CRMCA Members:

With the failure of the House to pass the Infrastructure Investment and Jobs Act (IIJA), here is a state of play on Washington and an explanation of what transpired last week.

Late Thursday evening, House Progressive Democrats were still holding out against the IIJA in order to force passage of the “as yet to be agreed or drafted” $3.5 trillion reconciliation social spending package. Last week, Senators Manchin and Sinema were publicly attacked by liberal groups for allegedly breaking a promise to assure movement of the IIJA and Reconciliation. Last Wednesday, Senator Manchin released a memorandum dated July 28^th and signed by both he and Majority Leader Charles Schumer. In it, Manchin clearly laid out his parameters to accept a Reconciliation package. It was a bombshell that damaged Schumer’s credibility for misleading the nation to thinking that the Democrats were close together when they never have been.

The press has been targeting Senators Manchin (D-WV) and Sinema (D-AZ) as the so-called obstacles to the effort for what liberal Democrats considered to be a popular policy proposal. But there are at least three other Democrat Senators who privately object to the huge Reconciliation proposal. However, when the $3.5 trillion proposal is explained to most voters, a majority of voters do not accept it.

Manchin Throws Down the Gauntlet…two months ago
In the memo, Manchin clearly stated his parameters for a Reconciliation deal. It further divided House and Senate Democrat leadership and angered the House Progressive caucus to the point many votes in support of the IIJA were pulled. Senate Majority Leader Schumer had signed a copy of the Manchin Memo and acknowledged two months previously what Manchin’s terms were…while not sharing this with any other Senators.

Manchin did agree to limited tax increases, but the real bombshells were in policy areas that are sacrosanct with the far left Progressive Members in the House. Manchin had several demands that have been consistent since his July commitment to Schumer.

They include:

• Protection of current Coal and Natural Gas policy.
• Fuel neutrality on all future legislation and regulation.
• Assurance that ALL policy related to climate change would be focused solely on the Committee on Energy and Natural Resources which he chairs.
• Means testing of ALL provision of new benefits under the proposed Reconciliation effort.
• And finally, a top line of $1.5 trillion in spending which must be paid for without budget gimmicks.

Manchin also declared yesterday that it did not make sense to embark on a host of expensive new programs when the current Medicare and Social Security programs will be insolvent in a few more years. This revelation and declaration have roiled the progressives in both the House and Senate, further stoking opposition to the bipartisan infrastructure package.

Biden Ignores His Own Talking Points
After Speaker Pelosi hit an impasse with Progressives led by Rep. Pramila Jayapal, Speaker Pelosi invited President Biden to speak to the Democrat Caucus in a closed session last Friday afternoon. We have received reports that his presentation was erratic and then to the surprise of many there, he fumbled the opportunity to save the IIJA, which was the whole purpose of his visit. Instead of a typical Presidential Caucus visit to the Capitol, Biden changed course and re-linked the IIJA with the Reconciliation package, only saying that they would have to settle for a smaller one, “maybe $2.1 trillion.”

Progressives admitted they might need to reduce the top line but refused outright to accept Manchin’s ceiling of $1.5 trillion with the energy protections for fossil fuels and the means-testing for increased benefits. We are back to square one because there is no Senate Reconciliation package nor an agreed-upon top line in spending, let alone policy, to forge an agreement.

McCarthy Threatens Republicans
House Republican Leader McCarthy has taken a strong stand against the IIJA, claiming it is tied to the $3.5 trillion social spendings and tax bill. He even threatened to remove any Members from Chairmanships or prestigious committee assignments if they voted to support the IIJA. That caused several likely Republican House Members to back away from support and commit to voting NO. After this pressure, perhaps only about 3 to 5 Republicans were likely to vote for the IIJA had it come to the floor with the large Reconciliation package still looming in the background.

As of this Friday, there was still significant objection led by the Democrat Progressive Caucus. As a bloc, they held together to seek passage of a $3.5 Trillion Reconciliation Social Spending package.

Aftershocks
There have been numerous reports of agreement on a framework for the Reconciliation effort, but the truth is that there is no framework because it all comes down to what Senators Manchin and Sinema will accept.

The White House and Democrats in Congress are attempting to define a framework for a Reconciliation package but it does not exist. Manchin rightly pointed out that current Medicare and Social Security may be insolvent in several years and he called it “fiscal insanity” to spend trillions on new programs.

The IIJA and the Reconciliation package (whatever that may be, if anything) are in limbo.

On a broader note, Senator Minority Leader McConnell has said for three months that Democrats would need to use a reconciliation measure to increase or suspend the Debt Limit. Senator Schumer denied that reconciliation could be used for Debt Limit, but last week, the Senate Parliamentarian Elizabeth McDonough ruled that it could be. In addition, McConnell sent President Biden a letter reminding him of this, and that President Biden and Democrats refused to help Republicans increase the Debt Limit three different times during the Bush Administration. With the clock running to a Debt Limit due date of October 18^th, Schumer now has little choice but to begin such a process.

The number one priority for Congress now is a Debt Limit increase. The bitter politics of the past nine months virtually assure that the Democrats will need to do this alone under reconciliation. The IIJA is in limbo, now again held hostage to the Progressive-driven social spending reconciliation effort. It is conceivable that a smaller package is agreed to, freeing the IIJA for passage, or that everything collapses. Without strong, clear Presidential leadership, these efforts will fail.

We will share more as we receive it. NRMCA/CRMCA will continue to advocate alongside our coalition partners and allied associations for the passage of the bipartisan infrastructure bill.