On a 69-30 vote today, the Senate approved a $1.2 trillion physical infrastructure bill that provides $550 billion in newly authorized spending on roads, bridges, airports, electricity grids, water systems and broadband. The measure now moves to the House as a game of political chess unfolds on a separate $3.5 trillion package that authorizes investments in childcare, education, housing and climate resiliency, as well as enhances Medicare coverage.
Hours after bipartisan approval of a historically large infrastructure bill, Senate Democrats on a party-line 50-49 vote adopted a $3.5 trillion budget reconciliation resolution that authorizes much of what President Biden recommended in his American Families Act. Legislation will be debated over the next few months that implements the budget resolution.
Many observers thought a bipartisan infrastructure bill was politically unachievable, despite support for that approach by President Biden. The first attempt at a bipartisan physical infrastructure package collapsed. The second attempt, shepherded by GOP Senator Rob Portman of Ohio and Democratic Senator Krysten Sinema of Arizona, succeeded.
The bill allocates:
- $110 billion in new funding for highways and bridges;
- $66 billion for passenger and freight rail;
- $55 billion to upgrade water systems;
- $65 billion to modernize the nation’s power grid;
- $47 billion to respond to wildfires, droughts, heat waves and coastal erosion caused by rising sea levels;
- $39 billion for public transit;
- $17 billion for ports;
- $25 billion for airports;
- $11 billion for highway and pedestrian safety; and
- $15 billion to build out a national network of electric vehicle charging stations, provide incentives to low-emission school buses and ferries and promote fueling infrastructure for hydrogen, propane and natural gas.
Biden has endorsed the plan, even though it is roughly half of what he proposed. Oregon Congressman peter DeFazio, who chairs the House Transportation and Infrastructure Committee, has expressed reservations about the Senate compromise, which is lower than the $715 billion in new physical infrastructure spending the House has already passed.
A more formidable political obstacle is the $3.5 billion human infrastructure proposal that Senate Budget Chair Bernie Sanders unveiled this week and Senate Democrats adopted early Wednesday. The proposal was able to move forward without Republican votes because Senate procedural rules exclude budget reconciliation from filibusters. West Virginia Democratic Senator Joe Manchin voted for the resolution, but he expressed concern afterward about how size of spending it would allow could overheat a recovering national economy. Sanders called the resolution a generational investment and a new direction for the country.
There are other complicating factors – the accelerating spread of the Delta Variant, inflationary fears and simmering discontent among minorities about the lack of action on voting rights and immigration.
Speaker Nancy Pelosi has said the bipartisan physical infrastructure bill won’t be considered in the House until the Senate acts on the budget reconciliation package, setting up a political chess board that could result in Biden securing two of his top policy goals or forcing a stalemate if moderates in both party caucuses get cold feet. The political chess moves won’t occur until September following the traditional congressional summer recess. The target Democrats have informally set is final passage of both the physical infrastructure bill and the budget reconciliation resolution by mid-September.
There are other complicating factors – the accelerating spread of the Delta Variant, inflationary fears and simmering discontent among minorities about the lack of action on voting rights and immigration. The return of pandemic conditions that are flooding hospitals may delay economic recovery, especially in the hospitality industry that has just begun to regain steam.
Republicans have amplified concerns about inflation, pointing to higher gas prices, groceries and other staples. The Federal Reserve and most economists view inflationary pressures as transitory, caused by demand overwhelming slowly restored production and supply lines. Congressional approval of $4 billion in additional spending could be blamed for further overheating the economy, though Biden and economic analysts argue added funding will stimulate a quicker, more complete economic recovery.
Democrats are feeling the political heat for not advancing voting rights legislation, as their top two priorities are stalled in the Senate. House Majority Whip James Clyburn of South Carolina told NPR today that Democrats are pursuing a three-legged stool – a bipartisan physical infrastructure measure, a robust budget reconciliation package and voting rights legislation that at least prevents what he termed “nullification” of election results by state powerbrokers. Clyburn indicated negotiations are underway in the Senate on a bipartisan voting right bill that could move past a filibuster. Chances of filibuster reform appear, at least for now, off the table.
Democratic leaders are exploring adding immigration provisions to the budget reconciliation measure, but that must pass muster with the Senate Parliamentarian. In a previous determination, the Parliamentarian ruled a $15 minimum wage proposal didn’t qualify for inclusion in a budget reconciliation resolution.
The Senate may have acted sooner on the bipartisan physical infrastructure bill except for a lingering debate over cryptocurrency regulation and taxation. A bipartisan amendment to clarify what and who would be covered by the provision failed to pass on the floor. Senator Ron Wyden, who chairs Senate Finance, expressed continuing concerns the amendment language was too broad to “protect privacy and security”. Further negotiations are expected and could be included in a House-Senate conference committee.
NPR Summary of Budget Reconciliation
Health, Education, Labor and Pensions Committee: $726 billion toward universal pre-k for 3 and 4-year-olds, childcare for working families, tuition-free community college, investments in historically Black colleges and universities, and investments in primary care.
Judiciary Committee: $107 billion toward lawful permanent status for qualified immigrants, border security measures.
Finance Committee: At least $1 billion in deficit reduction, with investments in paid family and medical leave, ACA expansion extension, expanding Medicare to include dental, vision and hearing benefits along with lowering the eligibility age. Also included are investments to address health care provider shortages, the expansion of the child tax credit, long-term care for seniors and people with disabilities, clean energy, manufacturing, and transportation tax incentives, housing incentives. The following offsets are listed for these initiatives: corporate and international tax reform, taxes from high-income individuals, IRS tax enforcement, health care savings and the carbon polluter import fee.
Agriculture Committee: $135 billion to go toward agriculture conservation, drought and forestry programs to reduce carbon emissions and prevent wildfires, climate research, debt relief, child nutrition, and funding for a Civilian Climate Corps. The budget outline aims to meet Biden’s goal of 80 percent clean electricity and 50 percent carbon emissions by 2030.
Banking and Housing Committee: $332 billion for housing affordability, rental assistance, homeownership initiatives, revitalization projects, zoning, transit improvements and public housing investments.
Energy and Natural Resources Committee: $198 billion toward clean electricity payment program, financing for domestic manufacturing of clean energy and auto supply chain technologies, federal procurement of energy efficient materials, and climate research.
Environment and Public Works Committee: $67 billion toward funding low-income solar technologies, environmental justice investments in clean water affordability and access, EPA climate and research programs, federal investments in energy efficient buildings and green materials, and investments in clean vehicles.
Homeland Security Committee: $37 billion toward improving cybersecurity infrastructure, border management investments, federal investments in green materials procurement.
Indian Affairs Committee: $20.5 billion toward Native health programs and facilities, education, housing, energy and language programs.
Small Business and Entrepreneurship Committee: $25 billion toward small business access to credit, investment and markets.
Veterans Affairs Committee: $18 billion toward upgrading VA facilities.
How it will be paid for: The plan calls for the investments to be offset by a combination of new tax revenues, health care savings and long-term economic growth. It calls for raising money through IRS enforcement and proposes a new fee on carbon pollution. The plan prohibits tax increases on families making under $400,000 a year, small businesses and family farms.
