Republicans Promise Counteroffer as Infrastructure Talks Falter

WASHINGTON — With bipartisan negotiations faltering, President Biden and Senate Democrats are facing difficult decisions about how to salvage their hopes of enacting a major new infrastructure package this year, and waning time to decide whether to continue pursuing compromise with Republicans or try to act on their own.

Senate Republicans who have been negotiating with the White House said on Tuesday that they would produce a counterproposal to Mr. Biden’s latest $1.7 trillion offer, promising a plan by Thursday that could amount to $1 trillion in public works spending over eight years. But it is unclear whether the two sides can reach common ground, and a group of centrist senators in both parties were quietly discussing a backup option should the talks stall.

At the same time, many Democrats have grown wary of the prospect of a bipartisan deal as Republicans have continued to push to scale back Mr. Biden’s original $2.3 trillion proposal to a fraction of its size, while rejecting his calls to raise taxes on high earners and corporations to pay for the package.

Several Democrats are eager for party leaders to abandon the effort to win over Republicans and instead try to use the fast-track budget reconciliation process to muscle through Mr. Biden’s $4 trillion economic plan for both a sweeping infrastructure investment and an expansion of child care, education and work force support with a simple majority.

But that option, too, faces obstacles amid opposition from moderate Democrats who have pushed Mr. Biden and their leaders to find an accord with Republicans — or at least try to — before resorting to the same approach Democrats used to pass the stimulus relief bill in March without any Republican votes.

“There’s no magic date and there’s no magic time,” Senator Joe Manchin III of West Virginia, a key Democratic vote, said on Tuesday. “We have to find something reasonable, and I’m always looking for that moderate, reasonable middle, if you can.”

Mr. Manchin is part of a bipartisan group of senators — including Susan Collins of Maine, Rob Portman of Ohio and Mitt Romney of Utah, all Republicans, and Kyrsten Sinema, Democrat of Arizona — who are discussing their own infrastructure proposal that could surface should the talks between Senate Republicans and Mr. Biden fail. The group is considering a narrower infrastructure plan than Mr. Biden’s, paid for in part through revamping user fees, including the gas tax and a new fee for electric vehicle drivers, and repurposing funds from the pandemic relief bill.

They have intensified their talks in recent days as the negotiations between the White House and Republicans led by Senator Shelley Moore Capito of West Virginia have run into obstacles. The Republicans, who had previously outlined a $568 billion plan that the president said was inadequate, swiftly rejected Mr. Biden’s latest offer, which shaved more than $500 billion off his original proposal. They charged that White House officials had persuaded Mr. Biden to walk back promises to further scale down his plan.

Both lawmakers and Biden administration officials insisted that talks would continue, but the president has set Memorial Day as a soft deadline to gauge whether the talks have a chance of producing a deal. The thorniest issues remain, including how to define infrastructure and how to pay for the legislation.

“We are anxious to have a bipartisan agreement,” Ms. Capito said. “I think that we’ve got good momentum, but we’ll see what their reaction is.”

White House officials said that Mr. Biden personally signed off on the counteroffer they gave Republicans on Friday, and that there was no daylight between the president and his staff in the talks. They declined to comment further on the Republican proposal on Tuesday afternoon.

Mr. Biden “directs his team as it relates to what he wants to see on negotiations, what kind of proposals he wants to see,” Jen Psaki, the White House press secretary, told reporters on Tuesday. “But this is an ongoing negotiation. We’re eager to see what the Republicans proposed or what their counterproposal looks like, and it sounds like we’re going to see that in the next few days.”

Administration officials grew frustrated with Republicans last week over their refusal to accept more spending and embrace some of Mr. Biden’s highest priorities, like building a national charging network for electric vehicles. They have challenged Republicans to propose ways of paying for the bill that would not raise taxes on the middle class.

Ms. Capito and other Republicans remained adamant that they would not support undoing elements of the 2017 Republican tax law as a way to finance the legislation, a central element of Mr. Biden’s proposal. On Monday, administration officials said in interviews that they opposed Republican calls to repurpose hundreds of billions of dollars in assistance for state and local governments to instead fund infrastructure.

Some Republican lawmakers have drawn encouragement on that effort this week from new remarks by the Harvard economist Lawrence H. Summers, a former Treasury secretary under President Bill Clinton, who wrote in an opinion article this week that some state and local aid should go to infrastructure instead.

“For the most part states do not need the rescue,” Mr. Summers said in an email this week. “It will over time be used for low priority measures like tax rebates that add to the overstimulation of the economy. Spreading the spending out over the long term and applying to public investments that increase productive potential is the best way forward.”

The lack of progress in bipartisan negotiations reflects the challenge Mr. Biden and his party face in steering his $4 trillion economic agenda into law. It includes investments in physical infrastructure like roads, water pipes, broadband internet and a wide range of energy initiatives meant to combat climate change. It also includes what the White House calls “human infrastructure”: investments in health care, education, paid leave, child care and other efforts to help Americans work and earn more.

Democratic leaders have said that the Senate’s top rules official determined that they could reopen this year’s budget blueprint — the same one that carried the pandemic relief plan enacted in March — at least once more and potentially use it to advance another fiscal package under reconciliation. But questions remain about how to move forward with that step, and they would need all Democrats, including Mr. Manchin and Ms. Sinema, to do so. And so far, they have refused to commit to a strategy for the infrastructure plan beyond advancing legislation this summer.

“It has always been our plan — regardless of the vehicle — to work on an infrastructure bill in July,” Senator Chuck Schumer, Democrat of New York and the majority leader, said on Tuesday. “That’s our plan, to move forward in July.”

The centrist senators appear to be positioning themselves to help prevent Democrats from cutting Republicans out of the process entirely.

Mr. Romney said he wanted “to make sure that we don’t interfere with the process going on” between the White House and Ms. Capito, and it was unclear whether the group would make its plan public.

“They’re on the front burner,” Mr. Romney said of Ms. Capito’s group. “We’re kind of a back-burner backup.”

Luke Broadwater contributed reporting.