Rep. Alexandria Ocasio-Cortez of New York assailed the crawling pace of negotiations with Republicans on Wednesday, arguing Democrats are wasting time on the legislative calendar.
“Dems are burning precious time & impact negotiating w/GOP who won’t even vote for a Jan 6 commission,” she wrote on Twitter. “McConnell’s plan is to run out the clock. It’s a hustle. We need to move now.”
She also cited the futile experience Democrats had negotiating the Affordable Care Act with Republicans over a decade ago. They eventually passed it without Republican backing.
The New York congresswoman also strongly criticized the idea of Democrats “playing patty cake” with Senate Republicans in an earlier tweet, saying the current array of economic, political, and climate challenges facing the country demanded urgent action.
It comes as Biden recalibrates his approach a day after pulling the plug on negotiations with Sen. Shelley Moore Capito, the chief Republican negotiator on infrastructure. Both sides failed to strike a deal with sharp disagreements on the size of a package and how to finance it.
Now, another bipartisan group led by Sens. Joe Manchin of West Virginia and Mitt Romney of Utah is poised to take the lead. Romney, along with Sen. Bill Cassidy, told Insider on Tuesday that the group of 10 senators was eyeing repurposing stimulus aid to states to finance infrastructure spending. Biden has already rejected that approach.
Romney on Wednesday ruled out tax hikes in the emerging plan. Tax increases on large firms, wealthy investors, and other high-earning Americans have constituted a core part of Biden’s economic spending plans.
Four Senate Democrats who lean moderate also expressed heightened concern that climate provisions were at risk of being left out in any infrastructure package. Biden’s two-part plans include setting up electric-vehicle-charging stations across the country.
“An infrastructure package that goes light on climate and clean energy should not count on every Democratic vote,” Sen. Martin Heinrich tweeted on Wednesday.
After nearly six weeks of back and forth between President Joe Biden and West Virginia Sen. Shelley Moore Capito on infrastructure, Biden ended the negotiations on Tuesday after failing to come to an agreement.
Capito said in a Fox News interview on Wednesday that the White House “kept moving the goalposts” on the Republican group, and she was “frustrated” with how things turned out.
“I’m a bit disappointed and frustrated that the White House kept moving the ball on me and then finally just brought me negotiations that were untenable and then ended the negotiations altogether,” Capito said. It’s unclear exactly what Capito was referring to, but the public statements from both sides indicate the White House kept coming down on the cost of the package and the GOP was inflexible.
There seemed to be disappointment on both sides. White House Press Secretary Jen Psaki said in a statement on Tuesday that Biden was disappointed that “while he was willing to reduce his plan by more than $1 trillion, the Republican group had increased their proposed new investments by only $150 billion.”
Capito and the group of Republicans first brought Biden a $568 billion infrastructure offer, which was significantly smaller than the $2.25 trillion infrastructure plan he proposed. He then offered the group $1.7 trillion, and even suggested going as low as $1 trillion, but the GOP only came back to him with a $928 billion offer, which included only $150 billion in new spending.
Since unveiling his plan, Biden has kept saying he’s committed to a bipartisan agreement, as seen with his willingness to come down on cost to get both sides of the aisle on board. For instance, after his talks with Capito collapsed, he reached out to some members of a new bipartisan group about another infrastructure proposal. Sen. Mitt Romney of Utah, a member of that group, has already said that tax increases are out of the question.
Using corporate tax hikes to fund his plan is one of the things Biden has remained firm on, but the GOP group never budged on the possibility of doing so, calling it a “red line” and suggesting repurposing unused stimulus funds instead.
“The pay-fors that they brought to me the final time were many taxes,” Capito said. “We had told them before we could do this without raising taxes and we gave them great opportunity to look at our pay-fors and how we would pay for this. I think when they brought the tax hikes before me the last time when I was in the Oval Office I knew they weren’t really serious at that point.”
Given that tax hikes are a core component of Biden’s plan, the likelihood of reaching a bipartisan agreement is slim, and Senate Majority Leader Chuck Schumer said during a press briefing on Tuesday that Democrats are preparing to use reconciliation, meaning passing a bill without any GOP votes.
“We all know as a caucus we will not be able to do all the things that the country needs in a totally bipartisan way,” Schumer said. “So at the same time, we are pursuing the pursuit of reconciliation.”
With negotiations on a major infrastructure package likely to stretch into June, the White House is poised to blow past its self-imposed Memorial Day deadline, which was meant to ensure significant progress on a bipartisan plan.
Senate Republicans led by Sen. Shelley Moore Capito (W.Va.) are preparing to make a $1 trillion offer as soon as Thursday. Another bipartisan group of six senators that includes Joe Manchin (D-W.Va.) and Susan Collins (R-Me.) are preparing another offer to President Joe Biden in case those talks stall.
Manchin is insisting on more time to secure a deal, saying on Tuesday “this is the long game, not a short game.” The White House want to approve a multi-trillion spending package to upgrade roads and bridges, in addition to setting up universal pre-K, tuition-free community college, and cash payments to families.
But some Democrats doubt Republicans’ genuine interest in giving Biden a bipartisan victory and are wary of the ongoing talks turning into a time-consuming dud. They cite huge differences that remain to be bridged on the size, scope, and basic definition of infrastructure. Democrats are anxious to shepherd along new economic programs using their thin majorities in the House and evenly divided Senate.
Their potential to drag into the summer is prompting comparisons to negotiations over a decade ago between President Barack Obama and Republicans on overhauling the healthcare system.
“When I read the comments from Sen. Manchin asking for more time, all of a sudden I had bad flashbacks to Obamacare where there was a push and pull between the desire for more time and the reality that Republicans were never going for it,” Jim Manley, a former aide to Senate Majority Leader Harry Reid (D-Nev.), told Insider.
Max Baucus, a former Democratic senator and one of the architects of Obamacare, said in an interview he was getting “somewhat” a case of déjà vu seeing the infrastructure discussions unfold.
“I’d keep pushing forward as hard as I could, but there’s not much time left. I’d give it a month or so and then tell Schumer to push reconciliation,” the former Montana lawmaker said, referring to a legislative tactic available to Senate Majority Leader Chuck Schumer to approve some bills with only a simple Senate majority.
“I doubt you’re going to see much bipartisanship in the end”
In 2009, the Obama administration chased support from a bloc of moderate GOP senators for the plan that became the Affordable Care Act. As chair of the Senate Finance Committee, Baucus spent five months trying to draw backing from Sen. Chuck Grassley (R-Iowa), the ranking Republican on the panel, for a more “durable” health law.
That effort collapsed amid sharp disagreements on tax increases and whether Americans should be obligated to buy health insurance. Republicans stepped up their attacks and cast the healthcare bill as federal overreach, with Grassley falsely warning of the government “pulling the plug on grandma” at an Iowa town hall that August.
Anger over how voters perceived Obamacare contributed to major Republican victories in the 2010 midterms, one that lost the House for Democrats and effectively crippled the next six years of Obama’s legislative agenda. Now, Baucus sees his experience as a cautionary tale as Democrats attempt to forge ahead with a massive two-part package to reconfigure the economy with new spending on physical infrastructure, healthcare, and education.
“I doubt you’re going to see much bipartisanship in the end. Frankly, a lot of Republicans would rather not see a bipartisan bill,” Baucus told Insider. “They say they would, but deep down they don’t.”
Baucus said he believes next year’s midterms are already factoring into the negotiations, in the sense that a party-line reconciliation bill from Democrats would almost surely include tax hikes on the wealthy and large firms, and a lot of Republicans “are going to run against those tax increases in 2022.”
Sen. Ron Wyden (D-Ore.) said in an interview he was “very concerned” about Senate Republican leader Mitch McConnell’s endgame on infrastructure, pointing to his recent comment about being “100% focused” on thwarting the Biden administration. The GOP leader also made similar remarks early on in the Obama administration.
“I’m always going to try and get a bipartisan approach, but it’s certainly a bigger lift after a statement like that,” he said.
Yet other Democrats like Sen. Tim Kaine (D-Va.) said they weren’t troubled by the state of the discussions. “I think we’re on the timeframe that I always thought we’d be on,” he told Insider. “Thus far, it’s soliciting their opinions.”
Kaine continued: “Even if we go reconciliation, we will put things in that bill that will be extremely attractive to Republican governors, to Republican mayors, to Republican interest groups.” He said he thought it was possible for Democrats to “pick up votes we weren’t expecting.”
The White House used reconciliation to approve a $1.9 trillion coronavirus relief bill in March. Biden met with Senate Republicans once in early February in a bid to broker a deal. But he ultimately abandoned those talks by the end of the month after they only put $618 billion on the table. No GOP lawmakers voted for the Biden stimulus law.
There are signs that Democratic leaders are loathe to avoid watering down bills for the veneer of bipartisanship. “Look at 200 where we spent a year and a half trying to get something good done, ACA, Obamacare, and we didn’t do all the other things that had to be done,” Schumer said on MSNBC in late January. “We will not repeat that mistake.”
Schumer told reporters on Tuesday that Democrats will move ahead with a “big bold plan” in July, suggesting reconciliation looms in the near future. Still, Capito said her GOP group would “not walk away” from the negotiating table anytime soon.
“I think you go as far as you can, but then there comes a time where the other side is just not seemingly negotiating in good faith, so you gotta stop and pass your own bill,” said Baucus.
Sen. Joe Manchin of West Virginia suggested he could derail Democratic attempts to circumvent Republicans more than once this year, arguing that embarking on the path would be harmful to the nation’s future.
Manchin said that drafting bills was “never supposed to be easy,” adding it was important to address the needs of both rural areas and urban communities in the months ahead.
“I simply do not believe budget reconciliation should replace regular order in the Senate,” Manchin wrote. “How is that good for the future of this nation?”
Manchin was referring to a tactic Democrats employed earlier this year to approve a $1.9 trillion coronavirus relief package without securing any Republican votes. It comes as a top Senate official delivered a ruling on Monday that may provide Democrats an opening to bypass the GOP at least twice more this year.
Reconciliation is governed with a strict set of rules aimed at ensuring measures are closely related to the federal budget. Using it allows Democrats to pass bills with a simple majority of 51 votes in the Senate and avoid the usual 60-vote threshold.
The White House is starting to sell its $2 trillion infrastructure plan, which includes major funding for roads and bridges, broadband, and in-home elder care among other measures.
The Biden administration outlined a corporate tax plan on Wednesday. It includes a corporate tax increase from 21% to 28%, a step amounting to a partial repeal of President Donald Trump’s tax cuts. Republicans are staunchly opposed to the business tax hikes.
That proposed tax increase recently triggered opposition from Manchin, who said last week he favored a 25% corporate rate instead. The opposition of a single Democratic senator could block the entire passage from clearing the upper chamber.
The dynamic makes Manchin a powerful figure in the Senate. Last month, he forced last-minute changes to unemployment provisions of the stimulus law, delaying votes for almost 11 hours.
Biden said on Wednesday he was open to compromise on a lower rate, though he stressed the need to pay for the plan. “I’m wide open, but we got to pay for this. I am willing to negotiate that,” he said.
The White House said on Tuesday that it is aiming to get President Joe Biden’s multitrillion-dollar infrastructure package approved within months, an ambitious timeline that underscores the administration’s desire to quickly muscle a plan through Congress.
“We’d like to see progress by May and certainly a package through by the summer,” White House Press Secretary Jen Psaki said at a daily news conference.
“At the end of the day, the president’s red line is inaction,” she said. “He won’t tolerate inaction on rebuilding our nation’s infrastructure, something that has long been outdated. He believes we need to invest in that so we can improve the lives of ordinary Americans and make it easier to do business.”
The timeline lines up with what Democrats in Congress recently outlined. Speaker Nancy Pelosi said last week that Democrats aimed to formally assemble the package in early May.
“We look forward to writing a bill, maybe much of it in the first week of May for the infrastructure piece of it. And we’ll see when the Senate then will act upon those proposals,” Pelosi told reporters at her weekly press conference on Thursday.
The speaker of the House later added that Democrats would only advance the measure once they have “the best possible bill,” a step that gives them some room to adjust. Pelosi told House Democrats on a caucus call last week she wanted to approve a bill by July 4, though she conceded it could slip to the end of the month, according to a senior Democratic aide.
Some Democrats have eyed September as a possible deadline for action, given the need for Congress to renew a highway funding bill by then.
Biden unveiled a large $2 trillion plan last week, the first of two proposals aimed at modernizing the nation’s infrastructure. The plan contained new funds to repair aging roads and bridges, eliminate lead pipes from water systems, and set up new rural broadband networks.
It also included money to support in-home care of elderly Americans to upgrade the nation’s electric grid and steadily phase out fossil fuels to combat climate change.
The second proposal, with major spending on childcare and education, is set to be released later this month. The pair of plans will form the centerpiece of Biden’s economic agenda.
However, the package has also set off substantial GOP opposition for its large scope and proposed tax increases on multinational corporations. Republicans are also critical of the swift timeline from Democrats in recent weeks.
That opposition, however, isn’t confined to Republicans. At least two Democratic senators, including Joe Manchin of West Virginia, say major elements of Biden’s plan should be adjusted to gain their votes. Manchin said he wanted a smaller corporate tax hike from 21% to 25% instead – not the 28% rate Biden is seeking.
On Monday evening, a top Senate official ruled that Democrats could revisit an earlier budget resolution used for the $1.9 trillion stimulus package to approve another bill without Republican support. That potentially opens the door for them to implement at least two more tax-and-spending measures this year on party-line votes, which could mean they won’t need any Republican votes at all for Biden’s next signature pieces of legislation.
One of them is Sen. Joe Manchin, a moderate Democrat from West Virginia who has already proven himself to be an outsized presence in the razor-thin Democratic majority. He was also a pivotal voice against the inclusion of a $15 minimum wage in the American Rescue Plan.
Now, he’s expressed his concerns with the infrastructure package. In an interview with Talkline, a West Virginia radio show, Manchin said that, “as the bill exists today, it needs to be changed.”
Regarding Biden’s proposed increase of the corporate tax rate from 21% to 28%, Manchin indicated that he doesn’t support the 28% figure and stressed that the international average is a few percentage points lower. The rate “should have never been under 25%,” he said. “That’s the worldwide average. And that’s what basically every corporation would have told you was fair.”
When asked if he would not support a bill that raises the corporate tax rate from 21% to 28%, Manchin said: “Well, the bill basically is not going to end up that way”
Manchin also said the bill wouldn’t be passed by reconciliation “unless we vote to get on it.” When radio host Hoppy Kercheval said “they” could pass the bill by reconciliation.
“No, they can’t. Not unless we vote to get on it,” Manchin said in response. “And if I don’t vote to get on it, it’s not going anywhere.”
Meanwhile, in a briefing on Monday, Biden said he was “not at all” worried that raising that rate would drive corporations to different countries. Treasury Secretary Janet Yellen also argued in support of a global minimum tax rate today.
As Politico reports, Manchin isn’t alone: Another Democratic senator, Mark Warner of Virginia, has also expressed concerns.
“I’ve had some outreach from the White House, but it was more heads-up than input into the development of the package,” he said, according to Politico. “So I’ve already expressed some concerns.”
Getting Democrats on board with the infrastructure package will be key to its passage, as Senate Minority Mitch McConnell has already said that it won’t get any GOP votes in the Senate. That means Democrats will likely have to compromise internally amongst themselves,
Senate Minority Leader Mitch McConnell said President Joe Biden’s new infrastructure package won’t get any Republican votes in the Senate, Politico reports.
At a Kentucky event, McConnell reportedly criticized the package for the impact it could have on debt, and the accompanying proposal to hike taxes on corporations.
“That package that they’re putting together now, as much as we would like to address infrastructure, is not going to get support from our side,” McConnell said, per Politico. “Because I think the last thing the economy needs right now is a big, whopping tax increase.”
McConnell already released a statement slamming the package, calling it a “Trojan horse” for tax hikes.
“Our nation could use a serious, targeted infrastructure plan,” he said. “There would be bipartisan support for a smart proposal. Unfortunately, the latest liberal wish list the White House has decided to label ‘infrastructure’ is a major missed opportunity by this Administration.”
When reached for comment, McConnell’s team directed Insider to a series of statements from Senate Republicans as well as his prior statement.
Setting the stage for more reconciliation
If no GOP members vote for the bill – as happened with the $1.9 trillion American Rescue Plan – Democrats may have to try to pass it via party-line reconciliation yet again. That could get thorny, as moderate Democrat Sen. Joe Manchin has said he wants any infrastructure package to be bipartisan and not passed via reconciliation – yet he wanted it to include tax hikes.
Democrats are also limited in how many times they can use reconciliation to pass bills ina given fiscal year, but that may be more flexible than previously assumed.
Senate Majority Leader Chuck Schumer has been looking into a potential loophole that would trigger multiple reconciliation bills in a given year, leaving Democrats with potentially multiple opportunities to pass one. And this week’s infrastructure package will be followed by another in mid-April, and Republicans’ track record indicates they won’t support that one, either.
Instead of pushing a single colossal spending bill through Congress, President Joe Biden’s advisors are reportedly expected to present a proposal this week that includes $3 trillion in spending aimed at boosting the economy and fighting climate change through separate legislative pieces.
The New York Times first reported that Biden’s economic advisors plan to recommend as much as $3 trillion to narrow economic inequality, reduce carbon emissions, and improve American manufacturing, beginning with an infrastructure bill. They cited people familiar with the plan, along with documents outlining its provisions.
The documents said the proposed package would spend heavily on infrastructure improvements, with nearly $1 trillion in spending alone for roads, bridges, electric vehicles, and more.
The second plan would be people-focused and spend heavily on education and programs to increase the participation of women in the labor force, including free community college, universal pre-K education, and a national paid leave program. Those elements are targeted at encouraging people to reenter the workforce and strengthen the overall economic recovery.
Administration officials said that while details on funding for the package are not yet determined, it might be financed by tax increases on the wealthy. Biden has already indicated that he would include a federal tax hike on high earners in his next big economic package, which would be the first major federal tax hike in nearly three decades.
Insider’s Juliana Kaplan reported Monday that Biden is likely to look at tweaks to the current tax code, instead of a new tax targeting wealth.
But whether Republicans will support one big bill, or a series of legislative pieces, depends largely on funding, and Republican lawmakers have already indicated they will not support a tax hike on the rich.
“I don’t think there’s going to be any enthusiasm on our side for a tax increase,” Senate Minority Leader Mitch McConnell told reporters last week. The Republican opposition to tax increases could prompt Democrats to bypass the GOP using reconciliation, the same tactic used to enact the $1.9 trillion stimulus law, but passing it more piecemeal could win bipartisan approval for certain aspects of the spending.
Groups of lawmakers from both parties have already met with Biden to discuss an upcoming infrastructure bill.
Democrats, like Rep. Peter DeFazio, the chair of the House Transportation and Infrastructure Committee, suggested using reconciliation in a CNBC interview to pass the next bill, but Rep. Sam Graves, ranking member of the House infrastructure panel, said in a statement that it “cannot be a ‘my way or the highway’ approach like last Congress.”
Moderate Democratic Sen. Joe Manchin said in an “Axios on HBO” interview that an infrastructure bill could be as large as $4 trillion if it’s funded by tax hikes but that he would not support reconciliation.
“I’m not going to do it through reconciliation,” Manchin said. “I am not going to get on a bill that cuts them [Republicans] out completely before we start trying.”
The White House did not immediately respond to Insider’s request for comment.
A senior Democratic senator, Ben Cardin of Maryland, was overheard in a “hot mic” moment saying the next trillion-dollar spending bill will probably have to bypass Republicans once again.
In a moment caught by C-SPAN on Monday, the chair of the Subcommittee on Transportation and Infrastructure was overheard telling Transportation Secretary Pete Buttigieg that Democrats will likely have to use reconciliation to pass an infrastructure bill, Politico first reported.
Democrats recently used reconciliation to pass the $1.9 trillion “American Rescue Plan” which President Joe Biden signed into law on Thursday. The infrastructure bill could carry an even larger price tag, and Cardin said Democrats will “most likely have to use reconciliation” to pass that one, too.
“Ultimately, it’s going to be put together similar,” Cardin told Buttigieg when speaking about the infrastructure bill. “The Republicans will be with you to a point, and then -” he tailed off, suggesting that GOP backing would taper off as Democrats assemble a large bill.
House Democrats officially began working on an infrastructure package on Friday, with Speaker Nancy Pelosi saying in a statement that she aims to negotiate with Republicans on the legislative details.
She said it was her hope that bipartisanship would “prevail as we address other critical needs in energy and broadband, education and housing, water systems and other priorities.”
President Joe Biden has already held infrastructure talks with bipartisan groups of lawmakers. On February 11, he met with four bipartisan senators on the topic, and in the beginning of March, a bipartisan group of House lawmakers joined the president to discuss possible funding methods.
After the latter meeting with Biden, Sam Graves, ranking member of the House Committee of Transportation and Infrastructure, criticized the prospect of another party-line procedure.
The next bill “cannot be a ‘my way or the highway’ approach like last Congress,” he said, referring to previous Democratic legislation advanced under Pelosi.
“First and foremost, a highway bill cannot grow into a multitrillion-dollar catch-all bill, or it will lose Republican support,” Graves said. “We have to be responsible, and a bill whose cost is not offset will lose Republican support.”
The Biden administration is reportedly weighing tax increases on wealthy Americans and large corporations to finance at least part of its domestic spending plans. Still, some experts say a significant portion of the legislation could be deficit-financed, citing the low cost of federal borrowing and the nature of infrastructure spending as a one-off investment in the economy.
On the Democratic side of the Senate, the influential moderate Joe Manchin of West Virginia said in an “Axios on HBO” interview that Democrats need to work with Republicans on the next big spending bill.
“I’m not going to do it through reconciliation,” Manchin said. “I am not going to get on a bill that cuts them [Republicans] out completely before we start trying.”
Biden has not yet announced specific funding plans for an infrastructure bill, although his campaign platform included a $2 trillion infrastructure proposal. Manchin has said he could support a bill worth up to $4 trillion, as long as it was paid for adequately.
President Joe Biden’s historic $1.9 trillion stimulus relief package just passed the House, and is set to be signed into law this week.
The bill will allocate billions towards Americans, providing relief for unemployed workers, parents, and millions more. Many taxpayers are set to receive $1,400 stimulus checks, and parents could receive up to $3,600 per child under the child tax credit.
One area where the stimulus will be acutely felt: poverty rates. Two different studies anticipate that the legislation will have a dramatic effect, projecting that millions of Americans will no longer be living in poverty in 2021. The bill, passed via reconciliation along party lines in both the House and Senate, includes measures that will expire in 2022, meaning that it’s an open question what happens to poverty rates at that point.
A study out of the Center on Poverty & Social Policy at Columbia University found that the package could nearly halve child poverty, and would more than halve the rate for Black and Hispanic children. Broadly, that study projects that the annual poverty rate would fall from 12.3% to 8.2% – meaning it would drop by a third.
Meanwhile, a study from the Urban Institute finds the plan would cut poverty by over a third. That study projects that the annual poverty rate would shrink from 13.7% to 8.7%, with 16 million fewer Americans living in poverty in 2021.
This will also impact some of those who have been hardest hit by the pandemic. Poverty rates will drop by half for those in households who experienced job losses during the pandemic, compared to a nearly one-third drop for households who did not lose jobs during the pandemic. As Insider’s Ben Winck previously reported, low-wage, minority workers were the hardest hit by pandemic unemployment.
The share of Americans in deep poverty – defined as those with resources that are less than half of the poverty threshold – would also drop by a third.
The legislation will help address some racial disparities. Historically, poverty rates have been higher for Black and Hispanic Americans. With the American Rescue Plan, it would fall 42% for Black Americans, 39% for Hispanic Americans and 34% for white Americans.
Those drops aren’t unexpected. Throughout America’s pandemic year, poverty has fallen with each new stimulus package and increased unemployment benefits, according to research from economists at University of Chicago, University of Notre Dame, and Zhejiang University.
In a statement on the bill’s passage, Biden highlighted how it will reduce child poverty, and added: “This legislation is about giving the backbone of this nation – the essential workers, the working people who built this country, the people who keep this country going – a fighting chance.”
There is that one catch, though: What happens to poverty rates after the stimulus money runs out?