On Thursday, May 27, Senate Republicans presented the White House with a $928 billion infrastructure proposal in response to the White House’s latest $1.7 trillion infrastructure plan. Despite the narrowing of the gap, there is still a divide between the two sides on the definition of “infrastructure” and how to pay for it.
Analysis says this latest proposal could help break the deadlock in negotiations between Republicans and the Biden administration over the infrastructure plan, after the White House set Memorial Day next Monday (May 31) as the deadline by which negotiations must progress.
Meanwhile, the $928 billion size is also an increase from the Republicans’ previous proposal to spend $568 billion over five years, and the new version of the plan would fund transportation systems such as roads, bridges, railroads, airports, ports, freight and passenger transportation, Internet broadband, water supply and more over eight years.
The latest proposal proposes $506 billion for roads, bridges and major infrastructure projects, with $4 billion for electric vehicles, but does not include Biden administration priorities such as $400 billion for home health care, $100 billion for consumer discounts on electric vehicles, or spending on upgrades to housing and schools.
As mentioned by Wall Street News, last Friday, in order to win the support of Republican members of Congress, the Biden administration made concessions, compressing the size of the original $2.3 trillion “sky-high” infrastructure and jobs program to $1.7 trillion, reducing rural broadband and road and bridge-related investments, and shifting some of the funding from the jobs program to other bills. At the time, Republicans said the new proposal was much higher than the scope of bipartisan support for passage.
Republican senators who led the proposal reiterated today their opposition to the Biden administration’s proposed plan to pay for infrastructure investments with higher corporate taxes, which Biden has said should be raised from 21 percent to at least 25 percent. Republicans want to reallocate unused state and local government bailout money for fighting the epidemic to infrastructure or charge user fees on transportation such as electric cars to pay the bills.
But congressional Democrats would inevitably oppose such a proposal, and it would also run counter to Biden’s promise that “individuals earning less than $400,000 a year would not have their taxes raised” because of the additional burden that an electric vehicle user fee or higher gas taxes would place on people.
In addition to the fundamental and serious differences between the two parties in Congress on how to pay for infrastructure, their definitions of “infrastructure” are different. Republicans demanded that only physical infrastructure be included in the package, while Democrats called for the inclusion of “human infrastructure,” which is what the Biden administration plans to put money toward, among other things, caring for the elderly and disabled.
Democratic Senator Elizabeth Warren, who ran for president of the United States, said today that the latest Republican proposal “is not a serious bargain” and that “they are under the illusion of taking away money that has already been committed to other places and spending programs”.
Republican Sen. Shelley Moore Capito said Republicans and the White House are close to an agreement on an infrastructure plan, but still need to address fundamental questions about the scope of the package and how it will be paid for, “I’m optimistic, but there’s a big gap between the two visions.
She additionally noted that a bipartisan agreement in Congress on transportation spending is possible. A week ago the Senate Environment and Public Works Committee introduced about $300 billion in surface transportation bills, which she believes could guide a broader infrastructure deal.
It is widely believed that if negotiations fail, Democrats will try to advance the White House version of the infrastructure bill through a “budget reconciliation process” without Republican support.
This requires only a simple majority vote, but also on behalf of the Senate Democrats must hold on to all 50 votes in the party. Sources familiar with the matter told the media that Democratic Senate aides have begun early discussions on how to advance the infrastructure package through a “budget reconciliation process.
Under the current rules, as the congressional Democrats have already forced through the relevant coordination process in February this year, the Biden administration’s $1.9 trillion bailout spending plan, exhausted by the end of September this year, the end of the fiscal year 2021 quota, therefore, is expected to enter the next fiscal year of the U.S. government on October 1 this year, the infrastructure plan is very likely to again through the “budget coordination “mechanism on the ground.
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