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White House criticizes latest GOP infrastructure offer but says talks will continue

U.S. President Joe Biden speaks to reporters upon his departure from the White House in Washington, U.S., May 25, 2021.

Kevin Lemarque | Reuters

WASHINGTON — The White House responded to Senate Republicans’ latest offer for an infrastructure deal Thursday, with press secretary Jen Psaki calling the additions “constructive” but saying the administration remains “worried” about how Republicans plan to pay for it.

“We note several constructive additions to the group’s previous proposals, including on roads, bridges and rail,” Psaki said in a statement shortly after Republicans unveiled their latest proposal.

“At the same time, we remain concerned that their plan still provides no substantial new funds for critical job-creating needs,” she said.

“Lastly, we are concerned that the proposal on how to pay for the plan remains unclear: we are worried that major cuts in COVID relief funds could imperil pending aid to small businesses, restaurants and rural hospitals using this money to get back on their feet after the crush of the pandemic.”

Psaki said the president looks forward to getting additional details from Republicans, and she pledged the White House would work with members of the House and Senate next week.

Senate Republicans unveiled their $928 billion infrastructure counteroffer Thursday morning, as the two sides see whether they can bridge an ideological and practical gulf to strike a bipartisan deal.

The offer was only one page long, and did not contain specifics about how to pay for the investments. Republicans have previously said they would finance the plan by repurposing Covid-19 relief funds already approved by Congress for state and local governments, and by instituting user fees on people who use the newly built infrastructure.

The Republican plan includes $506 billion for roads, bridges and major infrastructure projects, including $4 billion for electric vehicles. It also includes $98 billion for public transit and $72 billion for water infrastructure.

Biden’s latest offer to Republicans last week came in at $1.7 trillion — $600 billion less than his original plan. The president has urged the GOP to put at least $1 trillion into an infrastructure package.

To reach a deal, however, the sides would have to resolve not only a gap in the price tag but also differing visions of how to offset the spending.

Biden has proposed raising the corporate tax rate, closing loopholes, enhanced IRS enforcement and tax hikes on the very highest earners. The president argues that corporations and the wealthy must pay their “fair share” of the infrastructure improvements from which they stand to benefit.

But Republicans have so far refused to contemplate raising any taxes on corporations or the wealthy to fund the investments, calling any changes to the 2017 GOP tax cuts a “red line” they cannot cross.

In their counteroffer, Republicans again rejected Biden’s call to raise corporate taxes, contending they could cover infrastructure costs with funds already allocated by Congress or with transportation user fees.

Senate Minority Leader Mitch McConnell, R-Ky., told CNBC the GOP could make additional offers after Thursday’s proposal.

“We’re going to keep talking, and I understand the president is willing to keep talking,” he told “Squawk on the Street” on Thursday. “We’d like to get an outcome on a significant infrastructure package.”

The GOP proposal does not include Biden administration priorities such as $400 billion for home health care, $100 billion for electric vehicle consumer rebates or spending to upgrade housing and schools.

Sen. Shelley Moore Capito, a Republican leading the talks, said Thursday the sides are “inching closer” in negotiations ahead of Memorial Day, the date by which the White House wanted to see progress in bipartisan negotiations.

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