White House reduces cost of infrastructure proposal in counteroffer to GOP lawmakers

White House officials on Friday presented a counteroffer to Republican lawmakers on their infrastructure and jobs package that reduced the size of the proposal from $2.25 trillion to $1.7 trillion, according to White House press secretary Jen Psaki.

The revised proposal reduced the funding request for broadband to match the offer put forward by Republicans and shifted investments in roads, bridges and other projects out of the proposal and into other legislation in order to come closer to the roughly $600 billion Republican counterproposal.

Psaki suggested the corporate tax hikes remained in the counteroffer and reiterated President Joe Biden’s belief that the wealthiest Americans and corporations can afford a modest tax hike in order to “pay for middle class jobs.”

A team — including counselor to the President Steve Ricchetti, White House director of legislative affairs Louisa Terrell, National Economic Council Director Brian Deese, Commerce Secretary Gina Raimondo and Transportation Secretary Pete Buttigieg — presented the counterproposal to Republican lawmakers over video conference at a meeting that started shortly before 1 p.m. ET on Friday.

“In our view this is the act — the art, I should say — of seeking common ground,” Psaki told reporters at a White House briefing.

Psaki continued: “This proposal exhibits a willingness to come down in size, giving on some areas that are important to the President — otherwise they wouldn’t have been in the proposal — while also staying firm in areas that are most vital to rebuilding our infrastructure and industries of the future, making our workforce and our country more competitive with China.”

Though the topline was reduced, the counteroffer from the White House remains significantly larger than the Republican counterproposal and doesn’t back off of the corporate tax hikes that Republican leaders have described as their “red line” in negotiations.

Biden has suggested he is open to a corporate income tax rate between 25% and 28% to pay for his sweeping proposal. The corporate rate, which is currently 21%, had been as high as 35% before former President Donald Trump and congressional Republicans cut taxes in 2017.

But the tax hike, which would not affect those making $400,000 or less, has been met by fierce opposition by Republican lawmakers.

Senate Minority Leader Mitch McConnell and House Minority Leader Kevin McCarthy told reporters earlier this month that they told the President they’re not willing to budge on the 2017 tax cuts signed into law by Trump, calling the issue the GOP’s “red line.”

GOP aides say the administration’s proposal wasn’t received positively at the meeting. The reaction from Hill Republicans is full on frustration and they do not view this as serious negotiating, according to one GOP aide. Republicans are going to try to work out where to go from here and what number might be a counter.

Psaki said Friday the counterproposal reflects the White House’s view that the Republican offer excluded key components that they consider critical to rebuilding the nation’s infrastructure.

“The counteroffer also reflects our view that the Republican offer excludes entirely some proposals that are key to our competitiveness, key to investments in clean energy and industries of the future and rebuilding our workforce, including critical investments in our power sector, building and construction, workforce training, veterans hospital construction, and the care economy,” Psaki said.

Psaki continued: “So we push for increased funding levels for critical transportation infrastructure like rail, especially considering China’s level of investment in such projects, as well as the elimination of lead pipes that poisoned drinking water and resilience projects as extreme weather events, as we’ve seen around the country, continue to become more common as a result of climate change.”

The broadband component of the infrastructure package being reduced to match the Republican’s counterproposal is significant because the President has put Vice President Kamala Harris in charge of getting the broadband piece passed and implemented. Biden announced Harris’ leading role during his joint address to Congress last month.

Biden’s initial proposal would have invested $100 billion in order to give every American access to affordable, reliable and high-speed broadband. The proposal would build a high-speed broadband infrastructure in order to reach 100% coverage across the nation and would aim to promote transparency and competition among internet providers.

The initial proposal Biden put forward was $2.25 trillion and focused on improving the nation’s crumbling infrastructure and shifting to greener energy over the next eight years.

The plan was the first of a two-part proposal to help the nation’s economy recover from the coronavirus pandemic. The second part is the American Families Plan.

A group of Republican senators led by Sen. Shelley Moore Capito of West Virginia unveiled a framework of a counterproposal last month with a price tag in the neighborhood of $600 billion that focuses on roads, bridges and more traditional infrastructure.

Capito and Sen. Roger Wicker of Mississippi, the top Republican on the Commerce Committee, told CNN at the time that the plan would be fully paid for by user fees and other offsets and would not raise taxes.

This story is breaking and will be updated with additional information.