Democrats have all the tough fiscal decisions in front of them, still. But that doesn’t mean some underbrush hasn’t been cleared. Senate Democrats are set to meet Wednesday ostensibly to discuss all aspects of the pending fiscal package. This follows a leadership meeting yesterday in which a few non-leadership members made the attendee’s list. Separately, President Biden is expected to meet today with some congressional members. The hand-to-hand negotiations necessary to produce expansive legislation underway for two months are picking up pace.
Stimulus totaling approximately $2 trillion remains the more likely reconciliation number despite Senate Budget Committee Chairman Bernie Sander’s insistence that his original $3.5 trillion is viable. As we and many others have written, unless President Biden decides some portion of the bill could be deficit-financed, exceeding $2 trillion (the House marker) isn’t an option. Senator Joe Manchin is unlikely to single-handedly rewrite the Senate tax bill and kill or severely weaken the president’s cleaner energy program popular among many on the left. Our sense is that he is most focused on the energy title.
Reports yesterday that the October 31 target for the House to vote on the Senate-passed infrastructure bill likely will slip again, should not surprise many people. Speaker Nancy Pelosi had hoped to vote on the bipartisan package last month too but didn’t have sufficient votes for passage. Infrastructure probably will not come to the House floor until bicameral Democrats have strong confidence on the topline reconciliation number, supported by details of an agreement between House and Senate tax-writing committee chairs on how much money they must raise. Infrastructure has become something of a challenge coin among Democrats.
The House Ways and Means and Senate Finance Committee leaders haven’t closed out those discussions because changes to the House committee-passed bill are certain – especially as the international and corporate tax and green energy provisions remain in flux. A handful of senators and representatives are fighting over what each of the various factions of Democrats needs to support the reconciliation and infrastructure packages. Messy but true. This is normal during yearend negotiations and big-ticket legislation, and even more so when both conditions are present.
Fear of failure and hope for success of Bidenomics will both be with us until these issues (and the debt ceiling) are resolved. We’ve written since August that this Congress would be engaged on fiscal matters until late in December. We see nothing yet indicating that’s wrong. Current fiscal year funding expires December 3. We continue to expect a short-term extension of that deadline into late December. It’s highly likely the third week of December will be the busiest of the year in Washington. Here’s hoping there are a few presents mixed in with the lumps of coal.
We’ll repeat something else we wrote on Sunday evening: the outcome of Virginia’s November 2 gubernatorial election will significantly influence what passes in December. That factor has grown in prominence that was unexpected before the decline of President Biden’s political capital. In a whisker tight balance of power, this too is normal. Try instead to sneak a peek at fall foliage – it’s prettier, more soothing, and more predictable than the legislative process.
