President Joe Biden offered to slash the cost of infrastructure package by more than half in negotiations with Republican senators, The Wall Street Journal reports.
Biden lowered his proposal to $1 trillion, according to the report. Biden’s initial proposal was estimated to cost $2.3 trillion before he offered Republicans a $1.7 trillion counteroffer earlier in negotiations.
Republicans, who opened negotiations with a $568 billion offer, have raised their proposal to $928 billion but only $257 billion of that would be new spending. Republicans want to repurpose funds from the coronavirus relief bill they opposed earlier this year while Biden’s plan would provide $1 trillion in new funding.
“Republicans weren’t happy with Biden’s counteroffer,” according to Politico.
Republicans are expected to offer a new counterproposal as soon as Friday.
Biden offers new tax proposal:
Biden also offered to revise the tax part of his proposal after Republicans demanded no changes to the 2017 Trump tax cuts.
Biden offered to keep the corporate tax rate as is but introduce a new 15% minimum corporate tax that would hit profitable companies that pay no taxes or a very low rate.
But Republicans are not just against reversing the 2017 tax cuts but rather oppose any corporate tax increases.
Biden has also called to ramp up IRS enforcement, which the White House estimates will bring in around $700 billion in new revenue over the next decade.
But the IRS proposal was part of the administration’s strategy to pay for the American Families Plan, a separate sweeping package to increase social safety net spending. That means the administration would have to find a new source of revenue for the remaining items on Biden’s agenda.
Biden offers to repurpose Covid funds:
Republicans have been pushing to repurpose about $700 billion from the $1.9 trillion coronavirus package Democrats approved in March against unanimous GOP opposition.
Biden offered to repurpose $75 billion in Covid funds, backing off his previous opposition but falling well short of the Republican demand.
The White House has also stressed that any new spending would be on top of $400 billion in projected federal spending over five years if current programs continue.
“I have a hard time seeing this go ahead because Republicans’ plans always have baseline included; I don’t think Senate Republicans are interested in $1 trillion in new spending, or changing the tax cuts … or raising other taxes — and that’s been clear from Day 1,” a source familiar with the talks told Politico. “It’s a great dance but at some point the music is going to stop. Clearly nobody wants to be holding the bag.”
