Despite Yesterday’s Vote, Infrastructure Bills Face a Long Slog
Author: Greg Valliere
July 29, 2021
COMMENTATORS THIS MORNING are applauding a bipartisan deal on infrastructure, but this measure faces weeks of wrangling over the details, with a huge second bill still far from guaranteed.
LAST NIGHT’S PROCEDURAL VOTE — allowing debate to continue on a $1 trillion bill for roads, bridges, clean water, transit, broadband, etc. — was expected before the August break. Here are our odds on what happens next:
1. Yesterday’s bill breaks down — 40% chance: It hasn’t been written, and the revenue-raising assumptions rely on some fuzzy math. Donald Trump, bitter that he couldn’t get an infrastructure bill passed, is ranting that this deal should be killed; and on the Democrats’ left there’s a sense that it doesn’t spend enough.
2. Yesterday’s deal passes — 60% chance: Mitch McConnell is on board for the compromise, and that’s a big deal. We think this deal will pass, maybe even before the summer recess begins a couple of weeks from now. The House will grudgingly go along, with one important caveat.
WHAT ABOUT THE NEXT BILL? This is where things will get complicated. Senate Majority Leader Chuck Schumer wants to pass yesterday’s deal AND a budget reconciliation procedure that could win passage of a $3.5 trillion spending package that would include more spending for health care, housing, free community college, an extension of the higher child tax credit, etc.
THE PELOSI FACTOR: Not much bipartisanship here — the House Speaker called Kevin McCarthy a “moron” yesterday, and pro-Trump Republicans are blaming her for the Jan. 6 riot. More importantly, Pelosi has a very slim Democratic majority, and there will be grumbling from the left, which wants a guarantee on the second bill. And several members from wealthy states are insisting on the restoration of the state and local tax break.
BOTTOM LINE: We’ve thought for months that something close to the first bill would become law, and we still think it will. The timing is uncertain. As for the huge second bill, the only way it will pass (via the 50-vote reconciliation process) is if the price tag gets a major haircut.
A SLIM-DOWNED SECOND BILL, not costing anywhere close to $3.5 trillion and not raising taxes too much, could persuade moderate Democrats Joe Manchin and Kyrsten Sinema to vote yes, but that won’t be determined until late this year.
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A MAJOR SURPRISE IN THE U.K: Highly recommended reading this morning — an article in the Washington Post that focuses on plummeting Covid cases in the U.K., defying predictions of a huge upswing this summer.
EXPERTS ARE DIVIDED on the reasons for the dramatic reduction of cases, but it’s possible that the U.K. has reached “population immunity,” according to an expert quoted in the article.
ANY SIGN OF IMPROVEMENT in new cases in the U.S. would be very good news for politicians, who are facing a strong push-back on new mask and vaccine mandates. Confusion over policy has suddenly made Gavin Newsome a very shaky favorite in California’s Sept. 14 recall vote.
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