Parliamentarian changes Senate calculus for Biden agenda

The Senate parliamentarian’s ruling allowing Democrats to sidestep a GOP filibuster only one more time in 2021 is forcing Democratic lawmakers to rethink how they can advance President Biden’s agenda.

Democratic aides now say the $2.3 trillion infrastructure package will have to be even bigger since they have just one more opportunity before the 2022 election year to go it alone on major legislation.

“The bottom line is the next one is going to be bigger because you can’t divide it up,” said a Senate Democratic aide, referring to the remaining reconciliation package.

Democrats aren’t counting on passing another reconciliation package after April 1, 2022 — which they are entitled to do under the Senate rules — because it will be just months away from the crucial midterm elections and the political dynamic could be much different by then. 

“Everybody’s a different person in an election year,” the aide said. 

Senate Majority Leader Charles Schumer (D-N.Y.) thought as recently as April that he might be able to pass two more reconciliation bills this year — after the Senate used its first reconciliation vehicle to pass the $1.9 trillion American Rescue Plan in March.

Parliamentarian Elizabeth MacDonough indicated to Schumer’s staff in April that they would be able to create multiple reconciliation vehicles this year.

But in a more extensive ruling circulated in recent days, MacDonough clarified that reconciliation vehicles beyond the remaining one for 2021 would first require majority approval on the Senate Budget Committee, which is evenly split at 11 votes a piece for Democrats and Republicans.

As a result, Democrats have only one more chance this year to sidestep a filibuster, since there’s virtually no chance of a Republican on the committee voting with them.

Aides say there’s now more pressure on Biden to cut a deal with Senate Republicans on a scaled-down infrastructure package because that would allow for more spending in a reconciliation package with priorities that are unlikely to get GOP support.

Those include raising the corporate tax rate, repealing the cap on state and local tax deductions, tax breaks for clean energy and hundreds of billions of dollars for social programs ranging from expanded child care to long-term home care for the disabled and elderly.

Another reality dawning on Democratic aides and progressive activists is that with only one remaining reconciliation package available until April, passing this year’s might not happen until the fall. That would force the White House to reconsider its goal of passing an infrastructure bill before the end of the summer.

A second Senate Democratic aide said the prospect of not being able to move a reconciliation package until the fall or closer to the end of the year could put pressure on Biden to strike a bipartisan infrastructure deal before then.

“I think it does,” the aide said of the parliamentarian’s ruling putting pressure on Biden to reach an agreement with Republicans.

White House officials on Wednesday reportedly made a major concession to Sen. Shelley Moore Capito (W.Va.), the lead Republican negotiator on infrastructure, when they lowered their proposed spending target to $1 trillion and shifted away from their proposal to raise the corporate tax rate from 21 percent to 25 percent.

Instead, White House officials suggested a minimum effective tax rate of 15 percent for corporations that would otherwise pay almost nothing in taxes.

“I think it is more likely Biden will cut a deal on infrastructure just because he’s only going to have one reconciliation shot and there are other priorities where there’s no hope of getting Republican support that will be more important,” said Darrell West, director of governance studies at the Brookings Institution.

West says it’s a possibility that “hard” infrastructure priorities such as roads, bridges, public transit, rail, airports and expanded internet broadband access could be lumped into the same package but that it would make more sense to pass them separately.

“The bigger the bill, sometimes the harder it is to pass because any senator who objects to one provision may doom the entire package,” he said. “It’s going to be hard to keep the coalition together the bigger the package is and the more items are in there.” 

West predicted the “overall number” of the reconciliation package “is going to be in the trillions.” 

“That frightens voters and politically it becomes a more difficult challenge,” he added.

Now, many Democratic priorities will be competing for inclusion in this year’s remaining reconciliation package.

Sens. Sheldon Whitehouse (D-R.I.) and Brian Schatz (D-Hawaii) are pushing for an ambitious array of tax incentives and other provisions to combat climate change, while Sen. Elizabeth Warren (D-Mass.) wants to dramatically boost the funding Biden has proposed for child care. Sen. Bob Casey (D-Pa.) wants to ensure there will be $400 billion for long-term home care for the elderly and disabled.

Senate Budget Committee Chairman Bernie Sanders (I-Vt.), meanwhile, says he is focused on including language to expand Medicare and lower the cost of prescription drugs in the reconciliation package. 

Matt House, a Democratic strategist and former senior aide to Schumer, said the parliamentarian’s ruling will make it more “complicated” to pass a reconciliation package, but he doesn’t think it upends Biden’s negotiations with Capito on a scaled-down infrastructure package.

“It was always going to be the case that Democrats would give bipartisan negotiations a chance to either flourish or fail or move forward on their own, and I think that’s still the case in the wake of the parliamentarian’s ruling and it doesn’t affect that fundamental dynamic,” he said.

House said that while a reconciliation package may not move until the fall, it won’t significantly change how much time the administration and Senate Democrats will be willing to devote to infrastructure negotiations with Republicans.

“The dynamic that governs the length of time is more, ‘What is the level of Republican seriousness in the talks?’ Not just Shelley Moore Capito but Republican, because she’s not the center of gravity in her caucus,” he said.

“Step two may get a little bit more complicated because of the restrictions on reconciliation,” House said of the road ahead for Schumer and other Democrats once those talks fail, as many Senate Democrats expect. 

Robert Borosage, co-founder of Campaign for America’s Future, a progressive advocacy group, said Biden may feel more pressure now to strike a deal with Republicans, but he doubts Senate Republicans will agree to anything that can pass the House, where progressives wield more power.

He said the parliamentarian’s ruling would make it more likely that Biden strikes a bipartisan infrastructure deal “if you had 10 Republicans who would make a serious offer.” 

Borosage said the GOP counteroffers on infrastructure so far have been a “joke” because they’ve proposed spending only a fraction of what Biden wants in new money.

“Progressives were always for one big bill and then the parliamentarian made a ruling [in April] and so that allowed Biden to argue, ‘Let’s keep the bills separate, we can do them in different reconciliation [packages] when we prove we can’t get Republican support,” he added.

“It’s a huge change because we’re all the way down this rabbit hole of infrastructure negotiations.”