Infrastructure Negotiators Agree to Framework for Package

Recent talks have focused on how to finance the package, which drafts showed would spend $579 billion above expected federal levels for a total of $973 billion over five years and $1.2 trillion if continued over eight years.

People familiar with the agreement said Wednesday night that the funding in the framework resembled levels in the drafts, with some putting the five-year new-spending proposal at $559 billion, because $20 billion in broadband funding would be repurposed from Covid-19 relief.

“For the most part we have a framework, but there are components within that framework that need to be worked out,” said Sen. Jon Tester (D., Mont.), one of the lawmakers negotiating the package.

The senators involved in the talks said they would begin reaching out to party leaders and other lawmakers to build support for the emerging agreement. A group of 21 senators had joined the bipartisan efforts, with a smaller set of 10 lawmakers leading the talks with the White House.

“I would say that we’re very, very close and we’re now going to do the outreach that is important to grow the vote from the middle out,” said Sen. Rob Portman (R., Ohio).

White House press secretary Jen Psaki said officials had productive meetings with the bipartisan group and “made progress towards an outline of a potential agreement.” She said President Biden invited the group to come to the White House on Thursday to discuss the emerging deal in person.

Senate Majority Leader Chuck Schumer (D., N.Y.) indicated Wednesday night that he and House Speaker Nancy Pelosi (D., Calif.) would support the framework.

“We’ll let them announce it first, let’s see it. But we support the concepts we have heard about,” Mr. Schumer said in brief remarks to reporters alongside Mrs. Pelosi.

Headed into Wednesday’s meetings, lawmakers in the bipartisan Senate group said they had largely agreed on how to spend the proposed $973 billion. The package is expected to include funding for improvements to roads, bridges, transit, airports and enhanced infrastructure for broadband, water and electric vehicles, but exclude large investments in housing, home care, and workforce development Mr. Biden proposed in his initial $2.3 trillion infrastructure plan.

How to pay for the package had consumed much of the recent negotiations, which intensified in recent days ahead of a two-week Senate recess. Republicans had rejected a White House plan to raise taxes on corporations to cover the cost of infrastructure investments, and the White House in turn had opposed lawmakers’ ideas to index the gas tax to inflation and charge fees to electric vehicles to finance the spending.

That left lawmakers considering a mix of public-private partnerships, existing federal funds, and enhancing enforcement at the Internal Revenue Service to collect taxes that are owed but not paid as ways to raise revenue. Republicans and the White House had disagreed on how much revenue could come from enhanced tax enforcement, a subject of disagreement among experts.

The progress in the talks puts Mr. Biden and lawmakers in reach of a long-elusive goal in Washington: a bipartisan agreement on infrastructure spending. An earlier effort between Mr. Biden and a separate group of Senate Republicans collapsed earlier this month, with each side accusing the other of not going far enough toward reaching a compromise. Under the Trump administration, lawmakers made halting attempts toward reaching a bipartisan deal, but never found an agreement on financing a package.

Any bipartisan infrastructure agreement will need the support of nearly the entire Democratic caucus, giving each lawmaker leverage to issue his or her own demands. A handful of liberal Senate Democrats have said they won’t back a more modest bipartisan deal unless Democrats also pass along party lines a package that includes significant efforts to address climate change.

Progressives in the House have also said their support for a narrower infrastructure deal is contingent on knowing that support exists for a second, larger package moving at the same time that would include investments in child care, education, long-term care for seniors and other issues.

“Investing in the caring economy is going to be an incredibly important part of what we attempt to accomplish and will accomplish for the people this year,” House Democratic Caucus Chairman Hakeem Jeffries (D., N.Y.) told reporters Wednesday. “What the vehicle ultimately is to do that remains to be seen.”

Mr. Schumer met late Wednesday with Mrs. Pelosi and administration officials to discuss the bipartisan proposal, as well as the emerging contours of a separate and broader Democratic package of climate and social support programs, which together compose the bulk of Mr. Biden’s legislative agenda.

Mr. Schumer met last week with Democrats on the Senate Budget Committee, which is drafting a resolution that would enable it to pass legislation tied to the budget with just a simple majority, rather than the 60 votes most bills need, a process known as reconciliation.

“One can’t be done without the other, all of us agreed to that. We can’t get the bipartisan bill done unless we’re sure of getting the budget reconciliation bill done. We can’t get the reconciliation bill done unless we’re assured of the bipartisan,” Mr. Schumer said.

Senate Budget Committee Chairman Bernie Sanders (I., Vt.) said he was working on a reconciliation package of up to $6 trillion that would fund all of Mr. Biden’s infrastructure proposal, as well as his child care, education and affordable-housing plans and climate provisions, among others.

Democrats are also discussing provisions to lower the cost of prescription drugs by allowing Medicare to negotiate with drug companies and using those savings to expand Medicare benefits and lower its eligibility age.

And some Democrats from New York and New Jersey are intent on repealing the $10,000 cap on state and local tax deductions, often referred to as SALT, imposed in the GOP’s 2017 tax overhaul. Senate Democrats have said they are considering at least partially altering that cap.

“The bottom line is when they gutted SALT and capped it at $10,000, it was a direct assault on hardworking men and women of labor,” said Rep. Josh Gottheimer (D., N.J.). Rep. Tom Suozzi (D., N.Y.) said that because union jobs were better-paying, those households were particularly hard hit by the limits on the tax deduction.

Yet unknown is whether more centrist Senate Democrats will be on board with a $6 trillion package, which is also expected to include tax increases. Some Republicans said they hoped that securing a bipartisan infrastructure deal would make it harder for Democrats to pass a second package along party lines.

“I think we need an infrastructure bill,” said Sen. Jerry Moran (R., Kan.), who has backed the bipartisan proposal. But he added that “a value that could come from this is the reduced pressure or justification that Democrats might feel if we do nothing. I’m sure that those who want to change the rules or use reconciliation have a stronger case to make if we do nothing.”

—Sabrina Siddiqui contributed to this article.

Write to Kristina Peterson at kristina.peterson@wsj.com and Andrew Duehren at andrew.duehren@wsj.com