Deal! Biden Agrees to Bipartisan Infrastructure Package

Deal! Biden Agrees to Bipartisan Infrastructure Package

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Plus, why the deal still has a long way to go
Thursday, June 24, 2021

'We Have a Deal': Biden, Senators Agree on Infrastructure Plan

President Joe Biden and a bipartisan group of 10 centrist senators announced Thursday that they had reached an agreement on a long-sought package to invest hundreds of billions of dollars in the nation’s transportation, water and broadband infrastructure.

“We have a deal,” Biden told reporters at the White House after meeting with the senators midday. “We’ve all agreed that none of us got what we all would have wanted. I clearly didn’t get all I wanted. They gave more than I think they were maybe inclined to give in the first place.”

The agreement calls for $973 billion in spending over five years, or $1.2 trillion if extended to eight years, according to the White House. That includes $579 billion in new spending, with $312 billion for transportation projects, $55 billion for water infrastructure and $65 billion for broadband (see more details below).

“Today is a huge day for one half of my economic agenda, the American Jobs Plan,” Biden later said, adding that the agreement would provide two-thirds of the physical infrastructure spending he called for in his proposal.

Democrats want a two-part package: Biden and Democratic congressional leaders insisted that the bipartisan deal on physical infrastructure would only be enacted alongside a broader spending package focused on child care, elder care and education, areas the administration has termed “human infrastructure.” Democrats are preparing to push through those parts of the president’s agenda via a process called budget reconciliation, which would allow them to bypass the need for Republican support.

“For me, investment in our physical and human infrastructure are inextricably intertwined,” Biden said. He added that he will not sign the bipartisan deal without the broader bill. “If this is the only thing that comes to me, I’m not signing it. It’s in tandem,” he said. “I’m not just signing the bipartisan bill and forgetting about the rest that I proposed.”

Similarly, House Speaker Nancy Pelosi said that the House would not take up the bipartisan deal until the Senate approves the reconciliation package. “I said there won’t be an infrastructure bill unless we have a reconciliation bill, plain and simple,” Pelosi said.

The reconciliation package would require the support of all 50 Senate Democrats. Sen. Joe Manchin said Thursday he was open to helping craft the bill but would not commit to supporting it before seeing the details. He said he is concerned about the potential costs and how they would be paid for or whether they would add to the national debt. “We have to see what’s in the other plan before I can say, ‘Oh yes, you vote for this, I’ll vote for that,” Sen. Joe Manchin (D-WV), told reporters. “That’s not what I have signed up for.”

A long road ahead: “There’s plenty of work ahead to bring this home,” Biden acknowledged Thursday.

The bipartisan deal will need the support of at least 60 senators, and Democrats’ two-track strategy faces challenges in both the Senate and the House, where Pelosi leads a narrow and divided majority.

The Senate deal already faces pushback from some on the left who say it is too small and excludes key priorities on social programs, health care and climate change. The bipartisan deal includes $73 billion for the electric grid and clean energy, for example, far short of what some on the left say is needed. Sen. Richard Blumenthal (D-CT) called the deal “way too small. Paltry. Pathetic.” He added that he needs “a clear, iron-clad assurance that there will be a really adequate, robust package.”

But Biden threw his full support behind the agreement even as he acknowledged that some members of his own party wouldn’t be satisfied with the details. He’s betting that progressives will back him and his deal. “My party is divided, but my party is also rational,” he said. “If they can’t get every single thing they want but all that they have in the bill before them is good, are they going to vote no? I don’t think so.”

Sen. Bernie Sanders (I-VT), who is developing the reconciliation bill as chair of the Senate Budget Committee, had floated a package of as much as $6 trillion, but said he’s prepared to reduce the size of that bill to avoid overlap with the bipartisan deal and secure the needed Democratic votes. "If the bipartisan bill is passed, we're certainly not going to build the same bridge twice, so we can deduct some of what they have passed from the reconciliation," Sanders told reporters.

Still, the two-track Democratic strategy could also risk losing some votes for the bipartisan deal from Republicans who object to the larger package. Republicans may have other concerns about the agreement, as well, including its reliance on stepped-up enforcement by the Internal Revenue Service, a key element of its proposed financing.

A significance beyond roads, bridges and broadband: Biden campaigned on his ability to bridge partisan divides, and he continued to pursue bipartisan talks despite calls from progressives to press ahead with a larger package relying only on Democratic votes. On Thursday, the president touted the importance of bipartisanship, describing the deal as a key step in a race with China — and a critical signal that democracies can compete with autocratic nations in the 21st century.

“We have to move and we have to move fast. This agreement signals to the world that we can function, deliver and do significant things,” Biden said. “Let me be clear. Neither side got everything they wanted in this deal. That’s what it means to compromise. And it reflects something important — it reflects consensus. The heart of democracy requires consensus.”

What’s in — and What’s Left Out of — the Bipartisan Infrastructure Deal

The bipartisan infrastructure deal would spend $973 billion over five years, or $1.2 trillion if extended to eight years, on a range of programs, from roads and bridges to water and broadband. It calls for $579 billion in new spending, according to a White House fact sheet, including:

* $312 billion for transportation: This includes $109 billion for roads, bridges and major projects; $49 billion for public transit; and $66 billion for passenger and freight rail. It also includes $25 billion for airports, $16 billion for ports and waterways and $7.5 billion for electric vehicle infrastructure.
* $73 billion for power infrastructure and the electric grid;
* $65 billion for broadband infrastructure;
* $55 billion for water infrastructure;
* $47 billion for resiliency.

How to pay for that new spending was a major obstacle to the agreement. Republicans rejected Biden’s calls for higher taxes on the wealthy and corporations, while the White House objected to proposals to index the gas tax to inflation. “We’re going to do it all without raising a cent from earners below $400,000. There’s no gas tax increase, no fee on electric vehicles,” Biden said Thursday.

The White House said proposed funding will include:

* Reducing the IRS tax gap;
* Unemployment insurance program integrity;
* Redirecting unused unemployment insurance relief funds;
* Repurposing unused relief funds from 2020 emergency relief legislation;
* State and local investment in broadband infrastructure;
* Allowing states to sell or purchase unused toll credits for infrastructure;
* Extending expiring customs user fees;
* Reinstating Superfund fees for chemicals;
* Using 5G spectrum auction proceeds;
* Extending mandatory sequester;
* Selling from the strategic petroleum reserve.

“It is unclear whether the final package will ultimately rely on deficit spending,” The Washington Post reports, “and some financial experts are suspicious about whether lawmakers and the White House are serious about ensuring that the infrastructure plan can pay for itself.”

Democrats Eye Two Tracks for Raising Debt Ceiling

With Treasury Secretary Janet Yellen warning lawmakers that the debt ceiling needs to either be raised or have its suspension extended before August 1, Democrats are considering two approaches to the problem, Politico’s Caitlin Emma reports.

In one scenario, Democrats make a deal with at least 10 GOP senators and raise the debt ceiling in a bipartisan piece of legislation. In a second scenario, they avoid the threat of a Republican filibuster by using the reconciliation process to raise the debt ceiling at the same time they pass all or part of President Biden’s multi-trillion infrastructure spending plan.

“Neither option is especially easy or palatable,” Emma says. Republicans are expected to demand reforms including spending reductions as part of any bipartisan agreement, while moderate Democrats may balk at the prospect of raising the debt ceiling on a partisan basis.

One obvious risk is that the debt ceiling could get bogged down with the effort to pass infrastructure legislation. If that process hits a snare, it could increase the risk that Congress fails to address the debt ceiling in time, causing a default on U.S. debt payments — which Yellen warned this week would be “catastrophic.”

Democratic lawmakers say they are aware of the situation and some have downplayed the severity of the risk. Sen. Tim Kaine (D-VA) said that a reconciliation package would likely include revenue increases, making it easier for Democrats to vote to raise the debt ceiling. “For me, it’s not a hard vote to raise the number, which is a meaningless number, if I feel like there’s a debt management strategy that makes sense,” Kaine said.

Still, there is no clear plan right now, and the clock is ticking. “It has to be done,” Senate Budget Committee member Patty Murray (D-WA) told Politico. “I don’t know the path yet. Everybody is aware that it needs to be done. We have to pay our bills.”

Biden Administration to Spend $46 Billion to Avoid Wave of Evictions

The Centers for Disease Control and Prevention announced Thursday that a pandemic-related moratorium on evictions would be extended for another month, with a new end date of July 31. The White House said it will work with state and local governments to distribute $46 billion in rental assistance before the deadline, using funds that were provided in previous Covid relief measures.

See this White House fact sheet for more details on how the money will be spent.

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