Biden Open to Options on Spending as Congress Takes Over

Source: By Nancy Cook, Laura Davison and Erik Wasson, Bloomberg • Posted: Monday, May 3, 2021

President Joe Biden’s $4 trillion vision of remaking the federal government’s role in the U.S. economy is now in the hands of Congress, where both parties see a higher chance of at least some compromise than for the administration’s pandemic-relief bill.

The president at this point is open to various possibilities to pass his proposals, including breaking them into multiple bills, according to a White House official speaking on condition of anonymity. While the “American Families Plan” that twins social spending with individual tax hikes is a non-starter for Republicans, parts of the infrastructure-focused “American Jobs Plan” have been embraced by the GOP.

Biden’s planning to host top congressional leaders from each party at the White House on May 12, something he didn’t do for the $1.9 trillion Covid-19 relief package that passed with no Republican support. Whether a bipartisan deal can be done on a portion of his plans may hinge on whether the GOP abandons the comprehensive obstructionist model it used against President Barack Obama.

Any bipartisan deal would likely be limited to spending items, with Republicans widely panning the tax increases the White House has pushed for companies and wealthy Americans. GOP members haven’t proposed any specific funding measures.

‘Discussion Time’

Meantime, Biden’s pressing ahead with a direct public appeal for his sweeping plans, featuring stops this week in Virginia and Louisiana after recent trips to Georgia and Pennsylvania.

“President Biden has been clear that he knows this is a negotiation, that he knows that negotiation requires compromise at some point, and that he wants to move this package forward in a bipartisan way — if that’s possible,” White House senior adviser Anita Dunn said Sunday on CNN’s “State of the Union.” “We are open to people’s ideas. This is discussion time and idea time for the White House.”

Biden’s staff has held over 415 phone calls or meetings with lawmakers, chiefs of staff and staff directors on Capitol Hill regarding the American Jobs Plan. They’ve hosted one meeting just for Republican lawmakers, and have done at least 24 briefings for both Democratic and Republican staff, according to a White House official.

relates to Biden Open to Options on Spending as Congress Takes Over

And on the American Families Plan — unveiled last week — the White House has so far done four Senate and House committee briefings, conducted by top White House policy aides.

Congressional Democrats have yet to land on a strategy on how to advance the plans, which will almost certainly require holding together progressives — who want even greater spending on low-income Americans — and moderates, who’ve expressed concern about outsized spending and steep planned tax hikes.

“They have a lot of big decisions coming up — like whether to use the fast-track provision called reconciliation to pass the bill,” said Jim Manley, a Democratic strategist who worked in the Senate for more than two decades, including a stint as an adviser to then-Majority Leader Harry Reid. If it’s a single giant bill, some items will need to be set aside, he said. “And whatever is dropped, I can assure you, progressives will not be happy.”

The White House has been able to control the process so far by framing Biden’s priorities as universally urgent, but that ability wanes as Congress becomes more involved and anxiety sets in about the potential tax increases.

The strengthening U.S. economic recovery poses another dynamic that could make it tougher to argue for trillions of dollars more in spending — something Republicans are sure to highlight. Friday’s monthly jobs report is forecast to show a 980,000 increase in jobs for April.

Key Officials

Leading the behind-the-scenes outreach to Capitol Hill is counselor to the president Steve Ricchetti, and director of legislative affairs Louisa Terrell, both of whom have worked for Biden for years. The White House is staying in close touch with both Republican and Democratic lawmakers on a potential bipartisan infrastructure package that would cover certain items in the president’s $2.25 trillion jobs plan. It’s also engaging on the proposed tax hikes, health-care agenda, and expanded benefits for children.

Biden is deeply involved in the legislative strategy and is wooing lawmakers directly. Aides who’ve worked with Biden highlight his attention to individual legislators’ personal politics and what motivates them.

In addition to the outreach to Capitol Hill, Cabinet members including Commerce Secretary Gina Raimondo, Labor Secretary Marty Walsh, and top economic aides have called the leaders of business groups and corporate executives to talk through Biden’s proposals, including the tax hikes.

Even when executives have disagreed with the administration’s ideas, they’ve called the discussions substantive, informative and less frenetic than seen with the Trump White House.

Underscoring the fluidity of the final components of any legislation, support isn’t universal for each individual item Biden has proposed, even inside the West Wing of the White House, with various parts having different champions.

Biden has long wanted to do an infrastructure package and feels most strongly about that piece, said one ally. The president repeated his call for ramped-up spending on transportation Friday in a stop in Philadelphia to mark Amtrak’s half-century in passenger rail.

Some of the most vocal supporters of the American Families Package are Susan Rice, director of the Domestic Policy Council, and Heather Boushey, a member of the Council of Economic Advisers.

One White House adviser said the order in which the administration unveiled the packages speaks to its priorities, with the infrastructure-focused American Jobs Plan out weeks earlier.

The White House is negotiating directly with a handful of Republicans who’ve proposed a $568 billion package focused on transportation infrastructure, a fraction of Biden’s $2.25 billion plan that includes wide-ranging priorities from climate change prevention to elder care.

Biden Infrastructure Plan

relates to Biden Open to Options on Spending as Congress Takes Over

“We’ve assumed all along that the only thing we were going to get from them” in terms of cooperation “was core infrastructure,” said John Thune, the No. 2 Senate Republican. “I think there are enough Republicans and enough Democrats probably to pass something like that.”

But Thune warned that any effort to muscle social-spending items that are a non-starter for the GOP into a fast-track, budget-reconciliation bill that relies only on Democrats could complicate prospects for a compromise on infrastructure. “That may affect people’s assessment of the political dynamic of all this,” he said.

Meantime, members of the Democratic caucus, including Senators Bernie Sanders and Bob Casey, are already saying it’s time to deploy the reconciliation tool. Others argue that moderates won’t accept that approach until a serious attempt is made to craft a bipartisan bill that can get 60 votes in the 100-member Senate.

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Also yet unclear is whether Democratic leadership can proceed with more than one additional reconciliation bill this year, after having used that vehicle for the March Covid-19 package. The Senate parliamentarian hasn’t spelled out the details on what might be allowed. An unfavorable ruling in coming days could shrink the window for bipartisan talks, with Democrats instead moving to intra-party negotiations over the scope of a single giant package.

House Speaker Nancy Pelosi still aims to pass the American Jobs Plan by July 4, though that timetable may slip, according to a Democratic aide. She’s yet to lay out a timeline for the Families Plan.

Wall Street analysts have generally laid out scenarios, rather than hard forecasts, for what might come.

“At this early stage, it is too speculative to propose a baseline,” Barclays Plc analysts led by Shawn Golhar wrote in a note last week.

— With assistance by Billy House, and Laura Litvan

(Updates job estimate in paragraph above ‘Key Officials’ subheadline.)