President Biden set a soft deadline of Memorial Day for infrastructure talks with Republicans to yield significant progress, saying that he was prepared to move ahead without GOP support if necessary. Memorial Day has come and gone, but Biden is keeping the talks going for at least one more week. He will host Sen. Shelley Moore Capito (R-WV), the Republican point person on infrastructure, at the White House Wednesday afternoon for another round of negotiations.
Capito and other Senate Republicans last week issued a $928 billion infrastructure plan, including just $257 billion in new spending, to counter Biden’s revised $1.7 trillion proposal, which is entirely new spending.
Capito told “Fox News Sunday” that she spoke with Biden by phone on Friday and he said, “Let’s get this done.” Capito said she believes that means that the president’s “heart is in it” — but she acknowledged that the two sides still have some fundamental differences.
“We disagree on the definition of infrastructure and we've been working with the president to bring it back to the physical core idea of infrastructure that we’ve worked so well on in the past,” she said, adding that Republicans continue to want to rely on user fees and unused Covid relief funds rather than Biden’s proposed tax hikes to pay for an infrastructure package.
‘Fish or cut bait’: Transportation Secretary Pete Buttigieg told CNN’s “State of the Union” on Sunday that the White House is “getting pretty close to a fish or cut bait moment” on the bipartisan talks. “This can’t go on in terms of the condition of our infrastructure. Therefore, the negotiations can’t go on forever either,” he said.
Buttigieg said there needs to be a “clear direction” for the infrastructure negotiations by next week, when senators return to the capital.
Sen. Lindsey Graham (R-SC) said Tuesday morning that a bipartisan infrastructure deal is “very possible,” adding “there’s a deal to be had on an infrastructure package around a trillion dollars if [Biden] wants to go down that road.”
White House allies reportedly expect Biden to make a decision on using the process called budget reconciliation, which would allow Democrat to pass a bill without Republican votes, by mid-June if talks stall.
The bottom line: Time is running out and there are still some differences that may prove too big to bridge. Goldman Sachs economists said Friday that it’s hard to see how a deal comes together. "Although bipartisan discussions on an infrastructure package are continuing, the already low odds of success appear to be dwindling further," economist Alec Phillips said in a note to clients. The Goldman analyst said that Democrats will likely pass one large, combined infrastructure package via reconciliation, with House passage possibly coming in July and Senate approval waiting until September or October.
The final package, Phillips said, will likely scale back Biden’s plans and end up totaling slightly more than $3 trillion, with tax increases offsetting about half that amount.