The Senate GOP wants to divert stimulus money for infrastructure — but the White House says it may come at the expense of restaurants and hospitals

  • The White House is pushing back against GOP efforts to redirect stimulus money to fund infrastructure.
  • Press secretary Jen Psaki said in a statement that it “could imperil pending aid to small businesses, restaurants and rural hospitals.”
  • Both parties remain far apart on the size and scope of a jobs plan.
  • See more stories on Insider’s business page.

The White House on Thursday cautioned Senate Republicans against redirecting stimulus money to fund infrastructure, saying that step could come at the expense of rural hospitals, restaurants, and small businesses that have been financially devastated by the pandemic.

The statement from White House press secretary Jen Psaki comes after a group of Senate Republicans introduced an amended $918 billion infrastructure offer to President Joe Biden, one featuring only a modest bump in new spending. Only a quarter of it — or $257 billion — appears to be new government spending beyond what’s already been approved by Congress.

The one-page “roadmap” is largely focused on upgrading physical infrastructure such as roads, bridges, and water systems, along with expanding broadband access. But it prompted the White House to single out the lack of specifics on how to pay for it. That’s been a key area of disagreement in bipartisan negotiations now in their third week.

“We are concerned that the proposal on how to pay for the plan remains unclear: we are worried that major cuts in COVID relief funds could imperil pending aid to small businesses, restaurants and rural hospitals using this money to get back on their feet after the crush of the pandemic,” Psaki said in a statement.

The Senate Republican group, led by Sen. Shelley Moore Capito of West Virginia, sent a memo to the White House with additional details. “We propose to offset the Roadmap with a combination of repurposed funding from previous COVID relief packages, user fees, and infrastructure financing,” the memo said.

The White House signaled that negotiations would continue, saying the proposal contained “constructive” additions like more funding for roads, bridges, and rail. “We appreciate the hard work that went in to making this proposal and continuing these negotiations,” Psaki said.

Republicans are pressing to include money from Biden’s $1.9 trillion stimulus law in any infrastructure deal. Much of it would likely come from the $350 billion set aside for states and local governments.

“We believe that repurposing these funds needs to be a really important part of how we fill this gap,” Sen. Pat Toomey of Pennsylvania said at a news conference unveiling the plan.

Some centrist Democrats say they’re open to the possibility of channeling existing stimulus aid to other uses. “I’ve been continuing to press localities to use some of that for broadband,” Sen. Mark Warner of Virginia told Insider.

Liberals assailed the Republican plan. “I don’t really think this is a serious counteroffer,” Sen. Elizabeth Warren said in an MSNBC interview.

The negotiations are poised to blow past the Biden administration’s self-imposed Memorial Day deadline aimed at ensuring steady progress. The parties still sharply disagree on overall spending levels and even the basic definition of infrastructure. Democrats want to include safety net spending, which Republicans strongly oppose.

That’s caused progressives to start losing patience with the crawling pace of the talks, but other centrist Democrats say there shouldn’t be a rush to strike a deal with the GOP.

“Be patient,” Sen. Tom Carper of Delaware, chair of the Environmental and Public Works committee, told reporters. “Not forever, but be patient.”

Carper later told Insider he will soon encourage the White House to invite the four Democratic committee chairs along with Republican ranking members  for another high-level infrastructure meeting after the upcoming Memorial Day recess.

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