Another last-minute skirmish involved a problematic provision in the base bill over how cryptocurrency would be handled by the IRS, and who would be on the hook for taxes. Negotiations between the White House and battling bipartisan groups in the Senate finally resulted in a compromise Monday. It was offered up by unanimous consent, an agreement by senators that they would pass it without a roll call vote, and it was denied unanimous consent. Republican Sen. Richard Shelby said he would allow it—provided he could blow up the entire deal by including $50 billion in defense spending in the bill. Because bipartisanship now rules in the Senate.
The bill is paid for with some dubious measures and suppositions, the higher taxes on the rich and corporations Biden wanted to use rejected by Republicans. They’ve pegged $205 billion in so far unspent COVID money, which hopefully won’t be necessary in the event all the unvaccinated people trigger yet another deadly variant that doesn’t respond to the current vaccines. It also takes about $53 billion that was earmarked for emergency unemployment insurance for the states.
Other more or less concrete funding sources agreed to include: auctioning of 5G spectrum for $87 billion; restarting a tax on chemical manufacturers that had expired nearly 30 years ago for $13 billion; and selling $6 billion worth of oil from the strategic reserve. They’ll postpone a Medicare rule that hasn’t been implemented yet and call it savings. That’s about $49 billion. They have agreed that the IRS can strengthen enforcement on cryptocurrencies—though not on rich people and corporations—and decided that will raise $28 billion. Then there’s the gimmick of dynamic scoring, in which they’ve determined that economic growth will kick in $56 billion.
After the Senate votes on the bipartisan bill, it will pivot to the budget resolution that will include reconciliation instructions for Biden’s larger American Families Plan, with some of the spill over form the jobs plan that were jettisoned from the bipartisan bill. The second bill can pass with just Democrats, it is not subject to the filibuster. It’s a potentially transformative and hugely ambitious proposal that can make a profound difference in millions of lives. And hopefully tax the rich and corporations.
With budget resolutions comes a vote-a-rama in the Senate. We’ve already seen one of those this year, back in March on the American Rescue Plan, the massive COVID-19 relief bill. Given that the Senate is already eating into their scheduled August break, there might not be a tremendous hunger in either side to prolong this process with hundreds of amendments. Then there’s Rand Paul and Ted Cruz, so you never know.
The House is not going to take up the infrastructure bill until they return in September, and probably not even then. Speaker Nancy Pelosi is so far sticking by her pledge to wait to pass that bill until the budget reconciliation is done, to ensure that the much larger bill will also pass. There’s also a concerted push by some House Democrats to negotiate with the Senate and have elements of the transportation bill they already passed included.
The House bill is much stronger in addressing climate change; it provides a much more balanced approach, investing in transit and pedestrian safety, bike lanes, and non-car options for low-income communities. Unfortunately, the White House is unlikely to support a House–Senate conference on the infrastructure bill it invested so much time and energy into creating.