Democrats’ pursuit of $3.5tn budget package complicates infrastructure win

Within minutes of passing a sweeping $1 trillion infrastructure package on Tuesday, the US Senate moved to the next order of business: an even bigger budget Bill with an estimated price tag of $3.5 trillion.

But the “two-track” strategy of pursuing a pair of landmark Bills creates the possibility that neither becomes law.

While the infrastructure package was hailed by President Joe Biden as a model of bipartisanship – 19 Senate Republicans voted for it – the budget plan is far more divisive. Not only are Republicans opposed to it, but some Democrats question the merits of such a huge Bill.

Just hours after the infrastructure win, Democratic leaders in the Senate pushed through the $3.5 trillion budget resolution in the small hours of Wednesday in a 50-49 partisan vote, with no Republican support.

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Nancy Pelosi, speaker of the Democratic-controlled House of Representatives, had vowed to not take up the infrastructure Bill until the Senate passed the budget. But when the Bills reach the House the road becomes much more bumpy.

Progressive Democrats there are insisting they will not back the infrastructure package without the much bigger budget resolution, which includes a range of spending programmes backed by Alexandria Ocasio-Cortez and her left-leaning allies.

More centrist House Democrats have raised concerns about the scale of the budget Bill, raising the prospect of internecine warfare once the two pieces of legislation reach the lower chamber – and risking the passage of both, given the narrow eight-vote majority Democrats enjoy in the House.

Two-track strategy

For his part, Chuck Schumer, the Democratic leader in the Senate, said he believed the strategy was working. "The two-track strategy is proceeding full steam ahead," he said on Tuesday. "The Senate is on track to finish both tracks – and deliver an outstanding result for the American people."

Biden appeared far more circumspect, telling reporters that more difficult congressional negotiations lay ahead. “Let’s be clear,” he said after Tuesday’s Senate vote on infrastructure. “The work is far from done.”

Biden’s assurances did little to assuage Republicans, who attacked Democrats for ploughing ahead with a partisan process minutes after celebrating a bipartisan victory.

"Today Americans are able to witness the best and the worst here in the United States Senate," said Lisa Murkowski, an Alaska Republican who frequently crosses the political aisle.

“The best: the Senate just passed, on a strong bipartisan basis, a historic infrastructure package,” she added. “The worst: the Senate immediately turned to a wholly partisan Bill, a budget resolution which proposes over $3.5 trillion in new spending which will result in tax hikes on Americans.”

Even some centrist Democrats have questioned the quick shift. Although both Kyrsten Sinema, the Arizona Democrat who brokered the infrastructure deal, and Joe Manchin, the closely-watched West Virginia Democrat, voted for the budget resolution early on Wednesday morning, both have questioned the wisdom of a $3.5 trillion price tag.

Quirk of rules

Biden on Tuesday described himself as a “congenital optimist”, telling reporters of the budget plan: “I think we will get enough Democrats to vote for it, and I think that the House will eventually put two Bills on my desk.”

The two separate approaches are a byproduct of a quirk in Senate rules. Normally, legislation cannot move through the chamber without a supermajority of 60 votes, which is needed to cut off debate on a Bill – the process used for the infrastructure Bill. But a process called reconciliation, aimed at getting budget Bills through the Senate more quickly, needs only a simple majority, which Democrats mustered on Wednesday morning, even without the need of a tiebreaking vice-presidential vote by Kamala Harris in the 50-50 upper house.

The budget resolution provides the blueprint of a budget that would spend trillions of dollars on a range of Biden’s priorities, including expanding universal schooling to three and four year olds; implementing clean energy tax credits; and expanding Medicare, the public health insurance system for older Americans, to provide dental, vision and hearing benefits. The spending would be offset, in part, by higher taxes on US corporations and wealthy Americans.

Business interests are concerned that Pelosi’s insistence on considering both Bills together could doom the bipartisan deal on infrastructure spending that they have backed for years. The Business Roundtable and other pro-business lobbying groups suggested the House – whose members are on summer recess – returned early to consider the infrastructure Bill.

But Steny Hoyer, the second-ranking House Democrat, said that while the House would come back from recess several weeks sooner than planned, on August 23th, it would first consider the Senate's budget resolution. – Copyright The Financial Times Limited 2021