GP Short Notes

GP Short Notes # 581, 3 October 2021

The US: After getting passed by the Senate, Biden's infrastructure bill is in trouble as the House D
D Suba Chandran

What happened?
On 1 October 2021, after meeting the Congress legislators over the voting of his ambitious and historic bill on infrastructure, Biden said: "It doesn't matter whether it's in six minutes, six days or six weeks, we're going to get it done." Biden has also asked the House to delay the voting until there is an agreement within. The bill aims to invest massively in the infrastructure – in terms of building and repairing roads, bridges and related infrastructural projects.

On 30 September, in a statement released by the White House, Jen Psaki, the Press Secretary, said: "While Democrats do have some differences, we share common goals of creating good union jobs, building a clean energy future, cutting taxes for working families and small businesses, helping to give those families breathing room on basic expenses—and doing it without adding to the deficit, by making those at the top pay their fair share." He also said: "A great deal of progress has been made this week, and we are closer to an agreement than ever. But we are not there yet, and so, we will need some additional time to finish the work…."

On 28 September, Rashida Tlaib, one of the Democrats who questions the bill tweeted: "Let me be clear: bringing the so-called bipartisan infrastructure plan to a vote without the #BuildBackBetter Act at the same time is a betrayal…We will hold the line and vote it down."

What is the background?
First, the ambitious infrastructure bill announced by Biden. In his words, it is "a historic investment in the nation's roads and highways, bridges and transit; in our drinking water systems; in broadband, clean energy, environmental clean-up; and making infrastructure more resilient and the climate crisis much more in our minds as to how do we deal with it." On 9 August, the Senate passed the USD 1.2 trillion package, with a 69-30 majority; this happened after a bipartisan debate that included 19 Republicans voting in favour of the bill. Following the vote by the Senate, the House was to vote this week; however, this could not happen due to differences within.

Second, the divide within the Democrats. While Biden could get the infrastructure bill passed in the Senate, he is facing a challenge in the House, primarily from his party – the Democrats. The party stands divided between the moderate and progressive sections. The progressives, questioning the bill (and Biden) within the Democrats, want a broader social safety net package. They would like to pass the Build Back Better Act, along with the infrastructure bill. According to a White House brief, "the Build Back Better Agenda is an ambitious plan to create jobs, cut taxes, and lower costs for working families – all paid for by making the tax code fairer and making the wealthiest and large corporations pay their fair share." While the infrastructure bill itself is ambitious, the other one is even more, with a budget of over USD 3.5 trillion. A section within the Democrats, including Biden, have decoupled the two and prioritized the infrastructure bill; this is the primary difference between the two groups. The larger difference between the two sections is over whether the focus should be primarily on building infrastructure or on social welfare. While the conservatives within the Democrats look at the former, the other section opposing the infrastructure bill see the larger bill and investment in infrastructure as a part of a strategy. While Biden would agree to both, he will have to calibrate the expenditure that comes with, and the numbers that he has in the Senate.

Third, Biden's recent troubles. The President has been engaged in firefighting since August, diverting his attention. Strong criticism and condemnations over the US exit from Afghanistan, treatment of migrants along the US-Mexico border (especially the Haitians), and the COVID numbers and recovery have placed Biden on a backfoot.

What does this mean?
The good thing over the recent differences within the Democrats on the infrastructure bill is Biden's statement and efforts to build consensus within before passing the same. The challenge for him is to reach there. The divide within the Democrats should be the single largest challenge for Biden – both within and outside. Despite the challenge, Biden is likely to reach a consensus.

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