Manuel Balce Ceneta/AP Photo
Many of the ambitions President Biden had in his initial infrastructure proposal cannot be realized through this effort.
At 11am this morning, the Senate will complete work on its bipartisan infrastructure bill, the Infrastructure Investment and Jobs Act. Nothing was going to stop this freight train, which provides hundreds of billions of new dollars to, among other things, freight trains.
A bad score from the Congressional Budget Office showed that the bill would increase deficits by at least $265 billion ($350 billion by one account). No matter: None of the deficit-obsessed centrists who generated the package and its dodgy revenue offsets cared. They mumbled about benefits from long-term economic growth and productivity and put deficits to the side. There was a freak-out over one of the only measures forcing an industry to pay any price in the bill: a stricter reporting requirement for cryptocurrency transactions. But despite anger from lobbyists and allies in Congress, a compromise got quickly hammered out (and it might not even make the final bill). Bill Haggerty, a replacement-level freshman senator from Tennessee, denied unanimous consent for everything, forcing final passage at 3 in the morning on Tuesday. But, slow though the process may have been, the votes in favor actually increased as the process continued.
The result shows the power, in a 50-50 Senate, of a small group of centrists sticking together to force through their priorities. Dozens of amendment votes changed very little about the overall package, which still mostly matches the latest fact sheet. And yet ultimately, it’s one of those pieces of legislation that can simultaneously be called the biggest boost to infrastructure in U.S. history and a modest effort at the same time. A one-time boost of investment in physical infrastructure is welcome and should be cherished. But many of the ambitions President Biden had in his initial infrastructure proposal cannot be realized through this effort.
It’s an entire State of the Union agenda wrapped up in one bill.
It was going to be a stretch to replace the nation’s lead water pipes for Biden’s proposed $45 billion; this bill only provides $15 billion, and doesn’t mandate that it all go to replacing lead water pipes. The $65 billion for broadband deployment will continue to funnel money into the waiting mouth of incumbent cable and wireless providers, without requiring higher speeds or more competition; it will likely run into similar resistance to a truly equitable build-out. The transportation split still favors highways at a time when human-caused climate change is now seen as irreversible, thanks in part to decades of the same bias in favor of cars. One-third of the rail funding is subject to future appropriations and therefore might not even happen, and too much goes to repairs, rather than new services. The $20 billion for reconnecting historically severed minority communities remained whittled down to a trivial $1 billion, presumably so the White House could still include it in lists about the top programs “you don’t know about” in the bill.
The centrist bloc holding together the package didn’t waver on any of these concerns. Moreover, Biden’s “no double dipping” mandate means that these specific policies won’t get more money in a later package (specifically, in the $3.5 trillion reconciliation bill). But Democrats didn’t have the votes of Joe Manchin and friends to move forward on that go-it-alone measure without this bipartisan add-on, and Manchin has suggested that he’ll be a good soldier from here on out.
But the party’s frustration with the infrastructure has been mostly muted, because they look at it in the context of an overall level of public investment spending that would be bolstered by that reconciliation bill. The moment that the Senate finished the bipartisan package, they moved directly to the budget resolution, which will set the stage for that reconciliation bill. Senate Budget Committee chair Bernie Sanders (I-VT) on Monday called it “the most consequential piece of legislation for working people, the elderly, the children, the sick, and the poor since FDR and the New Deal of the 1930s.”
We got the first glimpse at it in the budget resolution, which only commits to a spending ceiling for each committee involved in the process. An associated memorandum hints at the policies under consideration. Most of them are familiar. There’s an extension of the Child Tax Credit and other tax credits for low income earners; Medicare and insurance exchange subsidy expansion; affordable housing investment; clean energy, manufacturing, and transportation tax credits; a clean electricity standard of 80 percent by 2030; a border tax for carbon; universal pre-kindergarten; child care subsidies; paid family and medical leave; tuition-free community college; Pell grant increases; the Civilian Climate Corps; and even elements of comprehensive immigration reform and the labor organizing PRO Act. It’s an entire State of the Union agenda wrapped up in one bill, and that’s not including the substantial tax increases on corporations and the rich that will offset much of the spending.
Critically, it doesn’t have to net out completely. According to the resolution, the $3.5 trillion will be offset by “a combination of new tax revenues, health care savings, and long-term economic growth.” The health care savings refers to the hundreds of billions that can be saved from allowing prescription drug price negotiation through Medicare; the long-term economic growth just reflects how much projected deficit lawmakers will be willing to run up. Under reconciliation there cannot be any deficit increase outside the 10-year budget window; as much of the spending is one time, that shouldn’t be a big problem. Given that Democrats have balked at most of Biden’s suggestions on taxes, not wedding all $3.5 trillion in investment to finding enough tax measures is a positive step.
There are differences between the “topline” one-pager and the more detailed memorandum, which may suggest what might drop out first. For example, the memorandum includes a lowering of the Medicare eligibility age, while the one-pager only highlights expansions of Medicare vision, hearing and dental. The PRO Act bits also don’t appear in that one-pager.
Also not part of the budget resolution: an increase in the debt limit, a nagging detail that Congress must dispense with by the fall. Recall that the debt limit just authorizes borrowing on money that the government has already authorized and spent. It’s been suspended under a prior agreement until recently, and Mitch McConnell has vowed to withhold all Republican votes for a fix without “structural” reforms (read that as massive spending cuts). Democrats have the option of raising the debt limit in reconciliation, but they’d have to commit to a specific borrowing number.
While only people burdened with a Washington brain would think that this would have any electoral bearing, Democrats have decided to call McConnell’s bluff. They’re going to insert the debt limit into the must-pass continuing resolution to fund the government, so Republican obstruction would shut down the government and risk the full faith and credit of the United States. When Treasury Secretary Janet Yellen called for dealing with the debt limit “on a bipartisan basis” on Monday, that confirmed the strategy.
So, the debt limit, which Democrats seem determined to not negotiate over, will be resolved on a separate track from the public investment package. The hurdles there are already big enough. Not only must all Democratic senators agree on a reconciliation bill, it must get the assent of virtually the entire House Democratic caucus, which has been fraying at both ends. House moderates have demanded a vote on the bipartisan bill first before moving to reconciliation, while House progressives have trash-talked the bipartisan bill, and want the Senate to finish both halves of the overall package before voting on anything. Speaker Pelosi has signaled that her chamber would seek changes to the reconciliation bill, too.
This could come to a head with the House version of the budget resolution, now slated to be taken up the week of August 23. Moderates are re-upping their demand for a vote on the bipartisan bill first. Pelosi has resisted that thus far, and probably has more votes to lose on her left if she goes back on that word. Moderates also want to see specifics on the reconciliation bill before voting for the budget resolution, and nobody’s ready to have that negotiation yet.
There is a lot of internal pressure among Democrats to deliver on campaign promises and come up with something they can sell that way. The reconciliation bill is key to whether tomorrow’s historians and today’s public assess the months of bipartisan negotiation as a fool’s errand or a prelude to a historic victory. With the barest of majorities, it’s going to take the rest of summer and some of autumn to answer that question.
