Pelosi de-links Biden economic agenda, making the fate of tax increases unclear

September 27, 2021

House Speaker Nancy Pelosi (D-Calif.) on September 27th removed the link between passage of the $1.2 trillion bipartisan infrastructure bill being contingent on advancing the $3.5 trillion budget reconciliation bill, which includes tax increases on corporations and wealthier taxpayers.

Until now, passage of one bill was dependent upon the approval of the other. That is no longer the case in the House. 

It is not clear how this new relationship will affect the fate of either bill, but it does raise questions as to whether both pieces of legislation can pass the House. The destiny of the tax increases included in the budget reconciliation bill is also unclear.  

At issue is the Democratic Party. Its members are divided in their support of the bills. One faction supports the infrastructure bill and opposes the budget reconciliation bill. The other group supports the budget reconciliation bill but not the infrastructure bill.

It would require the support of nearly all House Democrats to pass either bill from the chamber. House Republican support is expected to be lacking for the infrastructure bill and nonexistent for the budget reconciliation bill.

The House is expected to vote on the infrastructure bill on Thursday, which has already passed the Senate. If it passes, it could be signed into law by President Joe Biden. However, several House Democrats have vowed to oppose it so it might not pass. Only a handful of House Republican are expected to back it, and their support is not expected to counter Democrats’ opposition that would allow the bill to pass.

The reconciliation bill’s road to enactment is much longer. If it were to pass the House, it would go to the Senate where lawmakers in that chamber have already vowed to change it. If the House and Senate produce different bills, those differences must be hashed-out before the legislation can pass Congress. Reaching consensus will be time consuming and a finalized product might slip into October, or even later.

Speaker Pelosi told reporters on Monday night that there isn’t enough time to continue the hold on passing the infrastructure bill while working out the kinks associated with the reconciliation bill. Funding for highway and transit programs expires on September 30th. The infrastructure bill would extend funding for these programs, which is why the vote is scheduled for the day the funding expires.

If the infrastructure bill passes the House and is signed into law, the likelihood that both chambers will pass the budget reconciliation bill becomes less clear. Democratic leaders have consistently said that the goal is for both chambers to pass both bills, and for them to be signed into law. But many lawmakers within the caucus don’t agree with that goal and might oppose passing the budget reconciliation bill. If the legislation does not advance from the House to the Senate, it will not become law - which means the tax increases included in the bill do not become law. Still, the situation if very fluid regarding the fate of this bill. 

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