WASHINGTON – Congressional negotiators and the Biden administration on Monday attempted to claw back a nearly $ 600 billion bipartisan deal to invest in roads, water pipes and other physical infrastructure, after Republicans rejected key to paying for the plan and resisted Democratic plans for an initial vote Wednesday.
Senators and administration officials are still working on the details of the deal, including how to ensure that a plan to fund it gets 60 votes for Senate passage. White House officials expressed confidence on Monday that the deal could be finalized. But his fate was uncertain.
Mr. Biden is pushing his economic agenda in parts. The bipartisan deal is supposed to be Stage 1 – with a much bigger Democratic bill to follow. But weeks after announcing a deal, the bipartisan group has neither released legislation nor received external confirmation that it is fully funded. A senior negotiator said over the weekend that the group had abandoned a key plan included in the deal that would have increased revenues by giving the IRS more power to catch tax evaders.
Republicans have come under pressure to oppose this method of funding from conservative anti-tax groups, who say it would allow auditors to harass business owners and political targets. Democrats say the increased enforcement would target large businesses and people who earn more than $ 400,000 – and note that improving tax enforcement has been a bipartisan goal of governments for decades.
Yet on Monday night, Senator Chuck Schumer of New York, the majority leader, held a procedural vote to begin debating the bipartisan agreement, even without the text of the plan, on Wednesday. Mr Schumer said if senators agreed to consider infrastructure legislation, he would either propose the bipartite deal, if it materialized this week, or a series of individual infrastructure bills that were approved on a bipartite basis by Senate committees.
The plan was intended to force negotiators to finalize details and a critical mass of Republicans to commit to moving the deal forward, with Democrats keen to push forward legislation before the Senate leaves for its August recess. Mr Schumer said he had the support of the top five Democratic negotiators involved in the talks.
“This is not a deadline for determining all the final details of the bill,” he said. A vote of support Wednesday, he added, would signal that “the Senate is ready to start debating and amending a bipartisan infrastructure bill.”
On Monday, Biden pushed for passage of the deal during remarks at the White House, where he promoted his administration’s economic progress. But administration officials made it clear later today that their patience for finalizing the bipartisan deal was running out.
“We believe it is time to move forward with this vote – with action from Congress,” White House press secretary Jen Psaki said at a press briefing. When asked what the administration’s backup plan was if the plan failed to erase the test vote, Ms Psaki objected.
“We’re not there yet,” she said. “There is a lot of good work that has happened. Two days is a lifetime in Washington, so I don’t think we’re going to make predictions about the death of the infrastructure package.
Republican leaders have said they want to see the legislation before voting on a deal.
“We have to see the bill before we vote to go. I think that’s pretty easy to understand, ”Republican leader Sen. Mitch McConnell of Kentucky told reporters on Monday. “I think we need to see the bill before we decide whether or not to vote for it. “
Democrats argued that negotiators had almost a month to work out the details and that the Senate had already conducted procedural votes without a finalized text of the bill – including when Mr McConnell led his caucus in an unsuccessful attempt to repeal and replace the Affordable Care Act in 2017.
The biggest sticking point is how to pay for the plan. The IRS plan was expected to bring in more than $ 100 billion in new tax revenue over a decade.
It is not known what the group will turn to as a replacement. White House officials and the top 10 Senate negotiators – five Democrats and five Republicans – were working Monday to find a new source of revenue.
Ohio Republican Senator Rob Portman and key negotiator on Sunday raised the possibility of overturning a Trump-era rule that changes how drug companies can offer discounts on health plans to Medicare patients optional. The Congressional Budget Office estimated in 2019 that it would cost $ 177 billion over 10 years, and the rule has yet to be implemented.
Ms Psaki told reporters that the administration is “open to alternatives, very open to alternatives to that end.”
“But we will let these conversations take place in private and support them on our side,” she said.
Senators were to meet virtually Monday evening as they continued to haggle over the details. The group met for over two hours on Sunday evening.
Mr Biden continued to push for legislative action on Monday, making his economic policies, as well as vaccination efforts, a key driver of accelerating growth. He promised his other agenda items would help Americans work more and make more money while limiting price increases, fending off criticism from Republicans.
Administration officials and Mr Biden say the Democrats’ $ 3.5 trillion plan – the larger bill that would follow the bipartisan infrastructure bill – will ease pricing pressures by increasing the price. productivity. The president said the proposals would free Americans to work more through subsidized child care, national paid holidays and other measures, as well as improve the efficiency of the economy.
The spending “will not increase inflation,” Biden said. “This will reduce the pressure on inflation.”
He also said he trusted the Independent Federal Reserve and its chairman, Jerome H. Powell, to handle the situation. The Fed is responsible for maintaining both price stability and maximum employment.
“As I made clear to Chairman Powell of the Federal Reserve during our recent meeting, the Fed is independent. It should take whatever steps it deems necessary to support a strong and lasting economic recovery,” Mr. . Biden. “But whatever different views some might have on current price increases, we should be united on one thing: embracing the bipartisan infrastructure framework, which we shook hands with – we we are shaking hands. “
Mr Biden used more of the speech to push for the $ 3.5 trillion plan, which Democrats aim to pursue without Republican support through a process known as budget reconciliation, which bypasses obstruction of the Senate.
Describing the various social and environmental initiatives he hopes to include in the plan, the president has repeatedly stressed the need for government action as a way to raise living standards and create jobs.
This plan contains the gist of Mr Biden’s $ 4 trillion economic program that is not included in the bipartisan bill, such as expanding access to education, building more housing. affordable and energy efficient incentives for low carbon energy through tax credits and a wide range of other social programs to invest in workers.
Republicans have also amplified concerns about inflation since Democrats passed a $ 1.9 trillion pandemic relief bill in March. In a letter to his conference this week, California Representative Kevin McCarthy, the Republican leader, said that “the prices of everything from gasoline to groceries are skyrocketing,” and he pledged that “we will continue to hold Democrats to account for their reckless management of the economy.”
Mr Biden’s economics team has repeatedly stated that increases in inflation are largely the product of the pandemic and will fade in the months or years to come.
Mr Biden dismissed a question from a reporter after the speech about the potential for runaway inflation, which he said no serious economist expected.
Margot Sanger Katz and Catie edmondson contributed reports.