McConnell Issues New Demand on Infrastructure Deal

By Yuval Rosenberg

Biden Backpedals to Save Infrastructure Deal, but McConnell
Could Still Blow It Up

President Joe Biden tackled his own infrastructure repair
job over the weekend.

Biden had thrown the fate of his bipartisan infrastructure
deal into doubt shortly after announcing it last Thursday by saying
that the nearly $1 trillion package had to arrive on his desk “in
tandem” with a larger bill focused on “human infrastructure” that
Democrats plan to advance on a partisan basis.

“If this is the only thing that comes to me, I'm not
signing it,” Biden said about the bipartisan deal. “I'm not just
signing the bipartisan bill and forgetting about
the rest.”

That comment appeared to be part of a Democratic
leadership strategy to assuage the concerns of progressives, who
want assurances that their priorities — climate change, health
care, caregivers — won’t be cast aside. But it rankled a number
Republicans, who warned that they might withdraw their support for
the hard-fought bipartisan agreement.

In a lengthy
statement issued Saturday, Biden backtracked in an
effort to salvage the bipartisan deal, clarifying that his comments
were not meant as a veto threat and he would support the bipartisan
plan “without reservation or hesitation” — but still intended to
pursue passage of the rest of his agenda as laid out in his
American Families Plan.

Biden said his comments “created the impression that I was
issuing a veto threat on the very plan I had just agreed to, which
was certainly not my intent. So to be clear: our bipartisan
agreement does not preclude Republicans from attempting to defeat
my Families Plan; likewise, they should have no objections to my
devoted efforts to pass that Families Plan and other proposals in
tandem. We will let the American people—and the
Congress—decide.”

Republicans involved in the infrastructure negotiations said
Sunday that Biden’s statement had eased their concerns. “I do trust
the president,” Sen. Mitt Romney (UT) said on CNN’s “State of the
Union.” “And he made very clear in the much larger statement that
came out over the weekend, carefully crafted and thought through
piece by piece, that, if the infrastructure bill reaches his desk,
and it comes alone, he will sign it.”

Sen Rob Portman similarly told ABC’s “This Week” that he was
glad Biden had “delinked” the two bills.

Pressure from McConnell: Senate Minority Leader Mitch
McConnell, who hasn’t publicly backed the bipartisan deal, sounded
less upbeat. On Monday, he welcomed Biden’s statement but called on
the president to press House Speaker Nancy Pelosi (D-CA) and Senate
Majority Leader Chuck Schumer (D-NY) to separate the two bills.
Pelosi has said that the House will not take up the bipartisan deal
until the Senate passes the Democratic package.

“The president has appropriately delinked a potential bipartisan
infrastructure bill from the massive, unrelated tax-and-spend plans
that Democrats want to pursue on a partisan basis,” McConnell said.
“Now I am calling on President Biden to engage Leader Schumer and
Speaker Pelosi and make sure they follow his lead.”

McConnell said that Biden’s statement “would be a hollow
gesture” without a similar commitment from Pelosi and Schumer to
the bipartisan deal. “The president cannot let congressional
Democrats hold a bipartisan bill hostage over a separate and
partisan process,” he said.

Pelosi won’t allow one bill without the other, analyst Chris
Krueger of the Cowen Washington Research Group told clients in a
note Monday, “so Biden can play the bipartisan hero as Pelosi plays
the partisan heel.”

That setup at least raises the prospect that McConnell could
still seek to scuttle the bipartisan deal and pressure moderates to
withdraw their support if he opposes the Democrats’ approach.

Would Biden or wouldn’t he? At the same time, the White
House has refused to explicitly say that Biden would sign the
bipartisan bill if it landed on his desk alone. “The president
looks forward to and expects to sign each piece of legislation into
law and he’s going to work his heart out getting both of them
across the finish line,” White House Press Secretary Jen Psaki said
Monday in response to a question about whether Biden would sign
just the bipartisan bill. Psaki said that it’s up to congressional
leaders to determine how they’ll proceed on the two bills.

The abstruseness is clearly intentional. “The ambiguity helps
the White House on two fronts,” The Washington Post’s Olivier Knox

explains. “First, it keeps progressives on board
by promising them Biden will fight for a Democrats-only
infrastructure plan. … Second, it diminishes the impression GOP
senators are going along with a process designed to get the broader
package over the finish line, which might make an otherwise broadly
popular spending item intolerable to the Republican base.”

What’s next: Negotiators and staffers will be drafting
the actual legislation for the bipartisan deal while lawmakers are
on their two week July 4 recess. Democrats, meanwhile, will also be
debating the appropriate size of their reconciliation package, with
Sen. Joe Manchin (D-WV) saying he could back as much as $2 trillion
while Sen. Bernie Sanders (I-VT), chair of the Senate Budget
Committee, has proposed as much as $6 trillion.

The bottom line: Biden appears to have salvaged the
bipartisan deal, but the hubbub created by his unforced error last
week shows just how fine a balance he’ll be trying to achieve to
get either or both infrastructure packages passed.

“In that sense, it’s fellow Democrats that Biden now has to turn
his attention to,”
writes The Washington Post’s Peter W. Stevenson.
“He needs to come up with the framework of a Democrats-only bill
that placates liberals, and delivers on big campaign promises,
while not being too loud about it, at the risk of upsetting or
embarrassing the moderate Republicans he needs to keep onboard for
the first bill to pass.

Democrats Prepare for Tricky Budget Battle

As Democrats walk a political tightrope to pass the
infrastructure package they want, the first step in what‘s likely
to be a long and difficult process involves agreeing on a budget
framework.

Writing a budget blueprint, which will unlock the reconciliation
process and open the door to passing a potentially massive spending
bill, will be particularly challenging given Democrats’ slim
majority in the House, with Pelosi feeling pressure from both
progressives and centrists over the size of the bill.

Progressives are already pushing to include more spending on
their priorities, which they say are health care, housing, climate
change, child care and immigration. “It’s essential, what we have
talked about with the Speaker and within the caucus — the budget
resolution has to be crafted in a way that it takes into
consideration all of our five priorities,” Congressional
Progressive Caucus leader Rep. Pramila Jayapal (D-WA) told
Politico.

Sen. Bernie Sanders (I-VT) has cited a $6 trillion figure for
the spending plan, though Democratic leaders say they think it will
come in well below that amount. But progressives in the House say
that $6 trillion is closer to a floor than a ceiling.

“I think the $6 trillion number that Sen. Sanders spoke of is a
fine one,” said Rep. Alexandria Ocasio-Cortez (D-NY). “I believe
with this moment that we have on climate, if you ask me, I think
this should be a $10 trillion package or at least part of a larger
$10 trillion climate strategy.”

Centrists are expressing concerns about spending too much, with
some saying that they could not support a spending package over $4
trillion. Joe Manchin (D-WV), a key centrist in the Senate, says
that he won’t go even that high. “If they think in reconciliation
I’m going to throw caution to the wind and go to $5 trillion or $6
trillion when we can only afford $1 trillion or $1.5 trillion or
maybe $2 trillion and what we can pay for, then I can’t be there,”
he
said on ABC’s “This Week” Sunday.

House Budget Committee Chair John Yarmuth (D-KY) told
Politico that Democrats must achieve near-total unity in order to
move ahead. “In this case, unity is our only chance.”

Chart of the Day: Pandemic Prosperity

Fueled by soaring values in real estate and the stock
market, the majority of American households saw their wealth
increase during the pandemic, The Wall Street Journal
reports.

This extraordinary turn of events, in which a recession resulted
in greater wealth, owes much to the federal government’s fiscal
response to the crisis. The outlay of trillions of deficit-financed
dollars boosted assets of all kinds, with stocks claiming about
half of the overall increase. But with stock ownership heavily
concentrated among the wealthiest, the increase in household wealth
during the pandemic year 2020 flowed largely to the better off.
“More than 70% of the increase in household wealth went to the top
20% of income earners,” the Journal says. “About a third went to
the top 1%.”

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