President Biden is prepared to "change course" on passing his massive tax and spending packages if Democrats are unable to strike a bipartisan agreement on infrastructure with Senate Republicans, a top White House adviser said on Sunday.
Hopes for a deal on infrastructure dimmed considerably last week, after the Biden administration sent GOP lawmakers a counteroffer that cut $500 billion off the president's initial proposal. The latest figure – about $1.7 trillion – is still more than $1 trillion higher than the offer Republicans had initially made to the White House.
"He wants a deal. He wants it soon," White House senior adviser Cedric Richmond said during an interview on CNN's "State of the Union." "But if there's meaningful negotiations taking place in a bipartisan manner, he's willing to let that play out. But again, he will not let inaction be the answer. And when he gets to the point where it looks like that is inevitable, you'll see him change course."
Biden has laid out two massive economic proposals – the $2.3 trillion American Jobs Plan and the $1.8 trillion American Families Plan – that make up his "Build Back Better agenda." The measures, which would be paid for by raising taxes on corporations and wealthy Americans, seek to dramatically expand the government-funded social safety net, overhaul the nation's infrastructure and invest billions into green energy and combating climate change.
The White House has said it would like to see progress on a bill by Memorial Day and has indicated that it wants to send the measure to Biden's desk before the August recess. But the two sides remain deeply divided on the size and scope of such a measure.
Republicans say Biden's proposals are too expensive and stray too far from "traditional" infrastructure – and have resisted any effort to roll back part of the 2017 Tax Cuts and Jobs Act. To pay for the plans, Biden has proposed raising the corporate tax rate to 28% from 21%, imposing a higher global minimum on U.S. companies' foreign earnings, doubling the capital gains tax rate to 39.6% and hiking the individual income tax rate to 39.6%.
"I think we’re still pretty far apart, but this is the test. This will determine whether or not we can work together," Sen. Susan Collins, one of the leading Republican negotiators, said in an interview on ABC’s "This Week."
The Republican group countered with a $568 billion proposal last month that focused solely on traditional infrastructure, including roads, ports, bridges, water lines and broadband. But there have been signs that GOP lawmakers are willing to back a bigger measure; Senate Minority Leader Mitch McConnell suggested there's an appetite for a package that costs as much as $800 billion.
Republicans have not suggested a way to pay for the bill other than increasing the gas tax.
With narrow majorities in the House and Senate, Democrats have the option to bypass Republicans and approve the measure on a party-line basis using a procedural tool known as budget reconciliation, a path that some liberals want to take.
Still, some moderate Democratic members, including Sen. Joe Manchin, D-W.Va., have indicated they want to pursue a bipartisan deal first on a smaller, more targeted infrastructure bill before moving unilaterally to pass a bigger measure. Sen. Chris Coons, D-Del., told FOX Business on Tuesday morning that negotiations are "making steady progress" and said he believes Democrats "should continue to pursue negotiations as long as they are real and substantive."
A team of Biden administration officials, including Transportation Secretary Pete Buttigieg and Energy Secretary Gina Raimondo, met on Capitol Hill with a group of Republican senators to discuss infrastructure, but the meeting ending without a new counterproposal from the GOP side.