Biden, Senate Republicans end infrastructure talks without deal


US President Joe Biden has ended infrastructure talks with Senate Republicans after weeks of intense negotiations between the two sides, according to top negotiator Shelley Moore Capito.

“Despite the progress we made in our negotiations, the president continued to respond with offers that included tax increases as his pay for, instead of several practical options that would have not been harmful to individuals, families, and small businesses,” Capito, Republican senator from West Virginia, said in a statement on Wednesday.

“While I appreciate President Biden’s willingness to devote so much time and effort to these negotiations, he ultimately chose not to accept the very robust and targeted infrastructure package, and instead, end our discussions.

“After negotiating in good faith and making significant progress to move closer to what the president wanted, I am disappointed by his decision,” Capito added.

Biden’s original proposal, with a price tag of $2.3 trillion, included funding to improve transportation infrastructure and high-speed broadband, revitalise American manufacturers and small businesses, boost the country’s research and development, as well as modernise schools and early learning facilities, reports Xinhua news agency.

The White House had previously lowered the overall price tag to $1.7 trillion, while the Republicans then offered a $928 billion counteroffer, up from an earlier $568 billion proposal.

White House Press Secretary Jen Psaki said in a statement that Biden had informed Senator Capito on Tuesday that the latest offer from her group “did not, in his view, meet the essential needs of our country to restore our roads and bridges, prepare us for our clean energy future, and create jobs”.

“He offered his gratitude to her for her efforts and good faith conversations, but expressed his disappointment that, while he was willing to reduce his plan by more than $1 trillion, the Republican group had increased their proposed new investments by only $150 billion,” Psaki continued.

Psaki added that the President also spoke with three senators on Tuesday and urged them to continue their work with other Democrats and Republicans to develop a bipartisan proposal that he hopes will be more responsive to the country’s pressing infrastructure needs.

In addition, Biden spoke to Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi, the top two Democrats, and encouraged them to begin crafting an infrastructure bill that can pass the Senate with a simple majority, adopting a process known as budget reconciliation.

This would mean it could clear the Senate without any Republican votes.

Calling the 2017 tax cut “a huge windfall” for corporate America and those at the very top, Biden recently said it had poured billions of dollars into the pockets of CEOs, widening the pay gap between CEOs and their workers.

Urging corporate America and the wealthiest 1 per cent of Americans to “pay their fair share”, Biden said his tax policies, which include raising the corporate rate, the top personal income tax rate and the capital gains rate, will help pay for what he proposed to spend on infrastructure, education and childcare in 15 years.

In late May, the White House unveiled a $6 trillion budget proposal for fiscal year 2022, which included Biden’s plan to increase investment in infrastructure, education, health care and beyond, drawing mixed reviews from lawmakers and budget watchers.

The proposal calls for total federal spending to run above $6 trillion throughout the next decade, and rise to $8.2 trillion by fiscal year 2031, reaching the highest sustained levels in decades.

Committee for a Responsible Federal Budget, a watchdog group, argued that the budget adds “too much” to already record-level debt over the next decade and “does far too little” to address rising structural deficits over the long term.

Republicans, however, lashed out at Biden’s tax hike proposals.

Senator Tim Scott of South Carolina said the President’s tax hike proposals, if enacted, would lower wages, kill jobs and shrink the US economy.

Senate Minority Leader Mitch McConnell had previously said that he thinks no Republican would vote in favour of raising taxes to pay for the infrastructure plan.

Refuting these arguments, Sachs said the Republicans have “consistently over-valued the benefits of low taxes and under-estimated the costs of low taxes”, accusing them of representing the interests of the super-rich.

With slim majorities in both chambers of Congress, Democratic leaders are poised to face challenges in unifying the party, if they end up using the budget reconciliation process.

In the 50-50 split Senate, the party can not afford to lose a single vote, while in the House of Representatives, the party can lose just three Democratic votes, with unanimous Republican opposition.