The White House says President Biden is 'encouraged' by conversations with Democrats to save his agenda
04:16 - Source: CNN
CNN  — 

The White House and Democratic congressional leaders have announced a deal on a framework of a “menu of options” to finance an agreement that doesn’t currently exist on a package that doesn’t currently have a topline spending number that would require those financing options.

There’s also going to be committee consideration of a final package to massively expand the social safety net that doesn’t exist, with a topline figure that hasn’t been agreed upon, with a pretty clear signal that it won’t look remotely close to what a final agreement would represent.

Got all that?

The bottom line

On purely policy grounds, lawmakers ended this week largely in the same place it started. Moderates and progressive are entrenched in their positions. President Joe Biden’s agenda is hanging in the balance. The time window to make substantial progress is closing by the minute.

That, more than anything else, is exactly why the White House and Democratic leaders are making moves like the above, all as Biden’s top aides work intensively behind the scenes to narrow differences. In short: now is the time to try and jar things loose.

For clarity

In critical moments in legislative negotiations, there is action, there is momentum and then there is an effort to create the impression of momentum. Each can play an important role in leading to an eventual outcome, and they are not mutually exclusive.

But that doesn’t mean they carry equal weight in terms of progress.

That’s why it’s important to be clear that what transpired on Thursday was option No. 3. And that says more about the position the White House and congressional leaders are in than perhaps anything else that’s played out in the last few weeks.

That action on Thursday, in practice, wasn’t very substantive. But it’s a clear effort to kickstart a process that was, at least on the surface level, put into a different place after Biden’s involvement. That can work – movement begets action, which begets progress, which can be spurred toward agreement by deadlines, which have a way of focusing the mind on Capitol Hill. In short, it’s not a new, or meritless, strategy.

House Speaker Nancy Pelosi is telling her colleagues that she wants to bring the party’s massive bill to expand the social safety net to the House floor as soon as next week, a source who heard her remarks tells CNN’s Manu Raju.

Whether she does or not remains to be seen. But it’s a move clearly aimed at reassuring progressives the larger bill is moving ahead to sway them to get behind the $1.2 trillion infrastructure bill that is still scheduled to get a vote Monday.

It’s unclear what version of the bill Pelosi would bring up since she has promised she wouldn’t make members vote on a bill with a higher price tag than the Senate plans to consider. And negotiations with senators are far from resolved.

“I have promised Members that we would not have House Members vote for a bill with a higher topline than would be passed by the Senate,” Pelosi wrote in a letter this week.

But how lawmakers feel, or what leaders try to signal, does not a deal make. And the clock is ticking.

The message buried in the move

If nothing else, the “framework” announced on Thursday was a reminder of something that has been lost by a number of lawmakers, particularly those who have raised concerns about the path forward: Biden plans to pay for the spending and tax cuts in the bill, no matter the topline.

That has always been the case – it’s something White House officials have said for months is an issue Biden’s been insistent on (sometimes to the chagrin of how advisers who are aware of how complicated raising revenue can be in these moments). But the $3.5 trillion topline number has stuck publicly – somewhat ironically a number that diverges sharply from how Republicans netted out the topline “cost” of the 2017 tax cuts.

That has turned into a real problem for Democrats, with moderates making clear the plan needs to be substantially scaled back due to concerns over its scale and potential impact on inflation. The latter issue is something Biden’s economic team, both publicly and, officials say, in intensive private efforts with lawmakers, has sought to diffuse with data and walk-throughs of the package.

But the “menu” also serves as a reminder that there are options to finance the package as intended.

How it went over

Democratic leaders tried to display an air of calm. Pelosi, in her weekly press conference, repeated over and over again that her caucus was working diligently to pass the President’s entire agenda.

Senate Majority Leader Chuck Schumer announced abruptly that the “White House, House and Senate” had “reached an agreement on a framework” that would cover the cost of any potential deal that was brokered.

But how much will that deal cost? What exactly is included in the menu of options? The White House referred all questions to Schumer’s staff at the briefing. Democratic members were perplexed by what exactly had been settled when it came to controversial tax increases that have divided the rank-and-file up to this point.

Here are the key dates to watch:

  • Thursday: Government funding expires at midnight, which could trigger a shutdown.
  • Mid-October: The government reaches its borrowing limit, which could trigger a first-ever US default and a self-inflicted economic crisis if the US is unable to pay all its bills on time. It could delay federal payments, including Social Security checks and monthly child tax credit payments.

  • “Unclear what he is referring to,” an aide to Sen. Kyrsten Sinema, a key moderate from Arizona, texted CNN shortly after Schumer’s announcement. “We have seen nothing and not signed off on anything.”

    “Not from the meeting. Not sent around this morning. Not clear what the hell is going on,” one Democratic House member who participated in Biden’s marathon in-person meetings on Wednesday, texted CNN.

    “Do you have a copy of this deal?” one Democratic senator quipped.

    The White House framing

    “It builds on the President’s meetings he had yesterday with leadership, with moderates, with progressives to talk about the path forward in an effort to unify members of the Democratic Party and caucus around our shared objective of lowering costs for Americans and making the tax code more fair,” White House press secretary Jen Psaki told reporters.

    But she also laid out a key point: it’s just a step in the process.

    “It’s important to have those discussions with the range of important leaders – including Senator Sinema, Senator Manchin, a range of members – about what those menu of options of revenue raisers look like,” Psaki said. “That’s exactly the process that’s going to happen over the short term.”

    The reality

    The most important thing that happened Thursday wasn’t the “framework.” It was the meeting, according to a source familiar, between Biden’s lead negotiators and Senate moderates in the evening.

    The group was joined by Sen. Patty Murray, a Washington state Democrat who is the chairwoman of the Senate HELP committee and one of the most critical players in the talks given her role in crafting an array of the key planks of the proposal.

    Of note, many of those key planks are now at the center of areas moderates want to whittle down, or tweak structurally. That’s exactly why the meeting was so critical. This is the effect of Biden’s marathon meetings on Wednesday – the followup on issues raised, which is designed to narrow down and close out hurdles to a deal.

    Murray was joined by Steve Ricchetti and Louisa Terrell, Biden’s legislative point people, as well as National Economic Council Director Brian Deese and Susan Rice, who runs Biden’s Domestic Policy Council.

    That group will meet virtually with moderate House Democrats from the Blue Dog Coalition on Friday, the source said.

    But at least they’re moving on the economic package

    That’s the signal sent by the Budget Committee decision to schedule a mark up on the package, right?

    “Effectively, the markup is more procedural than substantive,” House Budget Committee Chairman John Yarmuth told CNN’s Manu Raju.

    Remember that thing about creating the impression of momentum?

    Here’s your daily reminder

    House Democratic leadership committed to a September 27 vote on the $1.2 trillion bipartisan infrastructure package. Progressives have threatened to sink that vote if the second, substantially larger economic and climate package isn’t ready to move as well. That package is nowhere near ready to move (and procedurally, quite literally could not in the Senate.)

    September 27 is three days away.

    And here’s your view from the White House

    Head down, keep pushing forward. It’s been the posture of Biden’s legislative operation for his entire time in office. So has the view that the stakes are simply too high – and the actual, tangible policy upside is too substantial – for things to fall apart.

    Along those lines – which Pelosi emphasized in her news conference – is that the key planks of the package itself, from paid leave, to universal pre-K, to free community college, to bolstering the Affordable Care Act, to extending the child tax credit, to the most substantial climate provisions in, well, probably ever, simply have to win the day for Democrats.

    It may take time, and it certainly will get even more complicated (and ugly) in the days ahead. But failure is not viewed as an option – or the likely outcome.

    So about that framework

    The two tax writing committees did have different approaches on the financing elements for any final agreement. The “framework” marked a melding of those two approaches – not as final pay-fors, but as a list of options that lawmakers can pick and choose from to cover the entirety of any final proposal.

    That’s not a small thing – key proposals endorsed by the White House or viewed as potential options in the Senate ended up on the cutting room floor. Key proposals viewed as controversial inside one or both Democratic caucuses were included.

    But it’s also not a big thing, necessarily.

    An agreement on a menu is fairly low-hanging fruit (Senate Finance Committee Chairman Ron Wyden, an Oregon Democrat, has basically had one ready for weeks) and it certainly doesn’t count as making the hardest and most consequential decisions that still very much loom large.

    A reminder that raising taxes is hard

    Wyden has steadily rolled out a menu of options that could be used to cover the cost of any reconciliation bill. Those plans have been out in the open for months. Even the House Ways and Means Committee’s tax plan has been out in the open for weeks now. The menu was never the problem. The issue isn’t that Democrats have been short on options. It’s that they’ve been short on consensus. That hasn’t changed.

    The list of taxes that Democrats are eying include raising the corporate rate, raising the rate on top earners, increasing the tax rate for capital gains on wealthy Americans, lowering the estate tax exemption, restructuring the way carried interest is paid and making massive changes to the international tax system. Those options are plentiful. The money is there to cover at least $3.5 trillion. But the consensus is not.

    Democrats have been presented with reams of polling that shows the tax proposals under consideration – targeting mostly corporations and the wealthy – have wide and deep support. But the political reflex, driven by past (and what White House officials repeat, ad nauseum, dated) debates still exists, particularly for frontline members.

    It’s also worth noting that moderate Sens. Sinema and Joe Manchin, or their frontline House counterparts, are just the tip of the iceberg here. Changing the way the US negotiates the price of prescription drugs is another major pay-for bringing in an estimated $700 billion for Democrats. But the votes aren’t there yet for it in the House and it’s not clear they’ll be there in the Senate either.

    There’s some other stuff going on, too

    A PSA: The government shuts down on at midnight on October 1. That’s one week from today.

    The House Democratic bill that funds the government – and suspends the debt ceiling – will be blocked by Senate Republicans on Monday.

    The Office of Management and Budget has already kicked into gear its standard shutdown planning protocol, reminding government agencies of the steps they should prepare to take.

    So what happens next?

    At the moment it appears both sides will wait for the House-passed bill to go down on the procedural vote before making any concrete moves.

    “Can’t happen, won’t happen,” one Senate Democrat told CNN of a government shutdown. After a pause and a chuckle, the senator added: “Unless we stumble into it, which I guess isn’t entirely out of the question.”

    Why the House Democrat bill is certain to go down

    Anything can happen in politics, but Democrats need 10 Republicans to advance their government funding/disaster aid/debt limit suspension bill. The clearest signal of its demise is this: The most likely senators to cross the aisle have made clear they aren’t really enjoying being squeezed here. A quick smattering of color from the minds of GOP lawmakers on this.

    • Sen. Lisa Murkowski of Alaska, a key moderate: “Debt limit is not as immediate as making sure that a the end of this fiscal year, we have a plan to keep the government open.”
    • Sen. Mitt Romney of Utah: Hard no.
    • Sen. John Kennedy of Louisiana, a state in desperate need of emergency disaster aid, who had previously been the only Republican open to a “yes” vote: “In terms of how I am going to vote? I said two days ago, I want to see the legislation. I am not real happy about the legislation.”
    • Sen. Susan Collins of Maine: Did not sign onto that letter last month from 46 Republicans saying she’d vote against a debt limit increase and hasn’t definitively said one way or another, but she has made clear she’d support the funding bill without the debt limit suspension. Read of that what you will.

    Why won’t Republicans lend the votes here?

    There are two big reasons. One is purely political, the other is about being fed up. The two aren’t mutually exclusive.

    1. If Democrats have to raise the debt ceiling by themselves, they have to write in their budget resolution exactly how much they are going to raise the debt ceiling by. It’s a politically fraught vote. We’ve said it before: it’s a vote Senate Minority Leader Mitch McConnell wouldn’t mind vulnerable Democrats taking.
    2. There is real, palpable frustration in GOP conference that Democrats are going ahead with their $3.5 trillion bill and that is going to undo many pieces of their 2017 tax law. Many Republicans view helping Democrats raise the debt ceiling as a favor they aren’t in the mood to do given the bad will here. Democrats can do it themselves and see above for why that process looks attractive to GOP leaders right now.

    Why that infuriates Democrats

    The debt ceiling accounts for spending already authorized, not prospective spending. Roughly 97% of the current debt was accrued before Biden took office. Approximately $8 trillion was added to the national debt during the Trump administration – a number that includes the sweeping tax law that added more than $2 trillion to the debt. Senate Democrats and Republicans joined together three times in Trump years to suspend the debt limit

    Bracing for next week

    Catch up on sleep. Hydrate. Carb load. Next week isn’t going to be for the weak, and here’s why:

    Monday: Pelosi promised moderates last month she would bring the bipartisan infrastructure bill to the floor. All indications are that is still happening, though key players on both sides of Pennsylvania Avenue have floated the possibility of delay even as they’ve been cagey publicly. If it does go forward as planned, the votes likely won’t be there given progressives’ threats this week.

    But, as we’ve laid out repeatedly, sometimes failure is the best motivator to whipping votes.

    Thursday: The government runs out of money at midnight. Democrats in the Senate still plan to vote on legislation early next week that would increase the debt limit and fund the government through early December. But that bill is expected to fail given Republicans’ objections to being part of the solution to increasing the debt limit. Once it fails, leadership will have to decide quickly whether to continue bringing that same doomed bill to the floor or quickly pivoting to a standalone, short-term government funding bill.

    In between: Negotiations, cajoling, arm-twisting, private meetings and no shortage of phone calls are going to play out. It’s quite possible that the bipartisan infrastructure bill collapses on the floor of the House on Monday. As we’ve said, this is just the first step. There is truly only one must-pass item next week, and its funding to keep the government open. Everything else? It can technically wait.