Infrastructure Update: No Deal (American Jobs Plan)

I personally think it’s disingenuous for people to call this “fourth stimulus” because it’s not.  There is no fourth stimulus check involved in what Biden and mainstream Dems and the Republican counters, it’s not there, probably the thing most like a stimulus check is the extension of the expanded Child Tax Credit, but again that’s only for parents, it’s not a broadly-targeted stimulus check like the twelve hundred or the six hundred or the fourteen hundred

This week talks basically broke down between President Biden and a group of Senator Republicans led by West Virginia Senator Shelley Moore Capito, they had been trying to reach a bipartisan agreement on infrastructure but eventually the two sides were just too far apart and the negotiations ended without an agreement.

Some of you may have already seen this story, it was reported by CNN, the New York Times, Bloomberg, et cetera, and there were signs that this might be coming last week when White House Press Secretary Jen Psaki gave a statement saying that Senator Capito wasn’t doing enough to meet in the middle and meet Biden’s core objectives for the legislation. 

And Psaki released another statement on June 8th indicating that the negotiations were breaking down, it says, “The President has spoken to a number of members of the House and Senate the past two days. He informed Senator Capito today that the latest offer from her group did not, in his view, meet the essential needs of our country to restore our roads and bridges, prepare us for our clean energy future, and create jobs. He offered his gratitude to her for her efforts and good faith conversations, but expressed his disappointment that, while he was willing to reduce his plan by more than one trillion dollars, the Republican group had increased their proposed new investments by only one hundred and fifty billion dollars.”

So in their view the problem was that the Republicans weren’t willing to compromise, of course Senator Capito has a different perspective on what happened, but I’ll get to that in a minute. One thing that stood out to me about this statement is that Psaki goes on to say “The President also spoke with Senate Majority Leader Schumer to discuss the need to commence work on the budget resolution process so that legislation to advance the President’s economic priorities and tax reform plans could move to the Senate floor in July.

The President is committed to moving his economic legislation through Congress this summer, and is pursuing multiple paths to get this done.” Remember the budget resolution or reconciliation process allows them to pass legislation in the Senate with just a simple majority, so if they go that route then they won’t need a single Republican vote.

Obviously we’ve heard a lot from the Biden administration about how they want everything to be bipartisan, they want to get back to good faith negotiations, but ultimately there wasn’t much bipartisanship in Washington even before Trump was elected, and whatever was left in 2015 or 2016 has been gone for a while.

And I think that part of the statement is an early indication that Biden is starting to lose patience with the Republicans, he’s not necessarily going to shut them out entirely, but he’s willing to move ahead with this legislation on party lines and put pressure on Republicans to come up with a better offer if they want a seat at the table. 

As I said that statement gives you the White House version of events, of course it’s not as simple as saying that Biden was willing to compromise and Capito wasn’t, and she hit back on June 9th, she told Fox News that “in the end we never got to the scope of what infrastructure is. The President still had in his plan extraneous items we felt that were not exactly physical infrastructure.”

So the White House is pushing for this infrastructure package that includes childcare, home care, community college, et cetera, and the Republicans are still holding strong to the idea that any infrastructure legislation needs to be focused on conventional infrastructure projects, things like bridges, roads, rail lines, et cetera that only make up a small percentage of the overall price tag.

She also claimed that the administration wasn’t clear about its own priorities, she said “They kept moving the goalposts on us. Originally, they said one trillion [dollars] and they said we could write it to eight years, and we could include the baseline, which as you know is spending that we spend every year on infrastructure, which is critical. Then they said no, no we didn’t really mean that so it became confusing….I think the American people lose because they want to see us work together. Not to mention what happens to our infrastructure if we don’t get a more robust effort here when we have the opportunity to do it.”

So unsurprisingly we have both sides explaining that the problem was the other side, and now we’re back to where we were a month ago with no bipartisan deal and no clear plan for how they’re going to get this through the Senate.  One interesting thing that came out of this failed negotiation was a new proposal from the House Problem Solvers Caucus.

If you’re not familiar with the House Problem Solvers it’s essentially a bipartisan group of 28 Republicans and 28 Democrats, mostly from the moderate wing of each party, and their goal is to kind of break through the partisanship and find ways to pass legislation that both sides can sell to the rest of their party.

Their plan calls for $1.25 trillion in new spending over eight years, that puts it somewhere in the middle of where the two sides were at during the recent negotiations, and this could be something that kind of bridges the gap and maybe picks up enough votes to get through the Senate.

Now I’m not totally convinced that they’ll be able to get any real support for this plan, yes it appeals to the moderates in the Problem Solvers Caucus, but that price tag is going to turn a lot of Republicans away, and at the same time their proposal is pretty narrowly focused on what Capito called “physical infrastructure,” which has been a sticking point for the administration since they want the infrastructure projects to be packaged with child care, elder care, community college, and the other social programs that were in the original $2.2 trillion proposal.

And on top of that Biden is also pushing for some tax increases which are not represented in the Problem Solvers proposal. Unfortunately at this point I don’t think the White House is going to get either of those things in any bipartisan deal, so ultimately they’re going to have to decide whether they want to give up that side of the bill and accept something like what the Problem Solvers came up with, or whether they just want to pivot to reconciliation and keep the negotiations within the Democratic party.

Now there are a lot of Democrats, particularly progressives, who see the entire negotiation as a waste of time, they don’t think the Republicans are going to move on those key issues, and they would rather get started on reconciliation now rather than looking for common ground that isn’t really there.

AOC tweeted about this on Wednesday, she said “Pres[ident] Biden and Senate Dems should take a step back and ask themselves if playing patty-cake with GOP Senators is really worth the dismantling of people’s voting rights, setting the planet on fire, allowing massive corporations and the wealthy to not pay their fair share of taxes, etc.,” and she followed that with another tweet a few hours later which read “During the Obama admin[istration], folks thought we’d have a 60 Dem majority for a while. It lasted four months. Dems are burning precious time and impact negotiations with [the] GOP who won’t even vote for a Jan[uary] 6th commission. McConnell’s plan is to run out the clock. It’s a hustle. We need to move now.”

Now I know some of you might not agree with AOC in terms of policy but she’s right on this specific point, the White House has been taking all this time to build bipartisan legislation, OK bipartisanship sounds great in theory, but remember they put out their first proposal for this bill at the end of March, that means they’ve taken two months to negotiate and they don’t have anything to show for it. So personally I think it’s time for them to get a little more aggressive with infrastructure, try to push this through the Senate, start going through the reconciliation process, and let Republicans decide how they want to approach that instead of giving them all this time with no clear prospects for a deal.

I will be keeping a close eye on this story, it’s going to be interesting to see how the administration approaches this impasse, and it wouldn’t surprise me if they move to reconciliation sometime in the next few weeks.

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