Senate Republicans Release $928 Billion Infrastructure Counteroffer

May 27, 2021
Originally published on May 27, 2021 1:21 pm

Updated May 27, 2021 at 12:12 PM ET

A group of Senate Republicans on Thursday unveiled a $928 billion infrastructure proposal to counter President Biden's plan for a nearly $2 trillion bill.

The proposal outlines a significant increase from the most recent GOP plan to spend $568 billion. The new version includes additional money for roads, bridges, water, rail and airports, but the majority of the proposed spending is part of an existing baseline plan for investments. The total new money is just $257 billion.

West Virginia Sen. Shelley Moore Capito led a group of GOP negotiators in crafting the plan based on ongoing talks with the White House.

"It sticks to the core infrastructure features that we talked to initially," Capito told reporters at the Capitol. "It is a serious effort to reach a bipartisan agreement."

The single-largest spending item is $506 billion for roads, bridges and major projects — a $91 billion increase. Other increases include $48 billion for water infrastructure, $25 billion for airports, $65 billion for broadband and $22 billion for freight and passenger rail.

The shift comes days after Biden offered to lop off $550 billion from his original proposal, moving the two sides closer than they have ever been, though significant challenges remain.

Republicans plan to pay for the vast majority of the spending by repurposing funds Congress has already approved for other projects. They are primarily targeting unspent money meant for COVID-19 relief.

In a statement, White House officials called the GOP counteroffer "encouraging" but said they were concerned about the proposal to use COVID-19 relief funding to pay for the plan and that some concerns remained about funding proposals for VA hospitals, rail, transit, lead pipes and climate. Biden said he plans to meet with Republican senators on infrastructure talks next week.

In a letter sent to the White House on Thursday morning, the group of Republicans framed their offer as evidence that a bipartisan deal can be reached as long as the definition of infrastructure remains focused on mostly physical improvements.

"As a group, we were explicit that policies unrelated to physical infrastructure do not fit in this package," they wrote. "This is not because we do not value these important issues. We simply believe that these policies should be addressed in separate legislation that does not dilute our shared objective of passing this package. We can address these important issues separately without weakening our commitment to building America's infrastructure."

The disagreement over how to pay for infrastructure may eclipse all other arguments going forward.

Democrats want to increase taxes on corporations and high income earners — a plan that Republicans have flatly rejected.

Biden and his allies have also firmly supported plans to pay for the spending by increasing the corporate tax rate to 28%, increasing the top federal income tax rate to 39.6% for those earning more than $400,000, and expanding the capital gains tax.

Democrats generally dispute the claim by Republicans that the government is sitting on extensive unspent funding from COVID relief.

The White House told reporters traveling with the president that roughly 95% of the $3 trillion earlier COVID relief money was either already obligated as of March or has been set aside for the Paycheck Protection Program, unemployment insurance or nutrition assistance.

"Of the remaining 5% the largest categories of unobligated balances are in the Heath Care Provider Relief Fund—funding for rural hospitals, health care providers and disaster loans for small businesses," the White House said.

Targeting that money risks dragging infrastructure into ongoing political arguments about the coronavirus and the pandemic response.

Capito touched on one particularly heated element as a target for cost savings.

"I think 23 states have said they are not going to take enhanced unemployment," Capito said. "Certainly those dollars aren't going to be spent. We know that."

Democrats have strongly defended enhanced federal unemployment payments as a critical part of supporting workers who lost jobs during the pandemic. Many Republicans blame the payments for keeping some workers out of the job market.

Sen. Roger Wicker, R-Miss., told reporters Wednesday in the Capitol that the proposal would meet White House standards while also appealing to at least some Republicans.

"We will have reached a number that President Biden has said was acceptable," Wicker said. "I think there's a great deal of support for it. Clearly we wouldn't have unanimous support."

Biden has recently called for $1.7 trillion in spending in a package that broadly redefines the definition of infrastructure as well as expanding federal spending priorities and the role of the federal government in the everyday lives of Americans.

Republicans have sought to narrow the discussion to policies that involve traditional physical infrastructure — such as roads, bridges, ports and highways — and some digital components such as broadband access.

Biden's plan expands the term infrastructure to cover virtually every aspect of a worker's relationship to the economy. His plan includes measures to combat climate change and promote green energy, funding for child care and early childhood education, union-friendly measures and worker protections.

The discussions thus far have focused mostly on Biden's American Jobs Plan and not the additional spending called for in the American Families Plan, which was originally presented by the White House as a legislative companion.

Democrats say they are convinced that there is broad support for expanding federal funding for the programs Biden has outlined, particularly as workers and families continue to recover from the COVID-19 pandemic.

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RACHEL MARTIN, HOST:

Senate Republicans have put out their own infrastructure plan totaling $928 billion. They say it focuses on areas where Republicans and Democrats can work together to get an infrastructure bill signed into law.

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SHELLEY MOORE CAPITO: It sticks to the core infrastructure features that we talked to initially. It's a serious effort to try to reach a bipartisan agreement.

MARTIN: That's the voice of West Virginia Senator Shelley Moore Capito, who's been leading the GOP effort. The plan includes significant increases in spending for roads, bridges and highways. But Republicans and President Biden are still far apart when it comes to how they actually define infrastructure and how they want to pay for it all. NPR's congressional correspondent Kelsey Snell is with us this morning for more. Hi, Kelsey.

KELSEY SNELL, BYLINE: Hi, good morning.

MARTIN: Tell us more. What else is in this latest GOP counterproposal?

SNELL: So this is an eight-year spending framework. And like you said, it totals around $928 billion, but not all of that is new money. I think the single largest spending item that we see here is $506 billion for roads, bridges and major projects. And that is a $91 billion increase from where they were in this baseline. There are other increases, like $48 billion for water infrastructure, $25 billion for airports and money for broadband and freight and passenger rail. But a bulk of this plan is baseline spending, meaning it's money Congress already planned to spend on projects like this. The new money portion is only about $257 billion. And it can feel like a lot of money when we're talking about hundreds of billions of dollars, but when you put it in the context of President Biden's $1.7 trillion plan, it's just a completely different world of a conversation about spending.

MARTIN: OK, but you're saying the new money is only about $257 billion still. How do Republicans plan to pay for that?

SNELL: Well, this is one of the most controversial elements of their plan. They want to repurpose money Congress already approved for spending and they want to take it primarily from unspent COVID relief money. Now, not only is that controversial on its face - Democrats say the pandemic isn't over and the long-term needs of the country are really not yet known - but there's also a serious disagreement about whether the money is actually unspent. And then it comes down to how they want to cut the money. Senator Capito called out one very controversial option.

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CAPITO: I would just use as an example the twenty - I think - three states that have said they're not going to take enhanced unemployment. Now, there may be some way they're calculating that, but certainly those dollars are not going to be spent. We know that.

SNELL: That already set off alarm bells for some Democrats because enhanced unemployment is a huge political fight and targeting that, you know, going into that spending, drags infrastructure deep into an existing political war. And that's kind of the opposite of what these bipartisan talks are meant to do. Though, Senator Pat Toomey of Pennsylvania said he'd be open to talking to Democrats about which COVID-related programs should be trimmed.

MARTIN: So are Democrats seeing this as a serious counterproposal?

SNELL: You know, some of the early feedback has been very skeptical. Hawaii Senator Brian Schatz pointed out how small the increase in new money is. And that's really likely to be a big problem for a lot of Democrats because Biden wants a few Republicans on board. He doesn't want a plan that pleases Republicans and loses votes from his own party because, you know, he needs Democrats to be unified, both as a political matter and for the pure math of getting something passed in the House where they've got really tight margins. It's good to remember that when people in Washington say bipartisan, sometimes all they mean is that one person from the other side had voted for them. And in this case, Biden needs 10 Republicans to vote for a plan in the Senate to get anything passed. And there'll be tremendous pressure not to abandon Democrats to get those votes.

MARTIN: So in their unveiling of this plan - I mean, did Republicans address any of the potential criticisms that are already coming from Democrats?

SNELL: They did a bit. You know, basically, they said Biden has two options - either keep going on these talks or alienate every Republican in Congress. Wyoming Senator John Barrasso said Biden is welcome to keep trying and pushing his $1.7 trillion plan. But, you know, if he does that, there's a risk.

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JOHN BARRASSO: If that's the direction that they want to go, they can try it. They're not going to have even a single Republican support for that approach. I would say to President Biden, this is something that will work, it will help the country, will help us move forward.

SNELL: That's a bit of a political threat there. And it certainly doesn't do much to quiet speculation that Democrats are already prepared to abandon these bipartisan talks and kind of pursue a different strategy.

MARTIN: All right. NPR congressional correspondent Kelsey Snell, thank you.

SNELL: Thanks for having me. Transcript provided by NPR, Copyright NPR.