Washington (CNN)President Joe Biden has entered a critical moment where the decisions he makes will dictate the success of his sweeping $4 trillion legislative agenda — and potentially his first term in office.
On its face, that may appear hyperbolic, just four months into Biden’s presidency.
But as he continues infrastructure negotiations with Senate Republicans on Friday, this moment is underscored by how interlocked each action Biden takes has become amid a convergence of policy, procedure, legislative logistics, sequencing and, of course, politics.
Biden can’t afford to ditch a process that is viewed as a necessity for moderate Democrats like Sen. Joe Manchin of West Virginia to support Biden’s broader agenda. He basically can’t be seen as walking away from the ongoing talks, or he risks imploding all his goals ahead. And that’s why his most recent proposal, made on Wednesday, was an important step — it intentionally avoided the primary GOP red line (changes to the 2017 tax law) and dropped Biden’s topline to roughly $1 trillion, a level some Republicans indicated would be a space for real talks.
All those factors together mean the White House is now facing a tense high-wire act as it weighs its next steps.
There is nothing simple or straightforward about this moment, despite what various interested parties may claim. Biden is weighing factors across the Democratic caucuses, Republican negotiators and his own team. His overarching priority hasn’t shifted: he wants to enact a sweeping economic agenda that would transform the scale of the federal government’s role in the US economy. But with the narrowest of congressional majorities, nothing can move forward until Democrats are aligned on next steps. And right now, they simply aren’t in the same place
Manchin to CNN’s Manu Raju: “I know everyone’s in a hurry right now. If anyone understands the process, it’s President Joe Biden. … We’ve got to bring our country together. We can’t continue to split and go further apart. We just can’t do that; we’ve got to work together. That takes a lot of time and energy and patience.”
What to watch
Biden and West Virginia Sen. Shelley Moore Capito, the lead Senate GOP negotiator, are scheduled to speak again by phone on Friday afternoon, a source familiar with the plan told CNN’s Kaitlan Collins, in what will be the latest round of the weeks-long back and forth. Capito and the members of the Senate GOP negotiating group spent the last 24 hours weighing how and whether to counter the proposal Biden laid out in the Oval Office this week. While there was strong consideration inside the group to increasing their topline offer, multiple GOP sources said anything put on the table would still remain far apart from where Biden sits. “There aren’t GOP votes for what he put on the table, and the White House knows that,” one GOP source told CNN.
What’s on the table
Biden, in his Oval Office meeting, outlined a proposal that sat at roughly $1 trillion in new spending (above the $400 billion baseline), financed in large part by major new efforts to crack down on tax evasion by the wealthy and corporations. He also proposed a minimum tax of 15% on large corporations that largely avoid federal taxes.
The GOP group proposed a $928 billion plan last week, but one that contained only $257 billion above the baseline (in other words, above the expected spending levels currently assumed for the future based on current policy). The proposal was largely financed by repurposing Covid relief funds.
Where the GOP stands
For Republicans, the topline has gone about as high as it can go with the blessing of rank-and-file members, according to multiple sources. Throughout this entire process, Capito hasn’t been operating as a free agent. Senate Minority Leader Mitch McConnell of Kentucky has been privy to the talks every step of the way, helping guide where he thinks the Republican conference can get to and still maintain support. The pay-for red line for Republicans has been clear from the start: no changes to the 2017 GOP tax law. How much to spend? That has been a place for negotiation in these talks. One thing guiding these discussions has been the fact that many Republicans are uncomfortable with any infrastructure spending going beyond $1 trillion. For some, even that’s too high.
When GOP Mississippi Sen. Roger Wicker told CNN that last week’s $928 billion offer was just about as high as Republicans could go, he meant it. He wasn’t saying it because a few members wouldn’t be willing to go higher, he said it because much more and they start to hemorrhage GOP votes.
That’s why you heard McConnell on Thursday signal loud and clear in Kentucky that he doesn’t know if Republicans and Biden can get there on a deal.
Here are the actual dynamics
To walk through the considerations Biden and his team face, based on conversations with multiple sources on both sides of Pennsylvania Avenue, here’s a rundown:
- Biden wants to enact his entire $4 trillion agenda, the vast majority of which will receive zero GOP support.
- The only way to move anything without GOP support in a 50-50 Senate is through the budget reconciliation process
- Manchin has made clear he’s not ready to move forward on that process. Without Manchin, there aren’t 50 votes for … anything.
- Also, and this in the weeds a bit, but there are several key infrastructure elements that likely can’t be done through reconciliation. Very important elements (think Highway Trust Fund transfers, larger/longer-term projects).
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