Biden Says Infrastructure Can Wait, Spending Plan May Shrink

(Bloomberg) -- President Joe Biden reset Democrats’ expectations for his economic agenda Friday, telling lawmakers to expect a smaller tax and spending package and ending chances that a bipartisan infrastructure bill would get a vote any time soon.

In remarks to a closed-door meeting of House Democrats, Biden said the Senate-passed legislation with $550 billion in new infrastructure spending could wait. That put an end to a week of intra-party drama in the House, but he also offered the two feuding wings of his party what amounted to partial victories.

For progressives, Biden re-tied infrastructure legislation to a sweeping expansion of social programs and climate mitigation. But moderates got backing to shrink that package from the $3.5 trillion originally planned.

“I’m telling you we are going to get this done,” the president told reporters after leaving the meeting. “Doesn’t matter when. It doesn’t matter whether it’s in six minutes, six days or six weeks.”

The Flow Chart

Democrats have been at a stalemate over how they would move on Biden’s agenda, with moderates insisting that infrastructure -- which has already passed the Senate -- be cleared by the House now and progressives threatening to sink the bill unless the bigger package moved in tandem.

Biden’s visit could serve as a way to slow down a legislative process in a body that thrives on urgency and deadlines to reach complicated deals. Both moderates and progressives said Friday that progress towards a deal had been made in recent days, though many were skeptical that a comprehensive agreement on the so-called reconciliation bill could be crafted in such a short time span.

The indefinite delay after a week of drama and feuding among Democrats marks a rare political miscalculation by House Speaker Nancy Pelosi, who has built a reputation for having a firm grip on the Democratic caucus and a keen grasp of vote counts in the House. She had previously promised the vote on the physical infrastructure bill would occur this week.

It also risks further eroding Biden’s standing with voters, which has already taken a hit as a result of the Covid-19 delta variant surge, the chaotic withdrawal from Afghanistan and rising inflation. The latest Gallup poll average has him at 43% approval, down from 57% earlier in the year.

Stumbling Blocks

One of the main stumbling blocks to drawing up the tax and spending plan has been objections by Senators Joe Manchin of West Virginia and Kyrsten Sinema of Arizona to the $3.5 trillion price tag. Their votes are pivotal in the 50-50 Senate, with Republicans united in opposition.

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Representative Jimmy Gomez of California said Biden threw out $2 trillion as a hypothetical range for a potential deal. According to another participant in the meeting, the president talked about a range of $1.9 trillion to $2.3 trillion based on discussions with Manchin and Sinema. Biden also noted that he had spent 100 hours with Manchin and Sinema in an effort to reach agreement on the social-spending bill.

“He was able to escalate and defuse,” House Ways and Means Committee Chairman Richard Neal of Massachusetts said. “He escalated the argument about why we need to do some of these things and he defused some of the tension in the room by saying let’s do what we can get.”

Maryland Representative Jamie Raskin said progressives weren’t concerned that the topline figure for the spending package was destined to come down.

‘Right Number’

“We understand that there are different proposals for the amounts of money to be spent, and we’re just going to have to come up with the right number,” Raskin said. “And maybe not everything can be funded for 10 years. Maybe it’s going to be a lesser period of time.”

The president explained that the party doesn’t have the type of majorities the Democrats enjoyed under Lyndon Johnson when they implemented major social reforms in the 1960s, one participant said.

Representative Henry Cuellar, a Texas Democrat, said the fates of the infrastructure bill and the spending plan are now re-linked, something that moderates were hoping to avoid.

“We are trying to pass this bill, but we heard the president of the United States, that he wants to link both of them together,” Cuellar said, adding that he plans to continue to press Pelosi for a vote on the infrastructure bill.

Pelosi’s Pledge

Pelosi had originally promised party moderates a vote on that bill on Sept. 27, in exchange for their support for the far more sweeping part of Biden’s economic agenda, which features higher taxes on corporations and the wealthy and spending on health-care, elder-care, child-care and climate programs.

But a significant number of the 95 House members who label themselves progressive objected. They threatened to vote against it unless the larger package moved in tandem. With Republicans united in opposition to the tax and spending plan and with only a slim majority in the House, Pelosi has few votes to spare.

“There is a little distrust among progressives and the moderates,” Cuellar said.

Lawmakers will have another month to continue to negotiate both bills until they hit another deadline -- at the end of October, when authorization expires for surface transportation spending. Longer-term funding is embedded within the infrastructure bill. The House is prepping a 30-day extension for the surface transportation authorization, which expired Thursday and would put 3,700 federal workers on furlough without legislative action.

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