January 27, 2022

Biden says he has reached infrastructure deal with bipartisan US senators, United States News & Top Stories

WASHINGTON (BLOOMBERG) – President Joe Biden said he has reached a tentative deal with a group of Democratic and Republican senators on a bipartisan, US$559 billion (S$750 billion) infrastructure plan that would fulfil one of his top priorities.

“We have a deal,” Biden told reporters after the senators presented their agreement to him at the White House.

But he said the Bill would move alongside separate legislation that would spend hundreds of billions more on what he called “human infrastructure” that the GOP opposes.

“There is going to be a two-track system,” he said.

Earlier, House Speaker Nancy Pelosi said her chamber would not consider the bipartisan deal without the accompanying legislation, which Democrats will attempt to pass through the Senate using the so-called budget reconciliation procedure that prevents a Republican filibuster.

Senate Majority Leader Chuck Schumer said he and House Speaker Nancy Pelosi had agreed to try to hold votes on a bipartisan infrastructure package and a budget resolution setting up fast-track legislation with the rest of Biden’s US$4 trillion economic plan in July.

The 10-member bipartisan group announced agreement on a framework for an infrastructure plan late on Wednesday following days of negotiations with key administration aides.

“We didn’t agree on everything,” Republican Senator Rob Portman said, adding that the group also would begin reaching out to other lawmakers to build support.

The meeting with Biden marks a significant step forward in the effort to put together a package of infrastructure spending that can draw enough votes from both parties to get through Congress.

In addition to receiving Biden’s backing, the senators must get congressional leaders of both parties on board to assure support in the evenly divided Senate, where 60 votes will be needed to get the legislation passed under regular order.

Success also will hinge on whether Biden can assure progressive Democrats in the House and Senate. They have criticised the bipartisan proposal as too small to meet the nation’s needs and they want a guarantee that their priorities are met in a separate, more expansive package that would use the fast-track procedure known as reconciliation to clear the Senate without needing GOP votes.

The White House argues that a bipartisan plan unlocks moderate Democratic support for more social spending in a later Bill.

“We don’t have a lot of faith in, ‘I promise I’ll do this’,” Representative Pramila Jayapal, head of the Congressional Progressive Caucus, said on Wednesday.

One of the key moderate Democrats, West Virginia Senator Joe Manchin, urged progressives to support the deal.

“I would say please don’t let the perfect be the enemy of the good,” he told reporters Thursday.

However, he said he won’t support a reconciliation package until he sees the details. Manchin called a US$6 trillion plan floated by Senate Budget chairman Bernie Sanders as too expensive.

Previous attempts to negotiate an agreement with Republicans led by West Virginia Senator Shelley Moore Capito collapsed after Biden rejected their proposal as inadequate. The bipartisan group, a core of five Democratic and five GOP senators, then began working on their own approach.

The Senate group was striving to reach an agreement before the chamber leaves Washington for a two-week break that begins on Friday.

The senators did not provide details on their framework. The amount of new spending in the plan decreased to US$559 billion from US$579 billion by re-purposing US$20 billion in previously appropriated broadband funds to count as part of some US$65 billion in broadband funding that was part of their original framework, according to a person familiar with the matter.

Republicans in the group dropped their proposal for tying the national gasoline tax to inflation and putting a fee on electric vehicles, which the administration opposed. They had been haggling over how much revenue could be raised to offset spending through stricter enforcement of tax law.

The group proposed US$40 billion in Internal Revenue Service (IRS) funding, to yield US$103 billion in extra revenue. The White House has claimed that an US$80 billion investment and changes to IRS access to bank account flow data could yield US$700 billion.

“I would call this a much sturdier framework that obviously we wouldn’t be going to the White House if it didn’t have broad based support,” said Senator Mark Warner, a Virginia Democrat and a member of the group.

“I feel even more optimistic than last night,” Warner said on Thursday, adding that more details about how to pay for the plan have been ironed out.

‘We can’t pass one without the other’

Moving Biden’s agenda on dual tracks was the subject of a separate meeting on Wednesday night that Schumer and Pelosi had with Steven Ricchetti and other top aides to Biden. Progressives in the House have warned they won’t back a bipartisan infrastructure plan until the rest of Biden’s agenda is ready for a vote.

“We need both. We can’t pass one without the other,” Schumer said of the infrastructure legislation and the reconciliation package.

He said Congress would vote on the budget resolution setting up the fast-track process in July, while leaving the subsequent reconciliation legislation enacting the Biden agenda for later.

The House will vote on parts of an infrastructure package next week, and lawmakers have talked of going into House-Senate conference talks to forge a final Bill if the Senate passes the emerging bipartisan deal.

It is not yet clear if Democrats will try to use either the infrastructure Bill or subsequent reconciliation Bill to raise the nation’s debt ceiling. The debt ceiling comes back into effect on Aug 1, but the Treasury can likely delay a payments default into the autumn.

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