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June 7, 2021

Still No Agreement From White House, Republicans On Infrastructure

U.S. Senate Republicans and President Joe Biden have continued to negotiate a top-line spending number for infrastructure over the last few weeks. While the two sides have come closer together, there still is no agreement.

To recap where things stand: before Memorial Day, President Biden revised his spending plan from $2.3 trillion to $1.7 trillion. Then, on May 27, Republican senators said they would be willing to spend $928 billion, an increase from their original $568 billion proposal. Republicans have said they will pay for the new spending by redirecting unused funds from COVID-19-related spending programs and by gradually raising the gas tax.

While Senate Democrats quickly rejected the GOP proposal, President Biden continued to meet with Republicans’ top negotiator, Sen. Shelley Moore Capito (D-W.Va.) during the week after Memorial Day.

According to White House press secretary Jen Psaki, in a phone call on June 4, Sen. Capito increased the Republicans’ counterproposal by $50 billion, but Psaki said the White House still does not think that number is enough even though CNN reported Sens. Capito and Sen. Roger Wicker (R-Miss.) both have said President Biden has indicated that he would be willing to accept an infrastructure package that totaled around $1 trillion in spending.

On the tax side, various news outlets have reported the president is willing to compromise on his demands for a higher corporate tax rate. Specifically, according to The New York Times President Biden has said that, instead of raising the corporate income tax rate to 28 percent, he would settle for a new minimum corporate tax rate of 15 percent. (Meaning no business would pay less than this rate no matter how much they can deduct.)

That news came as the nonpartisan Tax Foundation released a report that said President Biden’s tax plan would reduce U.S. gross domestic product (GDP) in the long run by 0.5 percent and result in more than 100,000 fewer U.S. jobs.

Infrastructure negotiations are likely to continue this week.

Those efforts include those by Sen. Mitt Romney (R-Utah), Sen. Joe Manchin (D-W.Va.), and a small, bipartisan group of House members who are drafting their own infrastructure plan in case the president and Senate Republicans cannot finalize an agreement.

In related news: the U.S. Senate Committee on the Environment and Public Works has unanimously approved a federal highway spending authorization bill. The bill would spend $303.5 billion over five years to build roads and other surface transportation projects.

Additionally, on June 4, Democrats on the House Transportation and Infrastructure Committee unveiled a $547 billion transportation funding package that would ramp up spending on rail and transit and would encourage states to repair existing roads rather than build new ones. Read more here.

These efforts are distinct from the broad infrastructure package the White House and Senate Republicans are currently negotiating — but, eventually, either piece of legislation could form the “basis” of that package. Interested in making your voice heard on infrastructure?

Use this tool from the National Association of Manufacturers to send a message to members of Congress asking them to advance an infrastructure package that helps manufacturers without risking our competitiveness.

And remember to check out MSCI’s www.build-now.org microsite, which contains information about why it is so imperative that federal lawmakers invest in infrastructure now, and to join the conversation on social media by using #LetsBuildNow.

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