Biden's infrastructure negotiations with Republicans collapsed. What happens now?

Long-running infrastructure negotiations between President Biden and a coalition of Republicans imploded on Tuesday, increasing the likelihood that Democrats go it alone on a sweeping, multitrillion-dollar spending package.  

The end of the talks between Biden and Sen. Shelley Moore Capito, the lead GOP negotiator, comes despite weeks of back and forth. The two sides – which each blamed the other for the collapse – were still deeply divided over the cost of an infrastructure package, which types of projects should be included and whether to raise taxes. 

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The Republican senators proposed a $928 billion counteroffer, which included about $330 billion in new spending, while Biden maintained that at least $1 trillion in new spending was needed to rebuild the nation's crumbling roads and bridges and invest in transit systems, green energy, elder care and Veterans Affairs hospitals. Biden had called for raising the corporate tax rate to 28% from 21% to pay for the measure.

Hours after the breakdown, however, a new bipartisan group emerged: Five Democrats and five Republicans began crafting a new path forward. Biden plans to engage the group even after he departed for his first overseas trip, to Europe. 

"The president is committed to moving his economic legislation through Congress this summer, and is pursuing multiple paths to get this done," White House press secretary Jen Psaki said in a statement.

But with Republicans adamantly opposed to any tax hikes to fund the measure, Democrats are also starting to independently pursue a massive infrastructure bill.

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"We’re pursuing two tracks: one bipartisan and one reconciliation," Senate Majority Leader Chuck Schumer told reporters on Tuesday, adding: "It may well be that part of the bill that'll pass will be bipartisan and part of it will be through reconciliation. But we're not going to sacrifice the bigness and boldness in this bill."

With narrow majorities in the House and Senate, Democrats have the option to bypass Republicans and approve the measure on a party-line basis using a procedural tool known as budget reconciliation. Democrats used the method earlier this year to muscle through the $1.9 trillion American Rescue Plan without any GOP votes. 

Still, it's unclear whether the party could secure the support of all 50 Democrats: Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona are both in the bipartisan group working on an infrastructure bill. Manchin also indicated on Tuesday that he wants to see bipartisan talks continue and is not ready to support passing a package without Republicans. 

Psaki said that Biden has spoken with Schumer and House Speaker Nancy Pelosi to "discuss the need to comment work on the budget resolution process so that legislation to advance the president's economic priorities and tax reform plans could move to the Senate floor in July." 

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In a statement, Capito, R-W.Va., said she was disappointed Biden ended the talks, but indicated support for the ongoing bipartisan effort. 

"While I appreciate President Biden’s willingness to devote so much time and effort to these negotiations, he ultimately chose not to accept the very robust and targeted infrastructure package, and instead, end our discussions," she said. "However, this does not mean bipartisanship isn’t feasible."