The Daily Update: G-21

Later today President Biden will invite a group of bipartisan senators to the White House to discuss a framework for a compromised infrastructure package. Jen Psaki, the White House press secretary, said that ‘Senior staff had two productive meetings today with the bipartisan group of Senators who have been negotiating about infrastructure’ adding that ‘The group made progress towards an outline of a potential agreement, and the President has invited the group to come to the White House tomorrow to discuss this in person’.

Initially, Biden was seeking around USD2.3tn to be spent on everything from bridges to broadband, as well as money to fight climate change and provide care for children and the elderly. He then trimmed the offer to about USD1.7tn in an unsuccessful bid to win the GOP support that was needed to get the 60 votes required to advance most legislation in the evenly split 100-seat Senate.

After a counteroffer from the Republican’s was rejected a couple weeks ago, the President turned to the ‘G-21’, a bipartisan group of 21 senators (11 Republicans, 9 Democrats and 1 independent). These senators have taken a more balanced approach. The group has been working on a USD1.2tn, eight-year infrastructure plan, with a mix of new and repurposed funding. The framework now includes USD559bn in new spending, a source familiar with the talks said. Previously, the group had discussed USD579bn in new spending.

One of the major sticking points has been how to pay for the plan. Biden has pledged not to increase taxes on Americans earning less than $400k a year, while Republicans want to protect the cut in corporate taxes introduced by Trump in 2017.

As always with these plans, the devil is in the details.