Republicans unveil $568 billion counteroffer to Biden's infrastructure plan

Republicans unveiled a $568 billion infrastructure framework Thursday -- their answer to President Joe Biden's far more expansive $2 trillion package.

The newly released GOP framework focuses exclusively on "core" infrastructure items like roads and bridges, broadband, airports, waterways, rails, ports and public transit. It excludes other big-ticket items in Biden's proposal, including explicit funding for electric vehicles, housing and home care.

Sen. Shelley Moore Capito, the top Republican on the Senate Environment and Public Works Committee, led the Republican counteroffer effort. She said the plan, which proposes funding through user fees rather than a corporate tax hike, is meant as a jumping off point for bipartisan negotiations on infrastructure, a key priority for the Biden administration.

"This is a serious attempt to offer a serious robust, the most robust plan we've put forward as Americans," Capito said. "This is an offer that is on the table and deserves a response."

With two proposals now on the table, Senate moderates will come into increasing focus to bridge the gap between them. Sen. Joe Manchin, D-W.Va., who admitted to having issues with the Biden package, said Wednesday that a bipartisan group of moderate senators would consider both packages and may look to find a "comfortable" in-between.

"We know that the Democratic proposal has been kind of all-inclusive," Manchin said. He said the group will contrast that with the GOP proposal and try to find something that's "comfortable, a bit more bipartisan."

But there's quite a divide to bridge. Republicans have decried Biden's package from the start for its expansive scope.

The Biden package includes funds for things more traditionally understood to be infrastructure, like roads, bridges, airports and water ways, but it also proposes a boost to the power grid, would create a network of electric vehicle charging stations, allocates funding for home care and provides funding for public buildings like schools.

Transportation Secretary Pete Buttigieg, who was on Capitol Hill Wednesday to defend the president's plan, urged senators on the Appropriations Committee to adapt an expansive view of what infrastructure could be.

"At a moment like this when we know an internet connection is as important as an interstate connection in today's economy we think it's absolutely time to have a wider concept of the idea of infrastructure," Buttigieg told the committee.

But Republicans aren't biting. The very concept of what defines infrastructure has been a sticking point in the administration's package from the onset, and the Republican framework aims to narrow the field.

The package proposes $299 billion for roads and briges, $61 billion for public transit, $20 billion for rails, $35 billion for drinking water, as well as funding for other "core" areas like ports and waterways, airports and broadband.

"This is a very constructive proposal, and as you can see, it consists of actual real infrastructure," Sen. Pat Toomey, the top Republican on the Senate Banking Committee, said Thursday. "While President Biden would like to do all kinds of things that have nothing to do with infrastructure, my view is we can have that discussion at some point in time ... "

The more narrow package could earn the blessing of Minority Leader Mitch McConnell, who as recently as Wednesday decried the Biden package on the Senate floor.

"They've assembled a patchwork of left-wing social engineering programs and want to label it infrastructure," McConnell said of his Democratic colleagues. "Climate action is infrastructure, police accountability is infrastructure, care giving is infrastructure, Supreme Court reform is infrastructure."

Republicans also introduced a new way to fund their proposal. Unlike the Biden package, which he proposes funding through a hike in the corporate tax rate, Republicans are proposing a combination of repurposed unused government funds and user fees.

The GOP framework is not terribly specific on how it intends to garner the funds necessary to cover the cost in full. It suggests relying on fees generated by individuals who most benefit from the infrastructure the bill will fund and repurposing already appropriated but so-far unused federal funds.

The particular funding streams were not specified. In past highway packages, user fees have included a tax on gasoline, but Republicans have argued a new system may be needed to appropriately tax drivers of electric vehicles.

Biden has said he is open to negotiation with Republicans.

But the way they plan to pay for the proposal is likely a non-starter for the president, who has repeatedly promised that American's making under $400,000 would not see a tax hike to fund his plan.

The administration signaled Wednesday that it sees user fees, like those suggested in the Capito framework, as a tax hike. Buttigieg threw cold water on a user-funded proposal Wednesday.

"I would stress that in the context of the jobs plan we have a proposal that funds these once-in-a-lifetime capitol investments on its own terms," Buttigieg said. "It's important to the president not to propose a plan that would raise taxes on Americans making less than 400,000 a year."

But a corporate tax hike is wildly unpopular with Republicans, who view it as a reversal of the Trump 2017 tax cuts.

"We should do it without damaging the tax reform that gave us the best economy of my lifetime," Toomey said, pointing to the strength of the economy before the COVID-19 pandemic. "You don't get back there by ruining the tax reform that helped us get there."

Not all Democrats are ready to sign on to a corporate tax hike either. Manchin has said publicly he does not support an rate raise at the level Biden is proposing, and he's signaled that it's making other moderate Democrats uncomfortable.

If Democrats choose to go it alone on infrastructure by using a procedural tool which allows them to bypass the 60 vote threshold currently needed, it will require all 50 Senate Democrats to get in line. Without Manchin's sign-off, the Biden package could founder.

Manchin suggested Wednesday he might favor a more narrow approach, not entirely unlike the Republican pitch.

"Almost everything that was in the presidents bill there's need for that," Manchin said. But he argued the bill is just too expansive.

"Right now infrastructure is needed and that's one we think could bring us all together," he said.