Pelosi Faces Liberal Revolt on Infrastructure Plan
House progressives are warning that they’re prepared to defy
Speaker Nancy Pelosi and oppose a $1 trillion bipartisan
infrastructure bill if she brings it up for a vote on Thursday.
The renewed threat of revolt comes after Pelosi (D-CA) reversed
herself on Monday, reportedly telling members of her caucus that
they could no longer wait for Democrats’ multitrillion-dollar
budget reconciliation package of social spending and tax hikes
before passing the infrastructure bill.
Pelosi had long insisted that the two pieces of legislation were
tied together. “There ain't gonna be no bipartisan bill unless
we're going to have a reconciliation bill," she
said way back in June. But she also promised
renegade centrists last month that she would bring the
infrastructure bill up for a standalone vote this week.
With the self-imposed deadline looming and little progress
toward resolving intraparty differences on the reconciliation
package, Pelosi reportedly told her members Monday evening that she
would push ahead with the infrastructure vote since it has become
clear that negotiations between the White House, House and Senate
on the second bill need more time.
“It all changed, so our approach had to change," Pelosi told her
members Monday, according to
Politico. She reportedly added that her shift was
made necessary once it became apparent that the proposed $3.5
trillion reconciliation package would have to be pared back, and
said that President Joe Biden and Senate Majority Leader Chuck
Schumer are still pressing centrist Sens. Joe Manchin (D-WV) and
Kyrsten Sinema (D-AZ) to spell out what spending level they’d
accept. "We are not going to pass a bill that won’t pass the
Senate. And that's why we have to come up with a number," Pelosi
reportedly told her caucus. "But we're not there yet.”
Pelosi’s delinking the two bills poses a challenge to House
progressives — and calls into question the long-term prospects of
passing a reconciliation package. “Pelosi is basically asking
progressives to trust her that Manchin and Sinema will agree
to a package that the broader Democratic Party will back,” says
Punchbowl News. That’s an awfully big ask. The
only insurance policy progressives have is the infrastructure bill.
Why would they give that up at this point -- especially when they
have no true deadline.”
It’s no surprise then that progressives insist they won’t fold.
Rep. Pramila Jayapal (D-WA), chair of the Congressional Progressive
Caucus, indicated after a meeting with her members Tuesday that a
majority of her 96 lawmakers are ready to vote against the
infrastructure bill without a firm commitment on the social safety
net package.
In a statement that seemed designed to ensure that progressives
aren’t portrayed as radical obstructionists, Jayapal emphasized the
popularity of items in the larger bill. “This agenda is not some
fringe wish list: it is the president’s agenda, the Democratic
agenda, and what we all promised voters when they delivered us the
House, Senate, and White House. It is supported by nearly every
Democrat in Congress and is overwhelmingly
backed by the American people,” Jayapal said.
“Progressives will vote for both bills, but a majority of our
members will only vote for the infrastructure bill after the
president’s visionary Build Back Better Act passes.”
Rep. Jan Schakowsky (D-IL), a Pelosi ally, told
The Hill Tuesday that if the infrastructure bill
is called to a vote, it will fail. And Senate Budget Committee
Chair Bernie Sanders (I-VT) warned in a statement that delinking
the two pieces of legislation could lead to the reconciliation
package being scuttles. “If the bipartisan infrastructure bill is
passed on its own on Thursday, this will be in violation of an
agreement that was reached within the Democratic Caucus in
Congress,” he said. “More importantly, it will end all leverage
that we have to pass a major reconciliation bill.”
‘Captive’ to Manchin and Sinema: Biden met at the White
House Tuesday with two Senate holdouts, Sens. Joe Manchin (D-WV)
and Kyrsten Sinema (D-AZ). The White House and fellow
Democrats have been pressing both senators to clarify their
demands, and House Majority Leader Steny Hoyer reportedly said
Tuesday that an agreement with Manchin and Sinema would be
“critical” for Democrats to be able to move forward.
“The infighting and uncertainty have highlighted the fact that,
for all the small signs of progress that have emerged in recent
days, Democrats pushing Biden’s agenda remain captive to Manchin
and Sinema, the two centrists who oppose the president’s favored
$3.5 trillion social benefits plan, but have also refused to reveal
what level of new spending they’ll support,” The Hill’s Mike
Lillies and Scott Wong write.
That continued Tuesday, as the potentially pivotal talks with
Biden apparently
failed to produce any immediate breakthrough.
Pelosi’s options: Biden and Democratic leaders have two
days to try to solidify a framework for their budget reconciliation
bill in hopes that they can reassure progressives that the package
isn’t doomed. If enough progressives can be convinced to support
the infrastructure bill, it can still pass on Thursday. If not,
progressives have the numbers to block it. Pelosi could also decide
to postpone the infrastructure vote.
“All of these options present risks to Democrats because one
faction could be so alienated and angered that it makes it
difficult for Pelosi to manage her caucus going forward,” Brian
Gardner, chief Washington policy strategist at investment bank
Stifel, wrote in a note to clients Tuesday.
Given those scenarios, Gardner suggested that a delay pushing
both pieces of legislation into October or even November is the
most likely outcome.
Yellen Warns Congress Debt Limit Deadline Is October 18
Treasury Secretary Janet Yellen on Tuesday again warned
Congress about the dangers of not promptly raising the federal debt
limit and said that, without action on their part, the U.S. could
be forced to default on at least some of its obligations within a
few weeks.
In a letter
to congressional leaders, Yellen said that the latest
projections show that Treasury will exhaust its options for making
all of its scheduled payments on October 18. “At that point, we
expect Treasury would be left with very limited resources that
would be depleted quickly,” Yellen wrote. “It is uncertain whether
we could continue to meet all the nation’s commitments after that
date.”
Speaking at a Senate Banking Committee hearing, Yellen
discussed what could happen if lawmakers fail to act, forcing the
U.S. into default. “It would be disastrous for the American
economy, for global financial markets, and for millions of families
and workers whose financial security would be jeopardized by
delayed payments,” Yellen said.
“It is imperative that Congress swiftly addresses the debt
limit,” she added. “If it does not, America would default for the
first time in history. The full faith and credit of the United
States would be impaired, and our country would likely face a
financial crisis and economic recession.”
Interest rates would almost certainly move higher if the
U.S. defaults, Yellen said, which would raise the cost of servicing
the country’s debt, among other deleterious effects. “Absolutely,
it’s true that the interest payments on the government debt would
increase,” Yellen told lawmakers.
The Treasury chief also pleaded with lawmakers to come
together to address the issue, just hours after Republicans in the
Senate blocked a bill that would have suspended the debt ceiling.
“It is very important to recognize that raising the debt ceiling is
about paying bills that Congress has incurred in the past,” Yellen
said, noting that both Democratic and Republican administrations
had added to the debt. “It’s a shared
responsibility.”
Tense weeks ahead: Although the
chances of a government shutdown at the end of the week appear to
be diminishing as the path to a short-term funding deal comes into
view, the path toward defusing a debt ceiling standoff remains less
clear. Stifel’s Gardner said he continues to believe that Congress
will find a way to raise the debt ceiling before it’s too late, if
only because it’s so obvious that it’s essential that they do so.
But until lawmakers figure out how to get it done, “it could be a
tense few weeks in Washington.”
What Could Happen if the US Defaults
Economists have been pretty consistent in their warnings
about the possible negative outcomes of a debt default, with
potential effects including a spike in unemployment, higher costs
throughout the economy and even a severe recession, depending on
how long the crisis lasts.
Paul N. Van de Water of the left-leaning Center on Budget
and Policy Priorities, an economist who worked for nearly two
decades at the Congressional Budget Office,
provided more details this week on what
could happen to specific programs once the Treasury starts delaying
or skipping payments. Some examples:
- Social Security payments could be delayed, affecting up
to 65 million people. - 6 million veterans and surviving family members of
veterans could see delays in pensions. - Food assistance could be delayed for 22 million
people. - Pay for 1.4 million members of the military could be
delayed. - Pay for 3 million federal civilian employees could be
delayed – “for weeks and months, not just a few days,” Van de Water
says. - Funds for Medicaid and the Children’s Health Insurance
Program could stop flowing – in the middle of a pandemic –
potentially affecting 82 million people. - Health care providers may not get paid promptly by
Medicare. - Evictions could spike as housing assistance payments are
delayed for millions of families.
Democratic Bill Would Raise Taxes on High-Income Households,
Lower Taxes for Most Others: Analysis
The tax provisions in the Democratic reconciliation bill
currently under consideration in the House would cut taxes on
average for households making less than $200,000, according to a
new analysis from the Tax Policy Center.
Households earning $1 million and up, on the other hand,
would face tax increases.
“Including all provisions, the measure would raise taxes
for the top 1 percent (those making $885,000 or more) by about
$160,000,” TPC’s
Howard Gleckman writes. “The top 0.1 percent (who
make at least $4 million) would pay $1.1 million more in federal
taxes.”