11.2.2021 Washington Update

Reconciliation & Infrastructure – This week Democrats continue their search for an elusive goal: uniting their respective party factions—with Sen. Joe Manchin (D-WV) on one side, and Rep. Alexandria Ocasio-Cortez (D-NY) on the other—around the “Build Back Better Act” (reconciliation, or “BBB”) and the “Infrastructure Investment and Jobs Act” (infrastructure).

As they search, voters are heading to the polls in New Jersey and Virginia (early voting in both states commenced a few weeks ago), and a Republican victory tomorrow in one, or both, states could cause two divergent reactions.  As Samuel Johnson once said, “Depend upon it, sir, when a man knows he is about to be hanged in a fortnight, it concentrates his mind wonderfully.”  In other words, losing the governor’s races in Virginia and/or New Jersey could provide an external shock to the system, one that unites the party, forces quick compromise, leading to immediate passage of both bills.

Or, quite possibly, losing either or both states could prove cataclysmic, inducing moderates and progressives to retreat to their ideological corners, with moderates demanding an immediate vote on infrastructure, and a pause on reconciliation, while their compatriots argue that the election results argue for boldness, and therefore a return to the $3.5 trillion spend-a-thon.

The third option, of course, is to continue muddling along.  It’s possible the House votes on both bills later this week, but before they do, progressives are demanding Manchin and Sen. Kyrsten Sinema (D-AZ) publicly commit to the Biden framework announced last week.  So far, no such commitment is forthcoming.  Some lawmakers speculated that, last week, as many as 40 House Democrats were prepared to vote against the infrastructure bill absent Manchin and Sinema’s pledges.

Last week, Democratic Whip Dick Durbin (D-IL), when asked whether Senate Democrats unanimously supported the framework, replied, “No, I wish I could say yes, but there’s a great deal of uncertainty within the caucus as to what’s contained in the deal.”

In a tweet, Sinema confirmed Durbin’s lament, as she would only convey platitudes about the process.  “After months of productive, good-faith negotiations with @POTUS and the White House,” she wrote, “we have made significant progress on the proposed budget reconciliation package. I look forward to getting this done, expanding economic opportunities, and helping everyday families get ahead.”

Today, Manchin was more definitive, but in the wrong direction.  He urged Democrats to pass the infrastructure bill, noting that holding it “hostage” won’t help secure his support for reconciliation.  “As more of the real details … are released,” he continued, “what I see are shell games — budget gimmicks that make the real cost of the so-called $1.75 trillion bill … almost twice that amount, if the full time is run out.”  He added, “The political games need to stop.”

Meanwhile, the public sniping across factions shows no sign of abating.  In a barely concealed jibe at Manchin and Sinema, Sen. Bernie Sanders (I-VT) had this to say: “The problem is not with the President, the problem is with members here who, although they are very few in number, they are a significant minority, think that they have a right to determine what the rest of the Congress should be doing.”

House progressives seem intent to maintain their leverage and continue their fight to strengthen reconciliation along ideological lines.  Sanders’ statement only seemed to add fuel to their fire.

Speaking of leverage: progressives are acting rationally.  In this process, it seems that nearly everyone has it.  As former leadership staffers, we can’t recall a time when a group of just 5 House members—let alone the 90-plus in the progressive caucus, or the dozens who consider themselves moderates—could stop legislation of this magnitude from passing.

Yes, as is obvious, the Senate is operating on a knife-edge, with only one senator needed to derail a bill.  But so is the House.  Recall the Freedom Caucus as the thorn-in-the-side of Speaker John Boehner.  A helpful analogy, but his vote margin during critical budget fights was far larger than Pelosi’s, giving him some, albeit thin, cushion (aided by some Democrats willing to help).  Pelosi has no such wiggle room (and with no Republicans willing to help).

In addition to getting consensus across factional lines, party leadership is contending with process.  Consider the House.  It’s entirely possible that, once House Democrats have the votes, they move immediately to vote on BBB and infrastructure.  And, per House rules, they could do that without having a final score on the BBB from the Congressional Budget Office and Joint Tax Committee.  That would be odd, to say the least—this is a budget reconciliation bill, after all—but given there’s little time, such niceties could be dispensed with.  But not so fast: getting official scores could prove consequential, and necessary, to moderates concerned about voting for the BBB.

In the Senate, there’s no such discretion; process is integral to how the chamber functions, especially when it comes to reconciliation.  Scores are necessary, as is getting resolution on myriad Byrd rule questions (see, for instance, immigration), many of which will be raised ad nauseam by Republicans.  Speaking of which, Senate Republicans believe the House draft bill is rife with “Byrd-able” provisions, raising the prospect of additional wrangling between Manchin, Sinema, progressives—and many others.

As of this writing, formal engagement with the Parliamentarian (immigration excepted) has yet to begin in earnest.  Also, with a bill this big in size and scope, there are bound to be drafting errors, so regardless of whether on overall deal is struck, a Senate substitute is in the offing.  That means the House will likely have to vote twice on the BBB. 

All this process pushes negotiations ever closer to early December, when Congress must deal with an expiring continuing resolution to keep government operating, and possibly an increase in the federal debt limit.  As to the latter, some are speculating that Treasury has more time to employ “extraordinary measures,” thus punting the so-called X-date to as late as February.  But one problem (among others): if its passes and becomes law, the bipartisan infrastructure bill requires a general fund transfer to the highway trust fund of $118 billion ($90 billion for highways; $28 billion for mass transit).  That could accelerate the X-date.

Time may be running out for Senate Majority Leader Chuck Schumer (D-NY) to proceed with using reconciliation to raise the debt limit.  Schumer contended last week that doing so would take two weeks.  As we noted last week, the 11 Republicans, including Senate Minority Leader Mitch McConnell (R-KY), who helped pass last month’s short-term debt limit deal, were infuriated by Schumer’s partisan rant after the October deal passed.  The 11 may not repeat the favor this time around.


Appropriations – With that in mind, we still see little chance of an omnibus passing at the end of the year.  Appropriations Committee Vice-Chair Richard Shelby (R-AL) put it bluntly, “Until reconciliation, the debt (limit), infrastructure — they gotta get out of the way — and I think our focus will then be on funding the government.”  On getting something done this year, Shelby said, “It would take a miracle.”  While much of the attention is on defense and non-defense spending, many Republicans are incensed over Democrats’ poison-pill policy riders, particularly around abortion-related provisions.


House Republicans – House Republicans are holding another series of roundtable meetings this week designed to highlight key policies in the reconciliation package that Republicans oppose. This week’s meetings will cover the following topics:

  • Local business taxes and regulations – November 2nd
  • Nationalized elementary schools – November 3rd
  • “Made in America” tax – November 4th
  • Socialized medicine – November 5th

In addition, House Republican leadership and staff directors just completed a multi-day planning session to prepare for end-of-year business and a possible GOP majority in 2023.


Senate Floor This Week – As the Senate waits to see what the House can pass, it will work on the following nominations:

  • Beth Robinson to be United States Circuit Judge for the Second Circuit;
  • Toby Heytens to be United States Circuit Judge for the Fourth Circuit;
  • Jonathan Davidson to be Deputy Under Secretary of the Treasury;
  • Benjamin Harris to be an Assistant Secretary of the Treasury;
  • Isobel Coleman, of New York, to be a Deputy Administrator of the United States Agency for International Development;
  • Jeffrey Prieto to be an Assistant Administrator of the Environmental Protection Agency; and
  • Rajesh Nayak to be an Assistant Secretary of Labor.