WASHINGTON (AP) - Negotiations between the White House and Senate Republicans over President Joe Biden's $2.3 trillion infrastructure plan are hitting a crucial stage ahead of talks Friday after the latest GOP offer left some dismay in the administration that there wasn't more movement off the Republicans' initial $568 billion proposal.
Republicans did increase their offer and have been working in good faith with the White House, according to a Republican granted anonymity to discuss the private talks.
But the slog of the closed-door talks is certain to spark fresh worries from Democrats that time is slipping to strike a compromise. The president's team had set a soft Memorial Day deadline to determine if a deal was within reach.
At the White House, Press Secretary Jen Psaki said "productive conversations" are underway on Capitol Hill.
The White House team is expected to resume talks with the senators Friday. "We're looking forward to constructive conversations," Psaki said.
Securing a vast infrastructure plan is Biden's top priority as he seeks to make good on his campaign pledge to "build back better" in the aftermath of the coronavirus crisis and the economic churn from a shifting economy. With narrow Democratic majorities in the House and Senate, the president is reaching out to Republicans for support on a potentially bipartisan approach rather than relying simply on his own party to muscle the proposal to passage. But Republicans are refusing Biden's idea of a corporate tax hike to pay for the investments.
Senate Republican leader Mitch McConnell reiterated Thursday on Fox News that tax hikes on corporations or the wealthiest Americans are nonstarters. Republicans are unwilling to undo their signature domestic accomplishment with Trump, the 2017 tax cuts, which reduced the corporate rate from 35% to 21%. Biden proposes lifting the corporate tax to 28%.
"If they're willing to settle on target a infrastructure bill without revisiting the 2017 tax bill we'll work with them," McConnell told Fox's Larry Kudlow, a former Trump adviser. But he said a package topping $2 trillion or more "is not going to have any Republican support."
The administration and the GOP senators have been in talks ever since Biden met with a core group of Republican negotiators last week over the possibility of working together on a plan. The White House dispatched the Transportation and Commerce secretaries and top aides to Capitol Hill to meet with the Republicans late Tuesday after the president asked the senators to provide more details on their initial offer.
The lead Republican negotiator, Sen. Shelley Moore Capito of West Virginia, was encouraged by the talks and expected the White House to be back in touch by week's end, her office said.
But there was "not a significantly changed offer" from the Republicans during their meeting with the administration this week, according to a person granted anonymity to discuss the private negotiations.
The White House's hopes for a bipartisan deal on infrastructure have cooled but they have not abandoned the effort, according to an administration official not authorized to speak publicly about the private conversations. There was some dismay that the Republican counteroffer did not substantially budge from the party's original $568 billion proposal, leaving it far short of the White House's plan, according to the official.
A team of West Wing officials, including senior advisor Steve Ricchetti and head of legislative affairs Louisa Terrell, were expected to talk Friday with Republicans on the proposal.
The administration had set a soft deadline of Memorial Day to gauge if enough progress had been made to forge a bipartisan deal or whether it would need to proceed along party lines. Biden has reveled in the face-to-face negotiations, aides said, and has expressed hope to bring Republicans along. And West Wing officials have been hearted by the public comments made by some of the GOP negotiating team, including Capito, the official said.
But the outward talks of progress have not translated into the two sides getting much closer to a deal. Beyond the significant gap in the two sides' visions for the size of the package, there has been little discussion of how to reach an agreement on how to pay for it.
One GOP senator in the talks suggested tapping unspent funds from the massive COVID-19 aid package to help pay for the infrastructure investment, the Republican said. Other funds could be tapped from uncollected tax revenues or public-private partnerships.
One strategy that had gained momentum would be for Biden to negotiate a more limited, traditional infrastructure bill of roads, highways, bridges and broadband as a bipartisan effort. Then, Democrats could try to muscle through the remainder of Biden's priorities on climate investments and the so-called human infrastructure of child care, education and hospitals on their own.
But, administration aides believe, if such an "infrastructure only" bipartisan deal is far smaller than Biden's original proposal, the White House risks a rebellion from Democrats who could claim that the president made a bad deal and missed the moment to pass a sweeping, transformational package.
For now, Republicans and the White House are tangled over the definitions of infrastructure as Biden seeks new investments in hospitals, child care centers and electric vehicles for this first bill, and Republicans remain more narrowly focused on traditional roads, bridges and other "hard" infrastructure projects. McConnell has said they could go as high as $800 billion on a package.
But House and Senate Democrats say much of what Republicans proposed so far is simply existing spending and nowhere near that amount.
At the same time, House Republicans are working on their own alternative to Biden's plan.