Do or die? With both sides far apart, Pelosi tells House Dems it's "freeze the design day" on reconciliation bill

AP Photo/J. Scott Applewhite, File

Biden leaves tomorrow for the G20 in Rome so he won’t have as much time this weekend to participate in negotiations. That’s bad news for Terry McAuliffe and Democrats in Virginia, who are desperate for the bipartisan infrastructure bill to pass before Election Day next Tuesday. If House progressives mean what they say, that bill’s not passing until the Senate comes up with *something* on the reconciliation legislation that’s been percolating for more than a month.

Which means the pressure is on to make a deal … today, before Biden departs.

Is that likely? And, per last night’s post, what would amount to a “deal” that satisfies House lefties? Will they accept a “framework” agreed to by all sides or will nothing short of legislative language do?

Pelosi met with her caucus this morning and told them it’s “freeze the design day,” which I take it is Pelosi-speak for Dems needing to settle on a framework within the next 24 hours. “BIF” here refers to the bipartisan infrastructure bill that’s been dying on the vine in the House. “Build Back Better” is what Dems are calling the reconciliation package:

What she said was ambiguous, no doubt deliberately so. As a sop to progressives, she reiterated that the House needs “the trust, the confidence and the reality” of a reconciliation package, but what would qualify as “reality”? A framework that lefties, Manchinema, and Joe Biden have all publicly signed off on, locking them into the terms of a bill that’s yet to be drafted? Or the bill itself, as Pramila Jayapal and the Squad keep insisting?

Maybe it doesn’t matter. According to both Punchbowl and Politico, Pelosi is BSing her members in claiming that Dems are in “pretty good shape” with respect to an agreement. Dem Rep. Brendan Boyle was more truthful when he told reporters with a dollop of sarcasm, “We are just missing two things: What exactly is going to be in the bill and how we’re going to pay for it? Other than that, we are good to go.” He’s not exaggerating. Punchbowl identifies lingering Dem disagreements over everything from the Medicare and Medicaid expansions sought by progressives to pay-fors like the billionaire tax proposed by Ron Wyden. The provisions on paid family leave, which initially called for 12 weeks before being whittled down to four, may end up being dropped from the bill entirely to the consternation of lefties.

Does this sound like a party on the brink of an agreement that would “freeze the design”?

Because this is being done via reconciliation, the package needs to be deficit-neutral. That means every program that remains in the framework needs to be paid for with a new source of revenue. Which is another major problem for reaching an agreement:

The billionaire tax would tax the appreciation of assets held by the richest of the rich whether or not those assets were sold, a departure from capital-gains rules that gains need to be realized before they’re taxable. Manchin doesn’t like that “mark to market” idea. Instead he said he’s open to something called a 15 percent “patriotic tax,” which I assume would be an extra capital-gains surcharge on the very rich. That would provide some revenue but not as much as the billionaire tax, which was expected to bring in $250 billion over 10 years. How do Dems make up that shortfall, by cutting more programs from the bill or by imposing some other type of tax? If they opt for raising taxes, how do they get to 50 votes on that considering Sinema doesn’t want to do it?

All sides seem to be agreed on a 15 percent corporate minimum tax so that’ll end up as part of the final “design.” But that’s not enough to pay for all of the things progressives want. “There’s just huge pieces of this that are not nailed down. So each time I hear ‘Well, it’s almost done,’ I don’t know what the hell people are talking about,” Sen. Jeff Merkley told NBC last night.

Meanwhile, the clock is ticking. Pelosi is staying positive if only to avert “Dems in disarray” headlines a while longer but it’s revealing that she won’t commit to a vote this week on the bipartisan bill, a sign that her faith that a deal will come together soon on reconciliation isn’t strong.

“You’ll understand when you understand”? And now she wants legislative text instead of a mere agreed-upon “framework” for reconciliation? Maybe Jayapal and the Squad convinced her that they’re not going to bend and vote yes on the bipartisan bill without something more than just a mere “framework.” In that case, Senate Dems had better get cracking on cobbling together some legislative language if they want to save McAuliffe’s bacon before Tuesday. All they need to make it happen is, uh, some sort of agreement from the parties on what the legislation should say.

Of course, if they can’t reach a deal before then, Biden could always plead with House progressives to pass the bipartisan bill anyway in order to help McAuliffe in Virginia. But the White House apparently thinks that would be “foolhardy,” per Punchbowl.

There’s one more wrinkle. Even if they agree to a framework before the day is out, which Manchin believes is possible, will that open a new can of worms?

Progressives are already grumpy and demoralized that their dream of a $3.5 trillion Great-Society-style blockbuster has been pared back to a $1.5 trillion bill which seems to be shedding key parts of the left’s agenda on an hourly basis. It’s possible that the timetable will force the leadership and Manchinema to agree to a *broad* framework today in hopes that progs will find that acceptable and agree to pass the bipartisan bill immediately. But I wouldn’t count on it. If lefties are already inclined to view the “skinny” reconciliation package as a snow job, they’re incentivized to pick apart a vague framework as unacceptably opaque and a sneaky way to try to get them to commit publicly to a deal whose specifics will prove to be underwhelming. I think Biden and Pelosi and especially McAuliffe are in real trouble.

I’ll leave you with this.

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