Cracks Already Forming in Biden’s Big Infrastructure Deal

By Yuval Rosenberg

Cracks Already Forming in Biden’s Big Infrastructure Deal

Well, that didn’t take long.

Less than 24 hours after President Joe Biden stood on the White
House driveway with a bipartisan group of senators and announced a
roughly $1 trillion agreement on an infrastructure package, the
deal is teetering amid accusations of treachery and foul play.

At issue is Biden’s statement that he won’t sign an
infrastructure bill unless it is accompanied by a separate, larger
reconciliation package that provides more of the things that he has
called for, including substantial federal investments in green
energy and “human infrastructure” such as elder and child care.

“Extortion!” Some Republicans said the explicit link
between the two infrastructure packages violates the spirit of the
bipartisan agreement. “If reports are accurate that President Biden
is refusing to sign a bipartisan deal unless reconciliation is also
passed, that would be the ultimate deal breaker for me,” Sen
Lindsey Graham (R-SC)
tweeted.

In an interview with
Politico, Graham, who was one of 11 Republicans
who supported the agreement, was a bit more heated: “If he’s gonna
tie them together, he can forget it!” he said. “I’m not doing that.
That’s extortion! I’m not going to do that. The Dems are being told
you can’t get your bipartisan work product passed unless you sign
on to what the left wants, and I’m not playing that game.”

Other Republican senators expressing concerns include key
moderates Mitt Romney (UT), Susan Collins (ME) and Rob Portman
(OH), with the latter reportedly feeling “pissed and disappointed”
by Biden’s approach. Sen. Bill Cassidy (LA) said he felt
“blindsided,” while Sen. Jerry Moran (KA) is reportedly seeking
reassurances from Democratic Sens. Joe Manchin (WV) and Kyrsten
Sinema (AZ) that they did not support Biden’s plan.

Senate Minority Leader Mitch McConnell (R-KY) also weighed in,
accusing Biden of “caving” to progressive Democrats. And House
Minority Leader Kevin McCarthy (R-C) said he didn’t think Biden’s
plan would work. “I don't think that's going to pass,” he said. “I
think they killed any opportunity.”

White House pushes back: Press Secretary Jen Psaki told
reporters that Republican complaints were “absurd.”

“I think the American people are quite focused on how we’re
getting work done on their behalf, less focused on the mechanics of
the process,” Psaki
said. “Now it is up to Republicans … to decide if
they are going to vote against a historic investment in
infrastructure that’s going to rebuild roads and railways and
bridges in their communities, simply because they don’t like the
mechanics of the process.”

Still, not all Democrats are on board with Biden’s approach.
Rep. Kurt Schrader (D-OR), a member of the Blue Dog Coalition, told
Roll Call that he plans to vote against a reconciliation package
due to concerns about its expected size and increase in deficit
spending. And Rep. Dean Phillips (D-MN) said that he does not
support linking the bipartisan agreement and the reconciliation
package. “I think this is important that we demonstrate that this
place can operate,” he
told CNN. “And if we end up getting nothing done
because of the objections of either the left or the right, and then
shame on all of us.”

Trying to have it both ways? The rapid deterioration of
the bipartisan agreement highlights tensions in Biden’s approach to
governance,
says Jim Tankersley of The New York Times.
“President Biden’s bipartisan infrastructure agreement contains all
of the contradictions and promises of the Biden brand,” he
writes.

On the one hand, Biden wants to achieve a bipartisan agreement,
but as Republican complaints Friday indicate, that won’t be easy
and may in fact be impossible in the current political environment.
On the other hand, Biden wants to transform that government along
the lines of Presidents Franklin Delano Roosevelt or Lyndon Baines
Johnson but lacks the overwhelming majorities in Congress to make
that happen.

One possible outcome, Tankersley says, is a loss on both counts
as Republicans abandon the plan and take enough centrist Democrats
with them to scuttle a reconciliation package. At the same time,
the Republican rejection of the bipartisan plan could backfire on
the GOP, giving Biden the cover and support he needs to put his
more ambitious plans into play.

“Mr. Biden has now achieved the appearance of bipartisanship,
whether it ultimately endures or not,” Tankersley writes. “And that
appearance, by itself, could give him the political fuel he needs
to push a far more aggressive plan into law.”

What comes next: Although Republicans who negotiated the
bipartisan are reportedly meeting Friday to discuss withdrawing
their support, lawmakers are still expected to push ahead on
Democrat’s two-track approach. Politico broke the timeline down as
follows:

1. The Senate writes a bipartisan infrastructure bill before the
August recess, with the House following up with a similar bill.

2. Both the House and the Senate pass budget resolutions before
the August recess, unlocking the reconciliation process.

3. The budget resolution contains instructions that allow
Democrats to write a reconciliation bill during the recess that
contains everything left out of the bipartisan infrastructure
bill.

4. In September, lawmakers vote on both bills, with the goals of
getting them to the White House before the end of the month.

The plan has plenty of weak points, including the potential
collapse of bipartisanship, Democrats’ miniscule majority and the
issue of offsetting all the new spending in the bills.

If Republicans withdraw their support, Democrats say they
will attempt to pass everything in a single reconciliation bill,
which could come with a $4 trillion price tag (with Sen. Bernie
Sanders (I-VT) pushing for $6 trillion) over eight years. And if
Democrats do move ahead with a massive reconciliation package,
expect to see plenty of fireworks over its size and scope this
fall, with centrist lawmakers like Manchin and Sinema playing a key
role in the debate and the outcome.

IRS Adding Thousands of Auditors

The Internal Revenue Service is already staffing up,
hiring thousands of new auditors in preparation for a
tax-enforcement push that’s a key financing element of President
Biden’s infrastructure plan.

IRS officials said at a tax conference Friday that they
are adding about 2,000 new employees, including 1,300 auditors, to
the agency’s small business division and more than 500 workers to
the criminal investigations divisions, Bloomberg’s Laura Davison
and Genevieve Douglas
report.

“The figures represent a significant hiring increase from recent
years, when the agency has struggled to replace auditors who
retired or left the federal government,” they write. “The
additional staff could put the IRS in position to greatly expand
audit capacity quickly if Congress is able to pass a bipartisan
infrastructure investment plan, which includes $40 billion for the
agency over a decade and is expected to generate $100 billion in
net new tax revenue.”

Even without the infrastructure package, the IRS appears to be
poised for a funding boost, as 2022 spending plans being considered
by Congress call for a $1.7 billion budget increase to $13.6
billion.

House Panels Launch Investigation Into Controversial
Alzheimer’s Drug Pricing and Approval

Two House committees announced Friday that they are launching an
investigation into the controversial approval and pricing of
Biogen’s new $56,000-a-year Alzheimer’s drug.

“We have serious concerns about the steep price of
Biogen’s new Alzheimer’s drug Aduhelm and the process that led to
its approval despite questions about the drug’s clinical benefit,”
Reps. Frank Pallone, Jr. (D-NJ) and Carolyn Maloney (D-NY) said in
a
statement. Pallone chairs the Energy and Commerce
Committee while Maloney leads the Oversight and Reform
Committee.

The Food and Drug Administration’s approval of the drug earlier
this month, despite a lack of evidence that Aduhelm slows the
progression of dementia, raised a storm of controversy, as did the
drug’s pricing, which could lead to
billions of dollars a year in additional costs for
Medicare. The
Kaiser Family Foundation estimates that if 1
million Medicare beneficiaries take the drug, the cost to Medicare
could be higher than $57 billion a year, or some $20 billion more
than Medicare spent on all physician-administered drugs in
2019.

“Our Committees will be investigating this matter so Congress
and the American people can better understand why this drug was
approved, how Biogen set its price and what impact this will have
on research for future Alzheimer’s treatments and federal health
care programs,” Pallone and Malone said.

Number of the Day: 9 Million

At least 9 million Americans who lost their jobs
since the start of the Covid-19 pandemic didn’t receive any
unemployment benefits, according to an estimate by
Bloomberg Businessweek based on more than a year’s
worth of Labor Department data. “That’s a hole in the safety net as
big as the population of Virginia,” Bloomberg’s Shawn Donnan and
Reade Pickert write.

Millions of workers were denied payments by their state systems,
and the emergency federal programs, while generous, did not reach
everyone. Much depends on the states themselves. While California
paid more than 70% of the unemployment claims during the crisis,
Montana paid just 11%.

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