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The Bipartisan Bill is Step One of Many

Democrats might get hung up on the very next step, the budget resolution
for the $3.5 trillion reconciliation package.

 

Many of the ambitions President Biden had in his initial infrastructure
proposal cannot be realized through this effort. (Manuel Balce Ceneta/AP
Photo)

 

At 11 a.m. 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.

**Read all of our infrastructure coverage here**

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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."

[link removed]

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 alowering 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.

[link removed]

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 tocall
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.

David Dayen is the Executive Editor of The American Prospect.

 

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