Infrastructure Bill Setbacks, Spending Package Reductions, and the Debt Ceiling

Infrastructure Bill:

October 2/4: Biden Throws In With Left, Leaving His Agenda in Doubt

President Biden's negotiating style largely boiled down to this: I'm with you.

Since the president claimed his party’s nomination last year, he has nurtured the fragile peace between his party’s fractious center and left by convincing both sides he is their ally. They responded to the pandemic by passing a sweeping stimulus package in the spring. Now, the two factions are at loggerheads - one flexing its power but as yet empty-handed, the other feeling betrayed, both claiming they have the president on their side - and the outcome of their battle over Mr. Biden's proposals could leave a lot at stake. 

September 30/October 1: House Delays Vote on Infrastructure Bill as Democrats Feud

President Biden’s trillion-dollar bipartisan infrastructure plan suffered a significant setback late Thursday night when House Democratic leaders, short of support amid a liberal revolt, put off a planned vote on a crucial plank of their domestic agenda. Butuch a deal appeared far off, and the delay was a blow to Mr. Biden and Democrats, who had spent days toiling to broker a deal between their party's factions and corral the votes needed to pass the infrastructure bill.

Conservative-leaning Democrats made it clear on Thursday that they could not support a package of that size as proposed. 

Senator Joe Manchin III of West Virginia told reporters that he wanted a bill that spent no more than $1.5 trillion, less than half the size of the package that Democrats envisioned in their budget blueprint. "I'm trying to make sure they understand that I'm at 1.5 trillion," Mr. Manchin told reporters late Thursday night, emerging from the office of Senator Chuck Schumer, Democrat of New York and the majority leader, where he had been meeting with White House officials.

On provisions to pay for the package, Mr. Manchin was more in line with other Democrats, backing several rollbacks of the Trump-era tax cut of 2017, including raising the corporate tax rate to 25 percent, up from 21 percent; setting a top individual income tax rate of 39.6 percent, up from 37 percent; and increasing the capital gains tax rate to 28 percent, another substantial boost. 

Democrats are trying to pass the package over united Republican opposition, meaning they cannot spare even one vote in the evenly divided Senate.

Spending Bill:

October 5: Democrats face tough choices on trimming spending package

Democrats face challenges in reducing the size of their wide-ranging social spending package, a task that will be necessary in order to get key centrists to support a bill. There are several ways that Democrats could go about cutting down the size of their plan, from shortening the duration of spending programs and excluding others to cutting back the availability of various priorities and making some less generous.

Economic policy experts say Democrats are likely to take more than one approach to trim the size of their spending package. Democrats adopted a budget resolution in August that aimed to facilitate a bill with $3.5 trillion in new spending. But reducing the size of the spending package through timing changes might not sit well with moderates, who may argue the timing changes obscure the true cost of the legislation.

At least some programs in the final spending package are likely to either be temporary or not begin for several years because Democrats' plans for a package with $3.5 trillion in spending and tax cuts included some short-lived provisions. Legislation approved by the House Ways and Means Committee last month would only extend much of the expanded child tax credit through 2025, and it would not start Medicare dental benefits until 2028. Another way Democrats might trim the package is to remove some of their spending and tax agenda items from the package.

September 28: Negotiations Between Biden, Democrats Intensify As $4 Trillion Agenda Hits Stalemate

Negotiations between the White House and top Democratic lawmakers intensified Tuesday as President Biden worked to save roughly $4 trillion in economic initiatives from setbacks within the democratic party. 

For Biden, the day of diplomacy sought to blunt a fast-worsening congressional stalemate: An upcoming House vote on a $1 trillion plan to improve the nation's infrastructure remains imperiled as Democrats clash over the size and scope of a second spending package.

Liberal-leaning House Democrats hope to spend as much as $3.5 trillion in that bill in a bid to remake federal healthcare, education, and climate laws, financed chiefly through tax increases.

The uncertainty later prompted Sen. Bernie Sanders, the leader of the chamber's Budget Committee and the chief architect of the $3.5 trillion spending plan, to encourage House Democrats to take a stand.

They still have a significant gap to bridge, since some liberal Democrats believe Sinema has told Biden she supports less than $2 trillion in total spending, according to three Democrats familiar with the matter who requested anonymity to describe the talks.

A White House official, who spoke on the condition of anonymity to describe the president's discussions, said Biden also has been in touch with progressives in recent days as part of a wide-ranging outreach campaign to pass his political agenda on Capitol Hill. Pelosi has projected political optimism, stressing on Tuesday that Democrats are "Making some good progress" at resolving their differences.

A group of Democrats led by House Majority Whip James E. Clyburn on Thursday, for example, stressed that the party needed to expand Medicaid as part of their upcoming package, hoping to stave off cuts in health-care provisions that count among the most expensive in the still-forming bill.

Debt Ceiling Updates: 

October 5: Democrats want McConnell's GOP to feel debt-ceiling pain

The White House and Democrats sought Monday to make Senate Minority Leader feel some political pain for the high-stakes poker game he is playing with Democrats over raising the debt ceiling. Weeks after McConnell telegraphed his strategy that Republicans will not lift a finger to extend the nation's borrowing limit, Democrats engaged in a choreographed effort to convince voters that the GOP leader would be responsible for a debt default.

If McConnell and Democrats are playing a high-stakes game of poker on the debt ceiling, many Republicans and a few Democrats see the GOP leader as holding the better cards and unlikely to fold. 

Senator Tim Kaine (D-VA.) encouraged his leadership to put debt-limit language in the budget resolution the Senate passed in August, which would have enabled Senate Democrats to move more quickly with a reconciliation bill to raise the debt limit without any GOP support.

At the core of the Republican political strategy is the calculation that the president bears ultimate responsibility for the health of the U.S. economy. They are betting that Biden will feel compelled to pressure Democrats in Congress to use the reconciliation process to raise the debt limit to avoid what both sides acknowledge would be a catastrophe for the financial markets if the U.S. defaults or comes close to defaulting on its debt.

October 4: Schumer sets up Wednesday vote to suspend debt ceiling

Senator Schumer, on Monday night, teed up a vote for Wednesday where he'll need 60 votes to break a filibuster and move forward with suspending the debt ceiling through December 2022.

Republicans have repeatedly signaled they have no intention of allowing a majority vote on the debt hike or helping them get the 60 votes needed to break a filibuster. Senate Minority Leader on Monday reiterated that it was up to Democrats to raise the debt ceiling.

Congress has until Oct. 18 to raise the debt ceiling or risk a historic debt default that would have substantial widespread economic consequences. 

Republicans have twice blocked Democrats from passing a debt ceiling suspension. The first time, Democrats tried to include it in a short-term government funding bill. McConnell then blocked an attempt by Schumer to bypass the 60-vote filibuster and sent up a simple majority vote on a stand-alone debt suspension bill. McConnell sent a letter to Biden on Monday urging him to get Schumer and the Speaker to agree to raise the debt ceiling on their own through reconciliation, a budget process that lets them bypass the filibuster.

Democratic leadership has so far ruled out putting reconciliation on the table, noting that Republicans could allow them to raise the debt ceiling with only their votes by not requiring 60 votes for a stand-alone debt ceiling bill.

For Fun: 

September 29: San Jose Becomes First City To Fund Low-Income Internet Access With Help Of Helium Crypto Mining

San Jose, California became the first city Wednesday to join a rapidly expanding ecosystem and use Helium’s blockchain-based incentive model to increase internet access for more than 1,300 low-income families.

The Details: These households will receive a $120 payment on a gift card to help pay for home broadband service.

The cryptocurrency mined by Helium nodes fund the pilot program.

Helium wireless hotspot token rewards will be used to pay for the grants for eligible residents.

The Context: For the 95,000-plus citizens lacking internet access in San José, this vision is both life-changing and timely, significantly as the digital divide has only increased during the global pandemic, according to the Helium blog post.

According to the report, Helium’s low-energy network is designed only for devices like sensors and trackers. As a result, it cannot handle connections from laptops and smartphones.

San Jose has deployed 20 Helium nodes around the city, and volunteers and small businesses operate them.

So, if someone shares the wireless connectivity with nearby devices, each node “mines” or earns Helium’s HNT reward tokens.