Infrastructure talks face new trouble as pressure mounts

WASHINGTON -- Senators ran into new problems Monday as they raced to seal a bipartisan infrastructure deal, with pressure mounting on all sides to show progress on President Joe Biden's top priority.

Heading into a make-or-break week, serious roadblocks remain. Disputes have surfaced over how much money should go to public transit and water projects. And other disagreements over spending and wage requirements for highways, broadband and other areas remain unresolved, as well as whether to take unspent COVID-19 relief money to help pay for the infrastructure.

Democrats and the White House sent a fresh "global" offer to resolve remaining issues, but it was rebuffed early Monday by Republicans as "discouraging" -- a setback for a hoped-for deal.

Biden, asked about the outlook, told reporters at the White House he remained optimistic about reaching a compromise.

Press Secretary Jen Psaki said, "We're encouraged as we've reached the final issues that need to be worked out, and are confident about the path forward."

Biden himself "worked the phones all weekend," she said, and is continuing to make calls. But Psaki acknowledged that "time is not endless," as the White House works to finish the package.

This week is crucial after more than a month-long slog of negotiations since Biden and the bipartisan group first celebrated the contours of the nearly $1 trillion bipartisan agreement in June.

The White House wants a bipartisan agreement for this first phase, before Democrats go it alone to tackle broader priorities in a bigger $3.5 trillion budget plan that's on deck. A recent poll from The Associated Press-NORC found 8 in 10 Americans favor some increased infrastructure spending, and the current package could be a political win for all sides as lawmakers try to show voters that Washington can work.

But as talks drag on, anxious Democrats, who have slim control of the House and Senate, could also try to pass the first legislation by themselves. Senate Majority Leader Chuck Schumer, D-N.Y., has said wants to pass the bipartisan package as well as the blueprint for a larger $3.5 trillion budget plan before the Senate leaves for its August recess.

Adding to the mix, Donald Trump issued a statement Monday disparaging Senate Republicans for even dealing with the Democrats on infrastructure, though it's unclear what influence he has. The former president had failed at an infrastructure deal when he was in office.

The bipartisan package includes about $600 billion in new spending on public works projects, the first phase of Biden's big infrastructure proposals.

The Democrats and the White House had sent what they called a "global" offer to Republicans on remaining issues late Sunday, according to a Democratic aide close to the talks and granted anonymity to discuss them.

But Republicans rebuffed the ideas, according to a GOP aide also granted anonymity to discuss the private talks.

The new proposal attempted to reopen issues that had already been resolved, the aide said, suggesting the White House will need to show more flexibility.

While much of the disagreement has been over the size of spending on each category, labor issues have also emerged as a flashpoint.

Democrats are insisting on a prevailing-wage requirement, not just for existing public works programs but also for new ones, according to another Republican granted anonymity to discuss the private talks. Those include jobs for new broadband and cybersecurity programs, for school buses and ferries, and a new infrastructure financing authority that would develop roads, bridges, electric vehicle charging stations and other projects, the aide said.

Transit funding has been a stubborn disagreement throughout the past several days of talks.

The bipartisan group originally appeared to be moving toward agreement on more money for transit. But Pennsylvania Sen. Pat Toomey, the top Republican on the Senate Banking, Housing and Urban Affairs Committee, which oversees public transit, raised questions. He cited, in part, previous COVID-19 federal relief money that had already been allocated to public transit.

Three rounds totaling nearly $70 billion in federal COVID-19 emergency assistance over the past year pulled transit agencies from the brink of financial collapse as riders steered clear of crowded spaces on subway cars and buses.

"Nobody's talking about cutting transit," Toomey said Sunday. "The question is, how many tens of billions of dollars on top of the huge increase that they have already gotten is sufficient? And that's where there is a little disagreement."

Typically, spending from the federal Highway Trust Fund has followed a formula of 80% for highways and 20% for transit.

Democrats and public transit advocates see expanded public transit systems as key to easing traffic congestion, combating climate change and curbing car pollution.

In the latest offer, Democrats said they would accept the Republican proposal on highway spending, contingent on Republicans agreeing to the Democratic position on public transit, the Democratic aide said.

Psaki has previously said transit funding "is obviously extremely important to the president -- the 'Amtrak President,' as we may call him."

The senators also appeared to have resolved issues around public water works funding. The group had an agreement to add $15 billion to deal with lead pipe contamination beyond funds already approved in a Senate water bill.

The final package would need the support of 60 senators in the evenly split 50-50 Senate to advance past a filibuster -- meaning at least 10 Republicans along with every Democratic member. Last week's test vote failed along party lines as Republicans sought more time to negotiate.

There are other remaining issues still unresolved around how to pay for the bipartisan package. The group is seeking a compromise after Democrats rejected a plan to bring in funds by hiking the gas tax drivers pay at the pump and Republicans dashed a plan to boost the IRS to go after tax scofflaws.

Meanwhile, Democrats are readying the broader $3.5 trillion package, which would go beyond public works to include child care centers and family tax breaks, paid for by increasing the corporate tax rate and the tax rate on Americans earning more than $400,000 a year.