states have said they are not going to take enhanced unemployment.” She suggested the expanded unemployment funds, a Democratic priority rejected by many Republican-led states, could be used to fund infrastructure instead.

This is so far the fourth proposed version of the infrastructure bill President Biden aims to pass by summer’s end. The first, proposed by President Biden shortly after he was elected, called for more than $2 trillion in spending. After Republicans balked at the sum and produced a slimmed-down $568 billion infrastructure plan, Biden produced a $1.7 trillion version.

The latest proposal by Republicans is the result of weeks of bargaining and Oval Office negotiations. Yet despite the converging price points, both sides of the infrastructure debate remain split on just what to pay for and how to pay for it. 

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