Welcome to Hell Week on Capitol Hill.
The next few days are packed with critical deadlines for lawmakers
— and pivotal decision points for Democrats that could determine
the fate of President Joe Biden’s economic agenda, and potentially
his presidency. Oh, and Congress has until Friday to keep the
government from shutting down. Here’s where things
stand.
A Make-or-Break Week for Biden’s Agenda
President Joe Biden and Democratic leaders have three days
and counting to unite their party and ensure that their economic
agenda doesn’t collapse into chaos.
Pelosi sets a deadline: Speaker Nancy Pelosi (D-CA)
announced Sunday night that the House would begin debate on the
Bipartisan Infrastructure Framework passed by the Senate on Monday
on then vote on it Thursday — the same day on which current funding
for surface transportation programs is set to expire.
Pelosi last month promised a group of centrists that she
would bring the infrastructure bill to a vote in the House by
Monday. Her goal in setting the vote for Thursday instead is
reportedly to buy a little more time for Democrats to pull together
their budget reconciliation package focused on health care,
education, paid leave and climate change — or, far more likely, at
least agree on a solid enough framework that will convince
progressives to back off threats to tank the infrastructure
bill.
Dozens of progressives are insisting that they will not
vote for the infrastructure package without the larger budget bill.
“The speaker is an incredibly good vote counter, and she knows
exactly where her caucus stands, and we’ve been really clear on
that,” Rep. Pramila Jayapal (D-WA), chair of the Congressional
Progressive Caucus, told CNN on Sunday. “The votes aren’t there. I
don't think she's going to bring it up.”
Pelosi, though, continued to try to project confidence.
“Let me just say we're going to pass the bill this week," she said
Sunday on ABC's "This Week." She later added, though: "I'm never
bringing a bill to the floor that doesn't have the
votes."
A topline less than $3.5 trillion … but how much less?
To get the votes, Pelosi is rushing to make progress on the
budget bill. The House Budget Committee on Saturday advanced the
$3.5 trillion package, but Democrats still have a long, long way to
go before it can be finalized and brought to a vote. They have yet
to agree on the ultimate size and scope of the legislation and
remain divided on many key details.
Pelosi acknowledged on Sunday that the package will end up
being smaller than the $3.5 trillion maximum they had set. “That
seems self-evident,” the speaker told ABC News. “Adding up what our
priorities are should take us to a number where we find common
ground. Can we shorten the time or some other things to make these
numbers smaller? That's our discussion now, but we're ready for
it.”
Pelosi has also promised her members that the House will
not vote on a budget bill costing more than the Senate version. And
Biden is reportedly prepared to compromise. “The president has made
it clear he is willing to accept less than the $3.5 trillion that
has been the sticker price for his Build Back Better plan, even as
his aides publicly say that the cost will ultimately be nothing
since it will all be paid for,” Politico
reports.
Sticky sticking points: As for the details, The
Wall Street Journal’s Gabriel T. Rubin on Saturday provided a
breakdown of five major areas of disagreement:
health care, long-term home care and child care, climate,
immigration and taxes.
On health care, for example, Democrats are reportedly
wrestling with how best to expand access to care.
Pelosi is pushing to bolster Affordable Care Act subsidy programs
while House Majority Whip Jim Clyburn (D-SC) wants to expand
Medicaid in sates that haven’t done so on their own. Sen. Bernie
Sanders (I-VT), meanwhile, is pressing to add dental, vision and
hearing coverage to Medicare. Democrats are also divided over a
cost-saving proposal to allow Medicare to negotiate drug prices
with pharmaceutical companies.
And on taxes, Democrats remain split over what the
corporate tax rate should be, whether the top individual rate
should be restored to 39.6% and how to address demands from some in
the party to eliminate the $10,000 cap on the deductibility of
state and local taxes, among other issues.
Not exactly stuff that can be hammered out quickly over a
working lunch.
What do Machin and Sinema want? That all means that
Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) remain critical
players in determining whether Democrats can craft a package that
can pass the Senate and what it will ultimately look like.
Biden and congressional Democrats have been pressing to
pin down the two centrists on their demands and red lines. “The
main goal is to get all 50 of us together which means that we
really need to get down to what are the things that will enable Joe
and Kyrsten to say yes,” Sen. Mazie Hirono (D-HI) told The Wall
Street Journal. “I personally am not sure what it is
programmatically that they can support. I’d like to get that
identified.”
Manchin has resisted such pressure and has instead called
for lawmakers to “pause” on the budget package. “What’s the need?
There is no timeline. I want to understand it,” he told
Politico in an interview last week. “Everybody
knows me pretty well. My mind is my mind, not theirs.”
Progressives, meanwhile, say that any framework must
include details on what the centrists will support, including a
consensus topline number and spending figures for key items,
according to a Congressional Progressive Caucus obtained by
Politico. “Without both these pieces, it is simply
impossible for the legislation to move forward, and we cannot come
to an agreement only for it to be undercut after the fact,” the
group said in its memo.
Lawmakers look for more from Biden: As irritated as
some Democrats are with Manchin and Sinema, frustration is also
reportedly growing with Biden. The president and other
administration officials reportedly
worked the phones this weekend to try to drum up
support for the social welfare and climate package. But some
Democrats are saying that the president needs to do more. One
centrist told
Politico that the White House needs to move past
“listening mode” and start banging heads to get the infrastructure
bill passed.
Biden didn’t do that in public remarks on Monday. Instead,
he acknowledged that Democrats may not be able to reach a deal and
pass his economic agenda in the next few days. "It may not be by
the end of the week. I hope it’s by the end of the week," the
president told reporters after getting a Covid-19 vaccine booster
shot on camera. "But as long as we’re still alive, we’ve got three
things to do: The debt ceiling, continuing resolution, and the two
pieces of legislation. If we do that, the country is going to be in
great shape."
The bottom line: House Democrats are
holding a private caucus meeting Monday evening to try to find a
path forward. Pelosi reportedly assured her members that the House
won't pass a bill that won't be able to pass the Senate, but it's
still far from clear what can pass either chamber.
Republicans Block Bill to Prevent Shutdown, Suspend Debt
Limit
Senate Republicans just blocked a bill passed by the House that
would prevent a government shutdown at the end of the month because
it also would have suspended the debt ceiling. Minority Leader
Mitch McConnell of Kentucky, the Republican leading the effort to
sink the bill, continues to insist his party has no responsibility
for dealing with the debt limit, though he admits that a failure to
do so could cause enormous damage to the U.S. economy.
Economists have warned that a U.S. default on its obligations
would be calamitous. “If you actually crossed that line and got to
a place where the government wasn’t paying off its obligations, I
think it would create a very negative dynamic not only in the US
but around the world,” New York Fed chief John Williams said
Monday.
Federal Reserve Governor Lael Brainard encouraged lawmakers to
act. “Congress knows what it needs to do. It’s done it before. It
needs to step up; it has responsibilities,” she said at a meeting
of business economists. “The American people have had enough drama
over the last two years.”
The global consulting firm RMS ran
simulations of what could occur if the U.S.
defaulted, and the results were not pretty. “This would be the
first artificially induced debt ceiling crisis since the 2011
debacle, and has the potential to hurt the real economy, global
financial markets and the credit rating of the United States,” the
RMS analysts wrote. “Even a short-term default crisis carries with
it the probability of a 0.99 percentage point decrease in
fourth-quarter growth this year and up to a 1.76 percentage point
decrease in the annual growth rate next year.”
Democrats on their own: Assuming Republicans cannot be
persuaded to back a debt limit suspension, Democrats are expected
to take steps to avoid default by using the reconciliation process
to increase the debt limit. That process would take time, though
— as long as two weeks, coming perilously close to a
default date that could potentially arrive in mid-October.
Democrats have been slow to move on the reconciliation option.
Though it may be part of a bluffing game, Senate Budget Chair
Bernie Sanders (I-VT) said last week that there is “no backup plan”
for the debt limit.
“It is incomprehensible to me … that you have a Republican Party
that would allow the largest economy to default on our loans and
money that has already been spent, especially spent during the
Trump administration,” Sanders said. “But I don’t think that’s
going to happen,” he added. “I think Republicans may be a little
bit crazy, but they’re not that crazy.”
Shutdown Scramble as Deadline Looms
With government funding set to expire when the fiscal year
ends at midnight Thursday, Democrats are expected to rewrite a
stopgap bill to provide a “clean” continuing resolution that would
prevent a shutdown, as well as provide roughly $20 billion for
hurricane victims and Afghani refugee settlement
expenses.
Republicans said they would back such an approach. “We
will support a clean continuing resolution that will prevent a
government shutdown," Sen. McConnell said.
Still, the deadline is just days away, and some experts
think a brief shutdown over the weekend is not out of the question
given the tight timeframe.