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The White House has proposed a $1.7 trillion counteroffer on infrastructure to Senate Republicans, White House Press Secretary Jen Psaki said Friday, a significant decrease from President Biden’s initial $2.3 trillion proposal, made “in the spirit of finding common ground.”

Psaki announced the new offer while the White House is continuing to negotiate with a group of Republican senators led by GOP Senator Shelley Moore Capito. The group met with Mr. Biden last week, and has continued to meet with administration officials this week.

“This proposal exhibits a willingness to come down in size, giving on some areas that are important to the president — otherwise they wouldn’t have been in the proposal — while also staying firm in areas that are most vital to rebuilding our infrastructure and industries of the future,” Psaki said at the press briefing on Friday. 

Senators Capito, Roger Wicker, John Barrasso, Roy Blunt, Mike Crapo and Patrick Toomey were informed of the new offer in a call with White House officials Friday morning, a Republican official familiar with the call told CBS News. The Republicans had previously proposed a counteroffer of $568 billion, which many Democrats have dismissed as too small.

Psaki said that the new proposal dropped certain provisions on broadband and bridges, and would shift spending on “research and development, supply chains, manufacturing and small business” to other pieces of legislation being considered by Congress. But she also suggested that the president may still intend to pay for the proposal by raising the corporate tax rate, which Republicans oppose.

“The counteroffer also reflects our view that the Republican offer excludes entirely some proposals that are key to our competitiveness,” Psaki said, explaining that provisions on clean energy, workforce development, construction of veterans hospitals and on strengthening home care would remain in the bill.

Republicans have signaled some willingness to raise their offer. Senate Minority Leader Mitch McConnell suggested that Republicans might support a proposal as high as $800 billion, which is still significantly lower than the latest counteroffer from the White House. While they don’t want to raise corporate taxes, they have not come up with an alternative method for paying for an infrastructure bill, although some have suggested using unspent funds from previous coronavirus relief packages.

In the text of the memo outlining the counteroffer sent to Senate Republicans, obtained by CBS News, the White House said that Mr. Biden “fundamentally disagrees with the approach of increasing the burden on working people through increased gas taxes and user fees, regardless of where users live or the type of vehicles they drive.”

“As you know, he made a commitment to the American people not to raise taxes on those making less than $400,000 per year, and he intends to honor that commitment,” the memo said.

Although Mr. Biden has said that working with Republicans on a bipartisan basis is important to him, he has also said that “inaction is not an option” — hinting that if a deal is not reached, then Democrats may try to go it alone in passing the legislation.

“We will not be open to doing nothing,” Mr. Biden said in an event in April promoting the American Jobs Plan, his initial $2.3 trillion proposal.

Some Democrats are frustrated at the willingness of the White House to make concessions to Republicans. Progressives could rebel if the White House settles on a narrow package that focuses “traditional” infrastructure projects such as roads, bridges and highways. With the slimmest of majorities in both houses of Congress, Mr. Biden cannot afford to lose any support from his party.

Mr. Biden has also proposed a $1.8-trillion American Families Plan, which is focused on “human” infrastructure, with provisions on health care, child care and education. This proposal has also been met with skepticism by Republicans.

Fin Gomez, Ed O’Keefe and Jack Turman contributed to this report.