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June 28, 2021

What to Expect in Washington (June 28)

President Biden tried to put the roughly $1 trillion infrastructure deal he announced with a bipartisan Senate group June 24 back on track over the weekend, releasing a statement reversing his previous insistence that it move in tandem with a Democratic reconciliation bill expected to address issues like health care, caregiving, and climate change. The President's previous qualifying of support for the infrastructure bill with passage of a follow-on human infrastructure bill caught Republican Senate negotiators off guard and threatened to derail the deal. The weekend statement underscored the dynamic in Washington by which progressive Democrats want assurances from moderates they will support a follow-on bill of Democratic priorities with major tax increases, moderates are unwilling to do that without knowing the details, and some Republicans are willing to bet the other party can't get 50 of their members to back the same bill.

"At a press conference after announcing the bipartisan agreement, I indicated that I would refuse to sign the infrastructure bill if it was sent to me without my Families Plan and other priorities, including clean energy. That statement understandably upset some Republicans, who do not see the two plans as linked … " Pres. Biden said. "So to be clear: our bipartisan agreement does not preclude Republicans from attempting to defeat my Families Plan; likewise, they should have no objections to my devoted efforts to pass that Families Plan and other proposals in tandem. We will let the American people — and the Congress — decide. The bottom line is this: I gave my word to support the Infrastructure Plan, and that's what I intend to do."

The issue was front and center on Sunday political shows:

-"I was very glad to see the president clarify his remarks because it was inconsistent with everything that we had been told all along the way," Sen. Rob Portman (R-OH) told ABC's "This Week."

-On the same program, Senator Joe Manchin (D-WV) said, "We have two tracks. And that's exactly what I believe is going to happen. And we've worked on the one track. We're going to work on the second track. There's an awful lot of need."

-Senator Jon Tester (D-MT) said on Face the Nation, "I think we're also going to see bumps in the road as this goes forward through the process. You know every week there's probably going to be another problem that arises. We'll work through those problems just like we work through them in our gang of 10 folks."

-Senator Bill Cassidy (R-LA) said on Meet the Press, "First, we were assured that the two would not be linked. Yes, the human infrastructure, if you will, as they call it, would be pursued but the two would not be linked. Why is that important? First, there's bipartisan opposition to the non-hard infrastructure portion of their bill … Number two, Republicans think that portion is bad for our country."

-On the same program, Rep. Alexandria Ocasio-Cortez (D-NY) said, "Republicans are more than welcome to join, so that we can get this work on infrastructure done. But that doesn't mean that the president should be limited by Republicans, particularly when we have a House majority, we have 50 Democratic senators and we have the White House, and I believe that we can make sure that he's successful in executing a strong agenda for working families."

"Democratic progressives continue to trash the bipartisan deal as too skimpy, and insist that Mr. Biden make good on his promises of major new spending on climate, home health care and other needs, paid for by higher taxes on corporations and wealthy individuals," said an editorial in the Saturday Washington Post. "There is still plenty of time to sort through these issues. Everyone involved should keep talking, and stay focused on the big picture, which is that the bipartisan package would make substantial, much-needed investments in the economy's future productivity, paid for with at least some plausible up-front savings (such as $100 billion from enhanced tax enforcement)."

Tax — On the latter point, an editorial in the Saturday Wall Street Journal said "Audits of the rich have fallen in recent years, and more audits are bound to yield some additional revenue. Forty billion dollars will hire a lot more agents. But to get anywhere close to the $100 billion in the bipartisan spending deal, the IRS will have to audit nearly every high-income taxpayer in the country … Is this really what Republicans want their fingerprints on: Hugely expanding the size of the IRS so it can harass entrepreneurs and pass-through business owners who provide millions of jobs?"

A meeting between House Ways & Means Committee Chairman Richard Neal (D-MA), Senate Finance Chairman Ron Wyden (D-OR), Treasury Secretary Janet Yellen, and National Economic Council Director Brian Deese last week put the group on course to determine over the coming weeks what tax increase proposals can be included in the second bill. "We're going to build the plan, figure out what people want, what they're willing to pay for, but also not to be deterred," House Ways and Means Chairman Richard Neal (D-MA) said in the WSJ. "There's this moment, when we're talking about Great Society achievements and we're talking about New Deal achievements. This is it."

The story noted that while Chairman Wyden has been outspoken about working on tax issues aligned with the White House — which include international tax increases and clean energy incentives paid for in part by repealing fossil fuel provisions — Chairman Neal has been more cautious, and has neither rejected nor embraced the Administration's tax increases. "One of the things I have done with the committee members, I've encouraged them not to take, again, absolutist positions and not to volunteer revenue, until we see what the final architecture looks like," he said. "Then we're going to have to measure the appetite of those who want these initiatives as to what they're willing to vote for."

"If Republicans don't want to make adjustments to a tax code — which I think is weighted and unfair — then I'm willing to go reconciliation," Senator Manchin said Sunday.

Congress - The Senate is out of session for a two-week recess until July 12. The House is in session before a one-week recess the week of July 5. The House Ways & Means Oversight Subcommittee will hold a hearing on "Expanding Access to Higher Education and the Promise It Holds" on Tuesday, June 29 (2:00 p.m.)


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