Carpe Diem: The ‘Sausage Making’ of Legislation Is In Critical Negotiations In July

Last week the House laid down its marker in the infrastructure negotiations. House passes $760 billion transportation and water bill, making its pitch on infrastructure:

The House passed a roughly $760 billion transportation and water infrastructure bill Thursday, a measure that stakes out the chamber’s position in a debate over how to rebuild the nation’s roads, transit networks, water pipes and sewers.

The bipartisan Senate bill’s price tag is $973 billion over five years, or $1.2 trillion over eight years.

The package provides $343 billion for roads, bridges and safety programs, $109 billion for transit agencies and $95 billion for rail. It also includes $117 billion for drinking water programs and $51 billion for wastewater infrastructure. Amendments adopted over two days of debate added at least $44 billion to the bill’s price tag, mostly to support the adoption of electric vehicles.

The bill passed 221-201, with two Republicans joining Democrats in support.

Much of the debate over infrastructure has played out between President Biden and negotiators in the Senate, who outlined a bipartisan plan last week. But Rep. Peter A. DeFazio (D-Ore.), chairman of the House Transportation and Infrastructure Committee, said this week the spending envisioned in that bipartisan Senate plan and the House bill were close enough that he saw the potential for an agreement.

House Speaker Nancy Pelosi (D-Calif.) said the House’s Invest in America Act represents her chamber’s effort to seize a “once-in-a-century opportunity to rebuild America’s infrastructure,” while working to lift the middle class, help the environment and focus on equity.

The bill, written by Democrats, is weighted more heavily in favor of rail than the bipartisan plan, while pitching less for roads. DeFazio said he could support more money for roads and hoped that would encourage senators to back more money for trains.

“What their framework lacks is policy,” DeFazio said. “My bill is the transformative policy that the Biden administration wants.”

That is where aligning the dueling proposals could prove tricky. The White House has aggressively promoted the new Senate framework, but also has endorsed the House bill. Both sides of Congress remain divided on how money might be spent and how central climate change should be to infrastructure investments.

Congress typically takes up transportation funding bills every five years or so, approving federal programs that send money to state agencies to fund roads, buses and rail lines. The most recent approval is set to expire on Sept. 30. But with infrastructure at the top of the White House’s agenda this year, the bill has taken on outsize significance.

In a sign of the delicate dynamics between the chambers, Pelosi praised the bipartisan Senate framework while reiterating that a Senate bill embodying that framework would be taken up in the House only after specifics of a separate far-reaching budget bill with other priorities of President Biden’s are clear.

“Our caucus is very, very pleased with the bipartisan agreement that the president was able to achieve working with Democrats and Republicans in the Senate,” Pelosi said. “There are many good features to it in terms of numbers, but not policy.”

Senate Majority Leader Charles E. Schumer (D-N.Y.) is leading efforts to draft the legislative text to transform the bipartisan infrastructure framework into a bill. Senate aides said drafters are stitching together contributions from key Senate committees, including elements of bipartisan bills they have passed, as well as information from the 10 senators who reached the bipartisan deal, and the Biden administration.

Schumer has said he wants the Senate to consider both the bipartisan infrastructure bill and the broader, partisan budget bill in July. Given the time frame, DeFazio on Wednesday suggested that Senate leaders rely heavily on the House bill.

“I said … it took my staff seven months to write the policy. I don’t know how quickly you can write policy over there,” DeFazio said. He urged drafters to “adopt significant portions” of the House bill and parts of bills passed by the Senate’s Commerce Committee and Environment and Public Works Committee.

The House bill includes measures designed to cut greenhouse gas emissions from transportation, to hold states accountable for emissions on their roads, and to promote electric cars and buses. It would require states to consider alternatives such as transit before widening highways, and provides $14.5 billion for projects that would reduce carbon emissions or make transportation networks more resistant to extreme weather.

The House voted to add to the bill a $36 billion section on electric vehicles. It would fund charging infrastructure, provide grants to spur manufacturing and set deadlines for the federal vehicle fleet to switch to zero-emission vehicles and plug-in hybrids.

The bill’s transit funding is aimed at reducing a maintenance backlog and helping agencies provide more regular service. The bill proposes tripling funding for Amtrak to $32 billion and includes a grant fund, boosted to $30 billion, that could be used to develop high-speed rail projects.
It also includes a $45 billion fund to replace all lead water lines across the country.

The White House issued a formal statement of support Monday for the Invest in America Act, saying it “lays a strong foundation for achieving the President’s vision on infrastructure.”

[The version of the bill that passed the House does not include revenue-raising provisions typically included to help fund transportation spending. DeFazio said he expected they would be ironed out once the House and Senate began working together on a final version of the bill.

The bipartisan Senate framework includes ideas on how to cover the cost, such as ramping up tax enforcement and reusing coronavirus relief money, but experts have questioned whether those proposals would bring in enough money.

Therein lies the problem. The Hill reports that the bipartisan Senate framework does not have every Senate Democrat on board, including the Senate Finance Committee. Bipartisan spending deal meets fresh resistance from key Democrats:

The bipartisan Senate infrastructure deal endorsed by President Biden is facing fresh skepticism from key Senate Democrats who are concerned about plans to pay for the $973 billion package.

Two major financing mechanisms for the spending proposal — repurposing unspent funds for unemployment benefits and for state assistance — are meeting resistance from a group of Democratic senators who say higher corporate tax rates should be the primary revenue source.

Leading the charge is Senate Finance Committee Chairman Ron Wyden (D-Ore.), who has been working on his own proposal to pay for a major infrastructure package and is now waiting for Senate Majority Leader Charles Schumer (D-N.Y.) to signal when he can unveil the revenue-raising bill.

The Oregon Democrat is focused on raising an estimated $1 trillion from corporations as well as more than $300 billion from taxing unrealized capital gains, according to a source familiar with internal Democratic discussions.

Wyden has argued that corporations, which saw their tax rates slashed in 2017 under former President Trump, will benefit substantially from new infrastructure investment and must therefore shoulder much of the cost.

The bipartisan Senate proposal calls for raising money in a variety of other ways that shield corporations from tax increases. The most controversial among Democrats are plans to redirect unused unemployment insurance funds and repurpose $125 billion in untapped COVID-19 relief funding previously designated for state and local governments.

Democrats on the Senate Finance Committee, who were not involved in negotiating the bipartisan Senate package, are raising red flags about clawing money back from unemployment insurance accounts after Friday’s jobs report from the Labor Department showed the unemployment rate inched up to 5.9 percent in June.

About two dozen states — almost all led by GOP governors — have cut off the additional jobless benefits from Washington, arguing they were encouraging too many residents to stay on the sidelines instead of rejoining the labor force.

“I continue to believe that the real motivation of this from these Republican governors is essentially to find a way to cut back assistance to some of the most vulnerable Americans, particularly women, who are not just losing their $300. … It’s the extra weeks, it’s the coverage for gig workers; a lot of these people may have exhausted their state benefits,” Wyden said of efforts by Republicans to cut federal unemployment benefits included in the American Rescue Plan.

Implementing new “program integrity” rules for unemployment insurance in the bipartisan deal would reduce spending on jobless benefits by an estimated $80 billion, while recouping unspent unemployment funds would raise another $25 billion.

One progressive strategist predicted that while Wyden cares passionately about unemployment programs, he is likely to “stand down” and accept the bipartisan deal if Biden continues to back it and it retains support from enough Senate Republicans to overcome a filibuster.

Sen. Ben Cardin (D-Md.), another member of the Senate Finance Committee, said negotiators of the bipartisan Senate framework “used every conceivable thing other than normal increases in fees or taxes to pay for it.”

“It’s not the traditional types of revenues you expect to have,” he added.

Cardin raised concern over the plan’s proposal to recoup unspent unemployment assistance funding.

He argued that lawmakers didn’t intend for those funds from the $1.9 trillion American Rescue Plan in March to be spent immediately, as it may take months or even years for the nation to recover the jobs lost during the coronavirus pandemic. The U.S. is still down nearly 7 million jobs from February 2020.

“I don’t like it. I think that money was intended to be over a period of time, it was not intended to be spent immediately. It was to give an on-ramp to a stronger economy,” Cardin said.

Wyden, Cardin and other Democrats on the Finance Committee who haven’t signed onto the bipartisan Senate framework will have a chance to put their imprint on any resulting infrastructure bill as the proposal moves through the panel on its way to the Senate floor.

“I don’t think progressives in general are crazy about the pay-fors. I think people might accept them with an understanding that there are better things yet to come,” said Democratic strategist Mike Lux.

Party leaders have promised to tie the bipartisan Senate deal to a larger package that would raise taxes on corporations and the wealthy. The likely Democrat-only measure would need to pass under the budget reconciliation process in order to sidestep a GOP filibuster in the Senate.

Lux said the bipartisan Senate negotiators had to find creative ways to raise revenue because “Republicans don’t want to tax rich people.”

“Some of it may well be bullshit stuff that isn’t real,” he said of the more controversial funding streams.

Senate Budget Committee Chairman Bernie Sanders (I-Vt.) said last month he would not vote for the bipartisan Senate framework because of what he called a lack of “progressive” revenue sources.

[T]he bipartisan Senate framework, which remains in outline form, also faces skepticism from some Republicans who are leery of pumping $40 billion into the IRS to beef up enforcement activities, which could unleash a wave of future tax audits.

Note: McClatchy  News reported, “A dark money group founded by former Vice President Mike Pence’s ex-chief of staff will launch an ad campaign next week aimed at pressuring Kansas Sen. Jerry Moran into dropping his support for a bipartisan infrastructure plan.” Group led by former Pence aide launches ad campaign to pressure Moran on taxes.

“I imagine this will be a surprise to many Kansans that this is the type of bill Jerry Moran is supporting,” said Marc Short, a former chief of staff to Pence and founder of The Coalition to Protect American Workers, an anti-tax group formed in March.

Short’s group will launch a six-figure ad campaign Tuesday in Kansas focused on Moran in hopes of pushing the already wavering senator off of the plan.

The ad features hundreds of faceless men in black suits marching in unison as a narrator ominously warns, “If Joe Biden gets his way, they’re coming: IRS agents.”

The bipartisan infrastructure plan doesn’t raise taxes, but it includes $40 billion for the Internal Revenue Service, which has seen its budget drastically shrink in the last decade. The additional funding is meant to step up enforcement and catch tax evaders, ultimately bringing in more revenue to the federal government.

But the ad warns viewers the agents will be “aggressively coming for every dime they can grab at your house and at our small businesses.” It then shifts to a photograph of Moran and urges viewers to “tell Sen. Moran Kansas votes no.”

This asshole Marc Short should call his plutocratic dark money group the Leona Helmsley PAC: “only little people pay taxes.” Or call it the Tax Evaders Are Us PAC, featuring the Trump crime family in ads.

Funding plans that have drawn skepticism from lawmakers in both parties include $100 billion that bipartisan negotiators say would be raised by creating direct-pay municipal bonds to attract more investment to private infrastructure, as well as $20 billion that would come from repurposing broadband funding allocated in previous legislation and $58 billion estimated from nontraditional “dynamic scoring.”

Senate Minority Leader Mitch McConnell (R-Ky.) said Republicans want to see a Congressional Budget Office analysis of the revenue raisers “to see whether the proposal is credibly paid for.”

Republicans never cared about this when giving away $1.9 trillion in tax cuts to corporations and the wealthy with no pay-fors. Because these idiots still believe in the discredited and disproven faith based supply-side “trickle down” economics, or “voodoo economics” as George H.W. Bush once dubbed it.

Progressive activists are criticizing the funding streams in the bipartisan package as “regressive” and largely illusory.

It seems to me like a lot of the so-called pay-fors in the bipartisan plan are fiction. They are certainly not likely to raise the money that they say they will,” said Roger Hickey, co-founder of Campaign for America’s Future, a progressive advocacy group.

“If they do raise the money, they will do it in regressive ways,” he added.

Hickey dismissed an estimate that the bipartisan plan could raise as much as $80 billion by program integrity rules for unemployment assistance programs, arguing that any savings would more likely come from straight cuts to jobless benefits.

“To the extent there are problems with integrity, they’re very hard to get at. They’re unlikely to raise the money that they promised they’re going to raise. It really means cutting those programs,” Hickey said.

All of this sausage making is supposed to conclude with some critical Senate votes by the end of July. With trillions at stake, Democrats hurtle toward key decisions on Biden’s agenda:

Democrats have a chance to pass President Biden’s sweeping infrastructure, tax, climate and social policy measures that would transform American life — but doing so requires them pulling off an incredibly difficult legislative high-wire act over the next few weeks.

The House and Senate are out of session for a holiday break, but discussions are continuing among Democrats about the parameters of potentially monumental legislation that represents Biden’s best chance to deliver on many of his campaign promises, according to interviews with more than a dozen lawmakers, aides and lobbyists.

This legislation, which is set to be passed without Republican support separately from a parallel, bipartisan infrastructure measure, may not be ultimately passed until fall or later [in the House]. But Democrats have only a matter of weeks to settle many of the biggest policy questions surrounding the bill: How much will it spend? How much of that spending should be offset with tax increases and other revenue measures? And which competing items on a laundry list of priorities should ultimately be passed into law?

“This is going to be an incredibly intense period, because we’ve got to come to agreement on the big pieces quickly in order to meet the moment and accomplish our goals,” said Sen. Chris Van Hollen (D-Md.), a Senate Budget Committee member. “And because we have no margin for error in the Senate, that means we’ve got to be burning up the phone lines and coming to some understandings.”

The discussions are taking place independently of the bipartisan talks on the separate bill that would fund “hard” infrastructure — roads, bridges, airports, railroads, pipes, broadband Internet and other bricks-and-mortar spending that some Republicans are willing to support. But it’s all part of the same legislative ballet: While Biden has insisted the two bills are moving on separate tracks, Democratic congressional leaders continue to insist they move in parallel in order to placate liberals concerned that their priorities might be left behind. That, in turn, has vexed many Republicans who think the bipartisan bill will only enable a vast Democratic spending spree.

Now, key Democrats are focused on the second and potentially much larger bill that would include provisions that Republicans are not expected to support — items like climate measures, expansions of health-care coverage, broad new college subsidies and the tax increases necessary to make those measures permanent.

The speed and sensitivity of the negotiations reflect twin concerns: For one, Democrats are operating with some of the thinnest voting margins Capitol Hill has ever seen, with a 50-50 Senate majority secured by Vice President Harris’s tiebreaking vote, and a mere four-seat margin in the House. Passing anything without Republicans will require virtual unanimity [which Democrats currently do not have].

For another, Democrats must work within the esoteric bounds of a 47-year-old federal law that sets out the narrow path a Senate majority must follow to evade the filibuster, the 60-vote supermajority requirement for most legislation. To take advantage of the 51-vote “reconciliation” process, lawmakers first must pass preliminary legislation, called a budget resolution, that sets out the fiscal parameters for the ultimate bill.

With the political clock ticking, Senate Majority Leader Charles E. Schumer (D-N.Y.) has pledged to advance that preliminary resolution by the end of July, in tandem with the bipartisan infrastructure bill now being written based on a framework that key Republicans agreed to last month.

[W]hile not every detail in the final bill must be quickly resolved, a general framework will have to be in place for the budget resolution. The final legislation must comport with “reconciliation instructions” set out in the budget resolution that direct individual congressional committees to write legislation with a defined budgetary impact. Bills that can be ruled out of order in the Senate and lose their eligibility to be passed with 51 votes.

House Budget Committee Chairman John Yarmuth (D-Ky.) told reporters last week that an initial outline could be sketched out even before lawmakers return to Washington from the break. But he said Thursday that major decisions about what ought to be in and what ought to be out had yet to be made.

That game of budgetary Tetris has been made even more difficult, he said, by the fact that congressional fiscal estimators had not yet come up with final projections for many of the key revenues and expenditures that are in play.

“We don’t know what anything costs,” Yarmuth said Wednesday.

Yarmuth’s counterpart across the Capitol, Senate Budget Committee Chairman Bernie Sanders (I-Vt.), circulated a draft budget framework last month that envisioned as much as $6 trillion in spending [not happening], going beyond Biden’s proposals — including a landmark expansion of Medicare that would lower the eligibility age from 65 to 60 and include dental, hearing and vision coverage for the first time.

The framework also included controversial provisions to slash prescription drug prices and to overhaul the immigration system — both of which could produce budget savings that could offset new expenditures. Other major initiatives that remain under discussion include a variety of climate-related provisions as well as at least partially restoring the federal income tax deduction for state and local taxes that was curtailed in the 2017 GOP tax law. And it remains unresolved what level of appetite congressional Senate Democrats will have for raising taxes on corporations and wealthy Americans — which Biden is relying on to fund his agenda.

The tax questions, for instance, are crucial, because the reconciliation rules do not allow a bill to incur a deficit beyond the 10th year. That means making social programs permanent — such as the new monthly child tax rebate checks — will require sufficient new revenue to perpetually offset their costs.

The need to quickly balance all of those concerns, according to those familiar with the process, means that the debate is almost certain to sidestep many of the hallmarks of the legislative process. For instance, while the House and Senate budget committees typically produce their own budget resolutions, that is unlikely to happen this year.

Instead, according to lawmakers and aides, the budget resolution is more likely to be the product of backroom bargaining overseen by Schumer and House Speaker Nancy Pelosi (D-Calif.), in consultation with Sanders and Yarmuth, before being sent directly to the Senate floor. There it will be subject to a grueling amendment process [Vote-a-Rama] before it is sent to the House for final approval.

[S]etting the fiscal parameters for a reconciliation bill can require bridging vast ideological divides, even within the same party.

[D]emocrats have an even tighter majority and a bigger gap between the stated views of their most liberal and most conservative members. Sanders and allies on the left have proposed $6 trillion in spending, while centrists have called for a bill that spends $2 trillion or less — with most or all of it offset with new revenue or savings.

In a demonstration of the leverage even one lawmaker can have, passage of the first reconciliation bill signed by Biden — the $2 trillion American Rescue Plan — was held up for hours in the Senate in March as Sen. Joe Manchin III (D-W.Va.) pushed to scale back an extension of federal unemployment benefits.

Manchin is among those who have made clear that they intend to serve as a check on the left’s ambitions — suggesting, for instance, that he wants to see every expenditure in the plan offset while also expressing skepticism about some of Biden’s proposed tax increases.

Numerous other Democrats, meanwhile, have made a push — publicly and privately — that some level of further deficit spending is appropriate — particularly when it comes to building physical assets.

“The caucus is going to have to decide, what does the country need?” said Van Hollen, who is among those arguing for targeted borrowing. “And there are lots of urgent demands out there.”

While Hoagland and some Republicans think that Democrats will have a hard time forging unanimity on such a vast piece of legislation, others said that they have a compelling interest in not squandering the present alignment of circumstances.

“You have a president who has lifted up this agenda, you have the aftermath and the ongoing effects of the pandemic that have really highlighted and crystallized a lot of the problems that need to be addressed, and you have a narrow majority for the president’s party,” said Joel Friedman, a vice president at the Center on Budget and Policy Priorities and a former congressional and White House budget official. “That is creating this sort of opportunity that I think members want to seize.”

Carpe Diem. Remember that Senate Majority Leader Chuck Schumer told you that “failure is not an option.”