Infrastructure deal reached, now comes the hard part

Dealmakers must sell plan to skeptics on the right and the left

Flanked by five Democratic and Republican senators, President Joe Biden discusses a agreement on infrastructure Thursday outside the West Wing. (Jim Watson/AFP via Getty Images)
Flanked by five Democratic and Republican senators, President Joe Biden discusses a agreement on infrastructure Thursday outside the West Wing. (Jim Watson/AFP via Getty Images)
Posted June 24, 2021 at 5:01pm

President Joe Biden may have signed off on a bipartisan Senate infrastructure plan worth $579 billion in new spending. But the next step — selling skeptical senators while simultaneously advancing a reconciliation bill that may total in the trillions of dollars — may prove a difficult needle to thread.

The success or failure of the two bills appears linked, with Biden, Speaker Nancy Pelosi and Senate Majority Leader Charles E. Schumer all saying Thursday the bipartisan proposal won’t become law without the reconciliation package.

"If this is the only thing that comes to me, I’m not signing it. It’s in tandem,” Biden said of the bipartisan package at the White House.

Pelosi, D-Calif., said just a few hours earlier that she will hold off on passing the bipartisan plan until the Senate approves the reconciliation bill in order to link the two proposals together. “We will not take up a bill in the House until the Senate passes the bipartisan bill and a reconciliation bill,” she said during a press conference.

Schumer, D-N.Y., later said he plans to move both the bipartisan bill and approve a budget resolution in July. That resolution, once adopted by the House and Senate, will launch the reconciliation process, which would likely include Biden’s more partisan priorities, such as universal Pre-K, two years of free college and national paid leave.

“Everyone in our caucus knows we can’t do one without the other,” Schumer said. “You don't even have votes for the one unless you have the votes for the other.”

Even West Virginia Democrat Joe Manchin III admitted Thursday there will be a reconciliation package, just that no one yet knows how much funding it will include.

The plan announced by Schumer and Pelosi sets up the prospect for a dizzying flurry of congressional action on infrastructure this summer, beginning with the House taking up a $715 billion surface transportation bill next week. Pelosi said late Wednesday the House will move forward with that bill despite the separate bipartisan proposal.

$973 billion over five years

The bipartisan deal Biden blessed Thursday would spend $109 billion for roads, bridges and major projects, $11 billion for safety, $49 billion for transit, $66 billion for rail and $7.5 billion for electric vehicle infrastructure, a key Biden priority.

The framework also includes $1 billion to remove or modify infrastructure that isolated Black and Brown communities, a key Biden priority aimed at advancing racial equity. And it included $7.5 billion for electric buses and transit.

The plan includes $25 billion for airports, $16 billion for ports and waterways, $55 billion for water infrastructure and $65 billion for broadband. It includes $21 billion for environmental remediation; $73 billion for power infrastructure, including grid authority, $5 billion for western water storage and $47 billion to rebuild infrastructure in a way that endures severe weather events.

In all, the total package would spend $973 billion in new and baseline dollars over five years or $1.2 trillion over eight years. While some Republicans put the new spending at $559 billion because they counted $20 billion in already appropriated broadband dollars as existing spending, a release from Biden’s office put the figure at $579 billion.

IRS enforcement among pay-fors

The group agreed on a wide range of options to pay for the five-year plan, including increased IRS tax enforcement targeting top earners that would net $100 billion after an investment of $40 billion, redirecting unused unemployment insurance relief for $25 billion, and repurposing $125 billion of unused COVID relief dollars, which Biden had initially opposed.

The group also agreed to use revenue from the sale of radio spectrum for 5G wireless phone service for $65 billion, extend expiring customs user fees to bring in $6.1 billion and selling some of the Strategic Petroleum reserve to bring in $6 billion in order to pay for the plan. Twenty-billion dollars for broadband came from repurposing money previously appropriated for broadband that has not yet been spent. The group estimated $58 billion from dynamic scoring and $100 billion from private activity bonds, direct pay bonds, public private partnerships and asset recycling for infrastructure investment, according to a draft of the agreement obtained by PBS Newshour.

Sen. Rob Portman, R-Ohio, said among the pay-fors is $30 billion in credit to the federal government from tolls to meet state/local match requirements.

He said the group will work on the bill over recess, and used some language from the Senate Environment and Public Work portion of the highway bill that the committee approved May 26. “That makes it easier to do the language,” he said, estimating that 60 percent of the language is already written.

Sen. Jon Tester, D-Mont., said the UI fraud adjustments could “raise some pretty significant dollars,” adding that the IRS enforcement money is also “significant,” he said.

Not just ‘a hot mess’

Still, he said, “we’re going to have to sell it” to lawmakers, including some Republicans who may find the plan too ambitious, and Democrats who will judge it to be too modest.

“It’s a huge investment,” he said. “I think it’s an incredibly positive thing. Is it going to be as much as some people want? No. Is it going to be more than other people wanted? Yes. But in the end I think it's gonna be really good for the country and it shows the world that we're not just, you know, a hot mess here.”

Republican lawmakers said the Democratic plan, which aimed to give Biden a win on the bulk of his domestic priorities, was not necessarily a deterrent to voting for the bipartisan agreement.

“I’m going to make a decision based on what’s on the floor,” said Sen. John Barrasso, R-Wyo., of the bipartisan plan. “I want to make sure it’s legitimate infrastructure, it’s fully paid for and it doesn’t touch the taxes.”

Still, he criticized Pelosi’s decision to hold off on voting on the bipartisan plan until reconciliation had passed, calling it a “Pelosi manipulation.”

“Her goal really…is this bullet train to socialism,” he said, calling the infrastructure investment a “sweetener that allows them to try to spend all this additional money through reconciliation on their entire socialist agenda.”

House Democratic rift

In the House, Democrat Kurt Schrader of Oregon also opposed Pelosi’s strategy, calling the reconciliation process “completely unwarranted.” He said more than five fellow Democrats are likely to oppose a reconciliation bill that spends trillions of dollars, enough to kill it in the 220-211 House if every Republican votes "no." “We need to ratchet down our spending at this point in time,” he said. “We’re spending money ultimately our kids will have to pay.”

Senate Budget Chairman Bernie Sanders, I-Vt., has said he’s looking at including up to $6 trillion in reconciliation instructions in the fiscal 2022 budget resolution, but noted Thursday that if the bipartisan infrastructure plan gets broad approval he could subtract that amount from reconciliation instructions.

“If the bipartisan bill is passed, we're certainly not going to build the same bridge twice so we can deduct some of what they have passed from the reconciliation,” Sanders said.

Asked Thursday if Democrats support tax increases on corporations and wealthy Americans for reconciliation — as Biden originally proposed to do for his entire plan — Schumer said yes.

“I believe there should be and I think there’s a large consensus in our caucus that that is the way to go,” he said.

Sanders also noted all Senate Democrats need to support the budget resolution in order to unlock the reconciliation process.

“I think $6 trillion is the appropriate amount of money to address the crises facing this country,” Sanders told reporters. “But obviously I have to work with 49 other senators to come up with a bill.”

Lindsey McPherson contributed to this report.