The GOP’s hopes on striking an infrastructure deal with Biden: torching his proposed tax hikes

• Senate Republicans increasingly believe striking an infrastructure deal with Biden could derail some of his tax hikes.
• Not every Senate Democrat is onboard with Biden’s planned programs or methods to finance them.
• Passing a party-line bill is “going to take a lot of coordination in our Democratic caucus,” one Senate Democrat said.
• See more stories on Insider’s business page.

Bipartisan negotiations on a roughly $1 trillion infrastructure package are poised to stretch into next week as lawmakers struggle to resolve key disagreements on how to finance it.

Democrats are pushing for a multitrillion-dollar package that would provide cash benefits to parents and set up universal pre-K, along with upgrades to roads and bridges – all paid for with tax increases on rich Americans and large firms.

But Senate Republicans are starting to believe that striking a deal with President Joe Biden on an infrastructure plan could torch the rest of his economic agenda, particularly some of those tax hikes and his planned social initiatives.

“I think if we can agree on an infrastructure package that’s paid for, we should,” Sen. John Cornyn of Texas told Insider. “But the Democrats want to do more on what I would call non-infrastructure and I assume they’ll try and do that in reconciliation.”

He went on: “The biggest challenge they have right now is not Republicans, it’s Democrats disagreeing on the use of reconciliation for that purpose.”

At least one senior Republican shared the assessment that Democrats’ use of the party-line approach could face a rocky path ahead, as all 50 Democrats in the Senate would have to remain united on a separate plan.

“It’ll be awful hard to get those moderate Democrats to be for that,” Sen. John Thune of South Dakota, the second-ranked Senate Republican, told reporters on Monday. “The stars are kind of lining up for an infrastructure bill. And if you do do something bipartisan on that, then I think doing something partisan on reconciliation – in some ways, with certain Democrats – it gets a lot harder.”

Progressives are pushing for Democrats to scrap the talks so a massive package can be approved without Republican support. In an interview with Insider last month, Sen. Kirsten Gillibrand of New York singled out national paid leave and affordable childcare as the pair of initiatives most at jeopardy of being dropped from the talks entirely.

Those liberals are at odds with centrist-leaning Democrats who want the discussions to continue. Some have already expressed unease with Biden’s tax hikes on the rich to finance new programs – which could potentially cut the scope of a follow-up package. Sens. Mark Warner of Virginia and Bob Menendez favor scaling back Biden’s tax increase on capital gains, Politico reported.

“I know there needs to be reconciliation,” Warner told reporters on Thursday. “But that also doesn’t mean that I accept all of what the president has proposed.”

Sen. Chris Coons of Delaware, a key Biden ally in Congress, said he favors striking a deal with Republicans if possible, but he also backs a separate party-line bill which he acknowledged has no margin of error.

“I am equally determined to move ahead with a reconciliation package that will delivers on Biden’s boldest policy proposals and I think it is possible for us to do both,” he said in a recent interview. “But it’s going to take a lot of coordination in our Democratic caucus.”