The scariest part behind them, Democrats’ leaders are personally engaged in trying to close the Bidenomics reconciliation deal. Completing that task involves myriad small discussions on final language for dozens of provisions which is very much par for this course. Also, very common is the range of speculations regarding the House floor schedule. The safer estimate is sometime this week but that is a soft estimate with moderate not strong conviction.
Senate Budget Committee Chairman Bernie Sanders earlier today suggested the House of Representatives hold off voting on what likely will be a nearly $2 trillion package until all major components are agreed to within the Senate Democrats’ caucus. The Vermont progressive today echoed words used by House progressives throughout much of late summer, which had fallen by the wayside.
Meanwhile, Speaker Nancy Pelosi remains hopeful her caucus can agree on language to help reduce the cost of prescription drugs and hold a vote on the reconciliation Tuesday. As of today, nothing has been sealed on modifying the existing $10,000 cap on state and local tax deductions (SALT-D). Given everything that has been agreed to in principle, an early House vote is possible, but we think unlikely. Sanders’ caution follows the ages-old negotiations axiom that ‘nothing is agreed until everything is agreed.’
Substance outranks timing as the remaining risk. Voting on stimulus sooner rather than later surely appeals to all proponents, especially those having to cajole and count votes. But the other legislative truism also points to a slower pace: bills do not come to the floor until the Speaker has the votes. This rationale points to a House vote later this week or plausibly next week.
Taking stock of the five fiscal pieces dominating Washington this quarter suggests a successful first-year economic program for President Biden: (1) FY21 supplemental disaster spending was enacted in September; (2) FY22 appropriations are in good condition as bicameral, bipartisan negotiators are closing in on a topline for fiscal years 2022 and 2023, wresting control from congressional leaders and restoring it to the appropriations committees; (3) Stimulus and (4) infrastructure are tied together and highly likely headed for November votes in the House; and (5) The debt ceiling increase will be included in second FY22 reconciliation bill, which the Pelosi endorsed about ten days ago. It is possible debt ceiling legislation will carry over into January, but we still believe those votes come in December.
Congress very likely will not adjourn for the year before more than half of the advent calendar doors have been opened. Risks to fiscal legislation have dwindled significantly, leaving three or four thorny items with the potential to block the achievement of a very ambitious economic plan after three months of treacherous negotiations. As we close October, treats are winning out over tricks.
