Deal! Biden Agrees to Bipartisan Infrastructure Package

By Yuval Rosenberg

'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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