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.

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 fresh 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 paying for it. Its 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 the statement.

The Senate Republican group, led by Sen. Shelley Moore Capito of West Virginia, also 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 Biden administration 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 an infrastructure deal. Sen. Pat Toomey of Pennsylvania said the group identified $700 billion in unused spending from state and local aid, virus testing and the revamped child tax credit that could be devoted to a new economic package.

"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.

But that's unlikely to gain widespread support among Democrats. A group of six Democrats championing the beefed-up child tax credit which includes Sens. Michael Bennet of Colorado and Sherrod Brown of Ohio; Reps. Rosa DeLauro of Connecticut and Suzan DelBene of Washington issued a statement opposing it.

"It is absolutely outrageous that our Republican colleagues have proposed raising taxes on American families - and doubling child poverty - by clawing back the CTC expansion to pay for an infrastructure bill," they said.

"I think it's a mistake to proceed in a small way"

Liberals assailed the Republican plan as inadequate in size and scale. "I don't really think this is a serious counteroffer," Sen. Elizabeth Warren of Massachusetts 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 bipartisan progress. The parties still sharply disagree on overall spending levels and even the basic definition of infrastructure.

The White House is pushing for a slew of domestic measures in its two-part plan such as universal pre-K and free community college, which Republicans strongly oppose. Meanwhile, the GOP favors constraining infrastructure spending to physical elements like roads, bridges, and ports, as well as broadband.

Republicans are also insisting on financing a plan with new charges on electric vehicle drivers and other user fees, while leaving the 2017 GOP tax cuts for large firms untouched. The White House views user fees as a violation of its campaign pledge to not raise taxes for households earning below $400,000 annually.

The crawling pace of the talks is starting to cause frustration among liberals seeking bold action. Some cautioned against a skinny infrastructure deal, given it could imperil the social measures many Democrats favor and garnered public popularity.

"I think it's a mistake to proceed in a small way, when the moment is demanding a robust response to the economic collapse due to COVID," Sen. Kirsten Gillibrand of New York told Insider. She singled out national paid leave and affordable childcare as the initiatives most at risk of falling out of a plan entirely.

"It's important that when the infrastructure train leaves the station, childcare not be left behind," Warren said in an interview. "The whole point of infrastructure is so that people can go to work. That means roads and bridges, and for parents it means childcare."

She emphasized its potential benefits for women, saying, "It's time now to produce good-paying jobs for women and that means making investments into childcare workers and pre-school teachers."

Yet 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.