Biden shifts strategy on infrastructure deal

President Joe Biden today called off talks with top Republicans on an infrastructure bill, and is instead leaning on a bipartisan group of US senators to develop a compromise package that can pass.

Biden had spent weeks trying to reach an infrastructure deal with the US Senate Transportation and Infrastructure Committee's ranking member Shelley Moore Capito (R-West Virginia), but she said Biden called her today to end negotiations. The two sides had made limited progress on the two central issues for the bill: its overall size and how to pay for the new spending.

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

The White House said on the call Biden expressed "disappointment" that while he cut the size of his infrastructure plan to $1 trillion from $2 trillion, Republicans only agreed to increase new investments by $150bn. Republicans for months refused to budge on their position that the bill should stick mostly to traditional infrastructure, such as roads and bridges, and not increase taxes.

The administration now hopes other US senators can make progress on a bipartisan deal, while Biden leaves town on a trip to Europe on 9-16 June. Biden has separately spoke with US senators Joe Manchin (D-West Virginia), Kyrsten Sinema (D-Arizona) and Bill Cassidy (R-Louisiana) to push them to continue infrastructure talks.

"He 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," the White House said.

Before talks with Capito ended, the White House had missed a self-imposed deadline to decide on a path forward around the Memorial Day holiday weekend. Senate Republicans in their latest offer on 4 June pledged to add $50bn onto a prior offer, a $310bn increase in baseline spending. But that was still well short of Biden's proposal for about $1 trillion in new spending.

Senate Democrats still have the option to pass large parts of their infrastructure plan through a maneuver named budget reconciliation, which would avoid a filibuster but needs unanimous support from Democrats because of their 50-50 majority in the chamber. But Manchin's push for a bipartisan plan has become a major obstacle to that strategy.

"I think we can come to that compromise to where we will find a bipartisan deal," Manchin said in a televised interview on 6 June. "I am very, very confident of that."

If the White House is still able to negotiate a bipartisan deal on infrastructure, Democrats worry it would likely have to exclude major climate change items, such as a national "clean energy standard" for the grid and the removal of tax preferences for oil and gas companies. Democrats could pass those items through a subsequent bill, but doing so could be a difficult political challenge.

"I am now officially very anxious about climate legislation," US senator Sheldon Whitehouse (D-Rhode Island) said on Twitter yesterday. "I do not see the preparatory work for a close Senate climate vote taking place in the administration."

Biden has proposed to pay for his infrastructure plan by raising taxes on corporations, which Senate Republicans say is a "red line" that would cost their support. Republicans have also raised concerns with US treasury secretary Janet Yellen's landmark deal on 5 June with G7 countries for a global minimum tax on corporations, which she says would stop a "race-to-the-bottom" in taxation.

"We continue to caution against moving forward in a way that could adversely affect US businesses and ultimately harm American workers and jobs at a critical time in our country's economic recovery," House of Representatives Ways and Means ranking member Kevin Brady (R-Texas) said.

By Chris Knight