As President Joe Biden prepares to announce his own infrastructure plan Wednesday, Democrats on Capitol Hill are bracing for a months-long push that will challenge the dynamics of a party that has shown few cracks in unity over the first several months of a new administration.
Congressional Democrats say they are ready to deliver on Biden’s agenda, but they also note that a two-part, sweeping $4 trillion-plus proposal will be received in a very different manner than Biden’s first significant legislative victory.
Now law, the $1.9 trillion coronavirus relief package served as a cornerstone opening achievement for not just the White House, but the Democratic majorities on Capitol Hill. But the path to a sweeping package that includes infrastructure, climate, social programs and the thorniest issues on taxes and energy policy is set to lay bare crucial differences between progressives and moderates.
For the White House, it marks a new challenge for a team that guided Biden’s first legislative effort through both chambers with minimal changes. The outreach has been ongoing for weeks, led by Steve Richetti, counselor to Biden, and Louisa Terrell, the legislative affairs chief. Ron Klain, the powerful chief of staff, has also been deeply involved, officials say. Congressional committees were briefed Tuesday by Terrell and National Economic Council Director Brian Deese.
But the private conversations are about to spill dramatically into the public sphere as the first phase of Biden’s plan becomes public.
The first part of the two-pronged package would include $2.25 trillion in direct spending, with an additional $400 billion in clean energy tax credits, according to a person with direct knowledge of the plan. That $2.25 trillion would include $650 billion for physical infrastructure, $300 billion for housing infrastructure, $300 billion for manufacturing, $300 billion for the electric grid and $400 billion for home caretakers and care for the elderly and disabled, a key piece of Biden’s campaign agenda.
Tensions lie between Democrats who want to pursue infrastructure more narrowly and those who view infrastructure as an opportunity to advance long-held Democratic priorities like paid family leave, raising taxes on corporations, lowering the eligibility age for Medicare and lowering the cost of prescription drugs.
But they don’t stop there.
The likely months-long process will also be fraught as Democrats work through how much of the infrastructure bill to pay for and what kinds of tax increases the caucus is willing to actually commit to as pressure is expected to mount in the business community against them. The person with direct knowledge of the plan said the White House sees the financing of the proposal through a 15-year window and the centerpiece for paying for the plan being bumping the corporate rate to 28%, up from 21%.
While the effort to pass the Covid relief bill went relatively smoothly, Democrats in both chambers acknowledged they were willing to overlook parts of the package they disagreed with in an effort to hand a new President his first big legislative win. The dynamics of quickly moving forward on emergency relief for a country grappling with a once-in-a-century pandemic also carried significant weight, lawmakers and aides said.
But members warn this effort will be harder for the White House and for their Democratic leadership.
“I think just because the first package went a certain way, they should not over-read into that,” one moderate Democrat told CNN on the condition of background to freely discuss the ongoing discussions. “it is going to be tough for us.”
Soon after the cost of Biden’s proposal was released, progressive were already arguing Tuesday night that it wasn’t enough.
“This is not nearly enough. The important context here is that it’s $2.25T spread out over 10 years,” tweeted Rep. Alexandria Ocasio-Cortez, a New York Democrat. “For context, the COVID package was $1.9T for this year *alone,* with some provisions lasting 2 years. Needs to be way bigger.”
Plan faces aggressive schedule with or without Republican support
The White House has outlined an ambitious timeline in which they hope to complete the infrastructure package by the end of the summer. But they also acknowledge that there will be significant work and changes likely to come from Democratic allies over the course of the next several months. Even if that falls into line, passage will require leaders to hold their narrow majorities together and not let the demands on either end of their caucus derail the overall bill.
“When they see the last train leaving, they all want to be on that train. There will be some of that,” one Senate Democratic aide told CNN.
Congressional Democrats are still divided over how large the package should be and how much of it should be paid for. Many were waiting for the White House to unveil their own plan before setting a metric of what they wanted to see. Aides say that caucus-wide discussions on the scope haven’t fully materialized even as committee chairs have been engaged for months with the White House over a possible path forward.
The House Ways and Means Committee, Senate Finance, House Transportation Committee and Budget Committees have been laying the groundwork for weeks, but in order to succeed, leadership will have to allow members to air their concerns once they return from the Easter recess, aides say.
Moderates, meanwhile, are also holding out hope that they can negotiate a proposal that would win Republican votes while leadership is already jumpstarting the process to use reconciliation, a budgetary tool that allows Democrats to pass a bill without a single Republican.
For Biden’s part, he plans to make public and private entreaties to Republicans in the weeks ahead, officials say. But they are also clear-eyed that GOP support will likely be difficult to secure – and don’t want that to stand in the way of a proposal they see as legitimately transformational for the US economy.
That, as much as anything else, is a driving force behind the effort to come. It’s an opportunity to secure major changes that past Democratic administrations considered out of reach. Biden, when he lays out the pieces of the proposal, will lean heavily on the idea that this is a moment to go big and address long-standing fragility across the US economy.
“I want to change the paradigm,” Biden said last week during his first press conference. “We start to reward work, not just wealth.”
‘Tip of the iceberg’: Divisions emerge over how to pay for the package
While the White House will roll out its sweeping proposal in two parts, no decisions have been made yet by Democrats on Capitol Hill about the process and sequencing, aides say.
Key committees are in constant communication with White House, but aides tell CNN that broader internal discussions have yet to occur yet on how this package needs to be structured.
The process is also on hold as Democratic aides to Majority Leader Chuck Schumer await word from the Senate’s parliamentarian on how many budget tools they have to use. Democrats are arguing they can go back and amend the budget tool used for the Covid relief package, giving them potentially more options. A ruling could come as soon as this week.
Democrats will also have to contend with differences over how and if to pay for any package. While Biden plans to propose paying for the entirety of the package over time, Democrats on Capitol Hill have sharp differences of perspective on the issue.
Rep. Pramila Jayapal, the chairwoman of the Progressive caucus, told reporters Tuesday that she didn’t believe any of the proposal should be paid for while other Democrats have argued that at least some of it needs to be.
“Some of it has to be paid for, I think,” said Sen. Jon Tester, a Democrat from Montana.
White House aides say Biden is aware that the dynamics of how much of the proposal will be paid for – and through what mechanism – will be the subject of significant debate in the coming weeks and months.
But underscoring just how many issues could pop up given the sheer scale of the proposals, a group of House Democrats is already threatening to vote against any bill if it doesn’t include a repeal of the cap on state and local deductions implemented by Republicans in 2017.
While most of the Democratic efforts to change the tax code in upcoming months will be aimed at bringing in revenues to offset the cost of the infrastructure package, a handful of Democrats in the House – including Rep. Josh Gottheimer of New Jersey and Rep. Tom Suozzi of New York – have drawn a red line that they won’t vote for an infrastructure bill that doesn’t repeal the $10,000 cap on state and local taxes.
Repealing the cap is controversial with some Democrats arguing it benefits wealthy taxpayers and others saying it disproportionately affected individuals in heavily taxed states like New York, Maryland, New Jersey and California.
“Tip of the iceberg,” one House Democrat, asked about the SALT cap, said of the number of looming issues likely to arise in the weeks ahead.
Democrats are also going to have to decide how to tackle prescription drug prices or whether to include the cost-reducing proposal in their infrastructure bill. There are several competing proposals, but the Congressional Budget Office estimates that the packages could save between $300 and $500 billion, a large chunk of money that could go toward offsetting the cost of the infrastructure plan. Budget Committee Chairman Bernie Sanders is also eying including a proposal that would lower the eligibility of Medicare recipients from 65 to 55 or 60.
“This is a whole different ball of wax from Covid relief,” one Democrat in contact with the White House said of the next major push. “They know that, but I still think it’s going to be a surprise when it becomes clear just how much work needs to be done to pull this together.”