President Joe Biden this week released his opening bid for an infrastructure overhaul, and now the White House and Democratic leaders face the arduous task of getting enough lawmakers on board to get a bill to his desk. They have little room or time for error.
The outline of the American Jobs Plan Biden unveiled March 31 would cost $2.2 trillion over eight years and partially pay for the new spending by raising taxes on corporations. The White House cast the plan as a jump-start badly needed after the economic devastation wreaked by the coronavirus pandemic.
"Put another way, we can't afford not to," Biden said.
Although infrastructure is typically considered a bipartisan issue, congressional Republicans already have dismissed Biden's plan. Senate Minority Leader Mitch McConnell told reporters on April 1 that the bill "is not going to get support from our side" because of its tax hikes and because it was too broad.
Democrats would also need to bring their ideologically diverse caucus together. Here are the biggest obstacles they'd have to overcome to pass a massive infrastructure bill.
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A race against time
House Speaker Nancy Pelosi told lawmakers privately that she wants the House to pass a bill before the Fourth of July, according to several reports. That's a speedy timeline given that the House is out until April 13 and various committees still have to write the legislation.
Taking into account all the breaks between now and Independence Day, lawmakers would have less than seven weeks on Capitol Hill, according to the congressional calendar.
And even if the bill clears the House by Pelosi's deadline it would still need to pass the Senate where it faces an even steeper climb. Plus, Senators are likely to make several changes to the House version of the legislation and it would be up to Pelosi and other Democratic leaders to bring the House on board again to support the final version when they're done.
The further into the year the bill gets pushed, the harder it'll be to pass. Presidents historically have a difficult time ushering support for major legislation during an election year, and Democrats would want to keep and expand their majorities in 2022.
"The White House wants to see an infrastructure bill pass this year, likely knowing it will be the last major piece of legislation the administration signs before the mid-terms, if not for the remainder of Biden's term," Henrietta Treyz, director of economic policy research at the Wall Street analysis firm Veda Partners, said in a note sent April 1.
Agreeing on what counts as infrastructure
Biden's plan focuses on fixing ailing roads, ports, bridges, and airports, as well as spending on green energy investments. It also includes other provisions not traditionally thought of as infrastructure policy, such as providing billions of dollars for climate research and caregiving.
But many Democrats want the bill to encompass other policy areas. In mid-April the president is expected to introduce a second proposal, which may cost just as much as the first one, to address "social infrastructure."
That piece, the American Families Plan, is expected to include measures that would lower drug prices, expand the Affordable Care Act, and authorize the federal government to pay the full cost of attending community college.
The White House and Democratic leaders have not said whether they want the two bills to pass separately or to be lumped into one. Either approach risks losing support within Democratic ranks.
A small number of Democrats can sink a bill
Sen. Joe Manchin of West Virginia, the most conservative Democrat in the Senate, has said he wants any infrastructure package to be bipartisan. But the bill is unlikely to get Republican support.
"This bill will not receive 10 Republican votes," Treyz wrote, referring to the number of GOP votes that would be needed to pass a bill if all Democrats in the Senate supported the infrastructure bill. "Full stop, no question — this bill is going to be partisan, whether it is paid for or not."
Democrats have only a small majority in Congress. If they get no Republicans onboard they can only afford to lose three votes in the House and zero in the Senate.
Progressives demand more
Progressives said this week that Biden's infrastructure plan was far too small. Rep. Alexandria Ocasio-Cortez, a Democrat of New York, said the $2.2 trillion plan was "not nearly enough." Progressives proposed spending $10 trillion on infrastructure.
Rep. Pramila Japal, a Democrat of Washington who chairs the Congressional Progressive Caucus, suggested adding more provisions for childcare, older adults, job training, and education. She also rejected the idea of breaking the package into pieces.
"Our preference is for a single, ambitious package that would include both physical infrastructure and care infrastructure," she said.
The Senate parliamentarian could overrule the process
Because Democrats are expected to pursue the infrastructure bill without Republicans, they'll need to use a process called budget reconciliation that allows the Senate to pass certain bills with a 51-vote majority rather than the 60-vote threshold typically needed to break a filibuster.
Democrats are limited in how many times they can use reconciliation per year, and they've already used it once to pass the $1.9 trillion American Rescue Plan Act in March. That left one more opportunity in 2021.
But Senate Majority Leader Chuck Schumer has been looking into a potential loophole that would trigger multiple reconciliation bills. That would give Democrats an opening to pass both infrastructure bills separately.
The decision over whether Democrats can pursue this strategy would fall to Elizabeth MacDonough, the Senate parliamentarian who acts as the nonpartisan arbiter of the upper chamber. She's expected to issue a ruling on it in the coming days.
Whichever way they go, Democrats risk losing crucial votes among their ranks. Centrists up for re-election in 2022 in vulnerable districts are likely to balk if Democratic leaders lump the two bills into one giant package. On the other hand, progressives will be difficult to bring on board if Democratic leaders choose to only pass the first bill and omit social and healthcare policies.
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The Senate parliamentarian could rule against parts of the bill
MacDonough and her assistants would also help guide senators on what policies are allowed or forbidden under reconciliation, as they did with the recently passed COVID relief package.
The procedure helps to fast-track legislation but the trade-off is that the policies allowed must follow strict and complex rules that MacDonough would have to help interpret. She would issue rulings through listening to arguments from both sides, researching precedents, and using long-standing rules.
Some policies Democrats might want to include under their infrastructure plan won't be able to pass because they'll break the rules. One rule says measures passed through reconciliation must pertain directly and significantly to the federal budget.
During the $1.9 trillion American Rescue Plan Act debate MacDonough ruled that the $15 minimum wage was forbidden under reconciliation.
Repealing a limit on state and local deductions
House Democrats from high-tax blue states have said they would not vote for the infrastructure bill unless it repeals a rule from the 2017 Republican tax law that limits state and local tax deductions for households to $10,000, the so-called SALT cap.
Pelosi has said she shares "their exuberance" about getting rid of the SALT cap. "Hopefully we can get it into the bill," she said.
The repeal would largely benefit the rich and cost the federal government $350 billion from 2022 to 2025, according to the Committee for a Responsible Federal Budget.
If it ends up getting included in the infrastructure bill, Republicans would be sure to pummel Democrats over the issue ahead of the 2022 midterms.
"Don't worry, coastal elites — House Democrats are demanding a special SALT carve-out that would cut taxes for wealthy people in blue states," McConnell said March 31, offering a glimpse into the GOP's attack plan.
The White House didn't include the proposal in the plan Biden presented on March 31 and White House Chief of Staff Ronald Klain indicated the money would need to be offset.
"I want to hear from them how they would pay for this tax deduction," Klain said in an April 1 interview with Politico Playbook of Democrats pushing for the SALT cap repeal.
The battle over tax hikes
Biden wants to raise the corporate tax rate from 21% to 28% to pay for the first portion of the infrastructure plan. That would generate about $1 trillion in a decade, according to the Wall Street analysis firm Veda Partners.
The corporate tax rate will still be lower than the 35% level it was before former President Donald Trump's 2017 tax cuts slashed it to its current rate.
Such a change would force Democrats to face off against powerful business groups that spend a significant amount of money on lobbying and helping elect industry-friendly lawmakers. Business interests, and congressional Republicans, argue that now would be the wrong time to raise taxes as businesses are still recovering from the pandemic's economic devastation.
The White House proposed the tax increase as a way to pay for a portion of the plan because some Senate Democrats, including Manchin and Sen. Jon Tester of Montana — as well as Sen. Angus King, a Maine Independent who caucuses with Democrats — have said the party shouldn't rely solely on deficit spending for the bill.
"What we are trying to do is strip away objections to this needed investment," Klain said in the Playbook interview.
The bill would also get rid of tax loopholes for intellectual property and end deductions when companies send their jobs to other countries.
A potential unfavorable CBO score
Biden said his tax plan would offset the cost of infrastructure over 15 years, but policymakers won't know whether the math adds up for sure until the nonpartisan Congressional Budget Office scores the bill.
Past scores have dramatically altered legislation. For instance, Democrats worked hard to keep the Affordable Care Act's score under $1 trillion over a decade. As a result, for years millions of people found health insurance unaffordable.
If CBO predicts that the tax revenue won't be as high as the White House is envisioning, Democrats could be forced to raise money elsewhere or to find cuts in other programs.
Treyz said in her note that she didn't think Democrats had enough votes to get the tax rate up to 28%, predicting instead that it would land closer to 23.59%. That would mean far less raised in revenue and could make deficit-wary Democrats skittish.
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