August 24, 2021
After enduring a false start on Monday, the House of Representatives on Tuesday approved a procedural vote that allows the chamber to move forward on three pieces of legislation:
Today's vote does a few things:
The fight over the $1.2 trillion Bipartisan Infrastructure Bill:
House Speaker Nancy Pelosi (D-Calif) and moderate House Democrats argued for weeks over when to vote on the $1.2 trillion Bipartisan Infrastructure Bill.
Speaker Pelosi wanted to postpone the vote on the infrastructure bill until the $3.5 trillion tax and spending bill was approved by the Senate, which could be in the fall.
Moderate House Democrats, however, wanted the vote on the infrastructure bill to be as soon as possible, and not wait for the Senate to pass the $3.5 trillion tax and spending bill.
In a nod to moderate Democrats, Speaker Pelosi agreed to hold a floor vote on the $1.2 trillion Bipartisan Infrastructure Bill by September 27th regardless of when a vote occurs on the $3.5 trillion tax and spending bill. This agreement converted Democrats opposing the legislation into supporters of it.
It is unclear how progressive House Democrats will react to this agreement. They wanted a vote on the infrastructure bill and the $3.5 trillion tax and spending bill to happen at roughly the same time. That goal may no longer be reachable.
The $1.2 trillion Bipartisan Infrastructure Bill could be signed into law immediately. The $3.5 trillion tax and spending bill, on the other hand, will take weeks if not months to complete. It must first pass several congressional committees and then be approved by the Senate parliamentarian before it can pass both chambers of Congress and be presented for a presidential signature at the White House.
House Majority Leader Steny Hoyer (D-Md) has designated that the first two weeks of September will be “committee work weeks” to complete the reconciliation bill. But it is not clear if the reconciliation process can be completed during Hoyer's timeframe.
House lawmakers aren't scheduled to return to Washington until September 20. A big reason for this is because two Jewish holidays occur during the first two full-weeks of September. It will be difficult for lawmakers to hold hearings during this period.
A wrinkle regarding the $3.5 trillion tax and spending bill:
Sen. Kyrsten Sinema (D-Ariz.) said she will oppose the $3.5 trillion tax and spending bill because it is too expensive. If she stays true to her word, the bill will not pass the Senate (passage in the upper chamber requires all Senate Democrats to support the bill).
If the $3.5 trillion tax and spending bill doesn’t pass the Senate then the fate of the $1.2 trillion Bipartisan Infrastructure Bill hangs in the balance.
Progressive House Democrats have threatened to oppose the infrastructure bill if they don't get to vote on the $3.5 trillion tax and spending bill. If they keep their word, passage of the $1.2 trillion Bipartisan Infrastructure Bill will rely on Republican support, which could happen.
What is currently unknown is if Sen. Sinema will agree to a lower-priced tax and spending bill. If she does, that could mean fewer tax increases in the final package. However, at this point, nothing is confirmed on what will pass both chambers, or what tax provisions will be included in the bill.
That being said, Rep. Katherine Clark (D-Mass), the assistant to the House Speaker, suggested on Tuesday that her party might be open to passing a tax and spending bill with a price tag lower than $3.5 trillion.
Below is a breakdown of the Bipartisan Infrastructure Bill and the budget instructions regarding the $3.5 trillion tax and spending bill.
The $1.2 trillion Bipartisan Infrastructure Bill:
The Senate has approved this bill. If the House approves the legislation without changing it, the bill can be signed into law by President Joe Biden. If the House makes changes to the bill, those modifications must be approved by the Senate before it can be signed into law.
Most provisions included in the legislation relate to direct spending by the Federal government, but there are several tax-related provisions (that do not raise individual or corporate tax rates) noted below:
The $3.5 trillion tax and spending bill:
This bill stems from the budget resolution, which has passed both chambers.
The budget does not get signed into law. Instead, it instructs the committees on how to create legislation that could get signed into law.
For example, the budget directs the tax-writing Senate Finance Committee and the House Ways and Means Committee to “reduce the deficit by not less than $1,000,000,000 for the period of fiscal years 2022 through 2031.”
It also provides guidance to the tax-writing committees on where to raise revenue:
Further, it directs the Senate Finance Committee to make the following “investments” that are within its jurisdiction:
Lastly, the budget stipulates that tax increases should not fall on people earning less the $400,000 a year, small businesses or family farms.
It will be up to the tax-writing committees on what tax provisions will be included in the bill. Details on those provisions are expected to be released this fall.
The House Ways and Means Committee is expected to begin publicly working on the bill the week of September 6.
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