Washington isn’t going to let you sweat the small stuff. Of the five fiscal pieces lawmakers are considering, they addressed two yesterday. The Congress passed a continuing resolution (CR) to ensure the government will stay open and to provide emergency funding for recent climate-fueled natural disasters (among other things). The December 3 deadline under the CR for FY22 appropriations indicates Washington will remain a risk focus through much of the year.
The October 18 debt ceiling deadline remains the driver of the near term 4Q21 Washington risk, though we maintain default is highly unlikely. We hope to be wrong that averting default will require Senate Democrats to report a second FY22 budget resolution to raise the debt ceiling by $7 – 10 trillion. But that looks like an unavoidable course. However they get there, Democrats are in line to get credit or blame for saving the country’s ability to manage its balance sheet – for whatever that’s worth.
We agree with consensus that enactment of the Senate infrastructure bill makes sense for nearly all 532 current members of Congress (three vacancies remain). The infrastructure House floor vote link to the reconciliation bill obviously is political but that doesn’t diminish its salience. In fact, House Democrats’ intense focus on Senator Kyrsten Sinema’s (D-AZ) objections carries some risk of escalating historically interesting House/Senate majority animus. We’re not worried yet but if one or two Senate Democrats force that body below $2 trillion for reconciliation, the fiscal policy management of both bills becomes tougher. Thus far, these squabbles are routine.
Recent attention afforded Senator Joe Manchin’s (D-W.Va.) reconciliation offer is both understandable and not motivational since he’s been consistent on these points since August. Democrats in both bodies need to hear from Senator Sinema on her reconciliation offer before assessing risks or upsides of that endgame.
The growingly common refrain that White House messaging has been deficient around the stimulus (reconciliation) in the American Families Plan and infrastructure bills is fair on its face. But that observation ignores the complications of how best Democrats can resolve internal disagreements of timing infrastructure House votes and the content and costs of the reconciliation bill. That tension has been playing out this week and is likely to continue at least through the next two weeks.
Another pertinent question centers on why some politicians of both parties, mainly Republicans, get away with stiffing legislation solely designed to benefit working- and middle-class voters. And why there aren’t more headlines about the irresponsibility of creating bills but refusing to allow them to be paid through meaningful tax reform.
There are too many permutations of how the gap between Democrats on infrastructure and reconciliation might be closed; we continue to count enactment of both as most likely.Our previous comments on campaign finance largely explain why some members happily vote against programs capable of improving their constituents’ lives. We’ll reserve additional commentary on media’s role in the mess for another note
