State of Play: Where Negotiations Stand on Biden’s Economic Agenda

September 22, 2021

Progress on President Joe Biden’s “Build Back Better” agenda is in flux as House Democrats struggle to move it forward.  

President Joe Biden last spring proposed two plans aimed at aiding an economy impaled by the coronavirus. Since then, congressional lawmakers have labored to put the president’s proposals into legislative text and are now struggling to pass them.

There are two bills at play: the $1.2 trillion bipartisan infrastructure bill and a budget reconciliation package that could cost up to $3.5 trillion and includes tax increases on corporations and wealthier individuals.

Infrastructure bill:

The infrastructure bill passed the Senate in August with the support of 19 Republicans and all 50 Democrats. The House has not passed this bill. It is expected to start this process next week, but talks are very fluid for when this debate will begin.

A few House Republicans are expected to support the bill, but up to 48 House Democrats have threatened to oppose it. Under this tally, the bill would not pass the House. Because of this, it is not clear when Speaker Nancy Pelosi (D-Calif.) will bring the bill to the chamber’s floor for a vote.

Reconciliation bill:

The fate of the budget reconciliation bill is also unclear as Democrats are split in their support for it.

A party divided:

The media has reported that House Democrats are split in supporting the reconciliation and infrastructure bills, but it also exists in the Senate.

In short, "Group A" of Democrats support the infrastructure bill while "Group B" of Democrats support the reconciliation bill. What’s more, these factions have vowed to oppose the bill that they don't support unless the bill they do support has already passed.

What has been less reported is that lawmakers within these groups have problems with the budget reconciliation bill beyond its passage relative to the infrastructure bill, according to Punchbowl News($).

Summarizing the article:

  • Lawmakers in Group B have vowed to oppose the reconciliation bill if it does not address the following issues:
    • Increase funding to historically black colleges and universities;
    • includes a pathway to citizenship, which the Senate Parliamentarian has already denied;
  • Lawmakers in Group A have vowed to oppose the reconciliation bill if it does not modify the cap on the State and Local Tax Deduction.

Bloomberg reports additional issues:

  • Some House moderates have opposed allowing Medicare to negotiate prices for a wide swath of high-cost drugs, something that would help pay for the bill;
  • Others have argued the latest legislative text doesn’t do enough to confront climate change;
  • Progressives also fault the House Democrats’ tax package as not doing enough to raise taxes on the ultra-wealthy;
  • Differences remain over how much extra funding should go to elements including the care of elderly Americans and free community college.

Senate Democrats have also raised issues with the budget reconciliation bill:

‘Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) have said they need the reconciliation price tag to drop. They’ve made a bunch of demands -- too many to list here,’ Punchbowl News reports.

The point:

If the House could simultaneously approve the infrastructure bill and the reconciliation bill (which would be hard to pull off), there would still be issues with the reconciliation bill that could keep it from passing the chamber. The same goes for the Senate, regarding passage of the reconciliaiton bill. 

Tight margins:

Republicans in both chambers are expected to oppose the budget reconciliation bill. This means that the House can only lose three Democratic votes and the Senate cannot lose a single Democratic vote before it fails. These are very tight margins, and it remains to be seen if Democratic leaders can corral enough support for these bills.  

On the infrastructure bill, certain House lawmakers have tied its fate to passing the reconciliation bill and it's not clear if passage will occur.  

Complicating a complicated situation:

The debt ceiling is the total dollar amount that the federal government can issue debt and it must soon be raised. The current legislative effort to raise the debt ceiling is expected to fail and another path must be found to successfully advance it.

Arguably, the easiest way to raise the debt ceiling is to use the reconciliation process, which is being used to advance the budget reconciliation bill that could cost up to $3.5 trillion and increase taxes on corporations and wealthier individuals. The reason why it would be the easiest path is because it can pass both chambers with only Democratic support.

Using reconciliation to raise the debt ceiling means that two reconciliation bills would be in play: the $3.5 trillion bill and the debt ceiling bill.

The debt ceiling might need to be raised by mid-October, at the earliest. This means that lawmakers would have to focus on creating the reconciliation bill and put it through its budgetary paces before then. Some estimate that it could take three weeks to have a debt ceiling reconciliation bill ready for final votes in the House and Senate, which would be mid-October.

If Democratic leaders choose to use reconciliation to raise the debt ceiling – a time consuming task that needs to be completed in a timely fashion – then is final action on the $3.5 trillion bill delayed? The answer to this question is not clear.

Worth repeating:

The situation is fluid on Capitol Hill regarding the fate of these bills. In other words, anything could happen.  

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