Republicans had made their own bet in striking the infrastructure deal with Democrats and the White House. They thought that by agreeing to a limited amount of new spending on projects that would benefit their constituents—everyone loves roads and bridges—they could appease moderate Democrats like Senators Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, peeling them away from Biden’s far more ambitious spending plans. Backing a small bill would give Republicans cover to oppose the rest of Biden’s agenda without being labeled as obstructionist. The ensuing failure of the bigger reconciliation package would anger and depress the Democrats’ progressive base, resulting in a political win for Republicans. That was the idea, at least. But Manchin and Sinema have confounded those plans by going along—at least so far—with Biden’s dual-track strategy, keeping alive the president’s hopes of enacting what would be the largest investment in government programs in decades. Neither has balked at the proposed $3.5 trillion price tag, which is itself a significant reduction of an initial offering from Senator Bernie Sanders of Vermont, who chairs the Budget Committee.
The infrastructure agreement has divided Republicans more than Democrats, exposing just how difficult it is to get the modern GOP to coalesce behind any fiscal plan not named “tax cuts.” Conservatives, already opposed to giving Biden even the smallest share of a legislative victory, have rallied against a proposal to pay for the infrastructure spending in part by beefing up the IRS so that it can collect more unpaid taxes from the wealthy and from businesses. (The Treasury Department has pegged the overall tax gap at $7 trillion over a decade, although neither party has proposed empowering the IRS to close it entirely.) This is the lowest of hanging fruit when it comes to tax policy: Rather than raise tax rates, the senators are proposing merely to have the government enforce existing tax laws more stringently. But it’s still too much for the right, which sees the IRS as a bureaucratic bogeyman. Under pressure from Republicans, the bipartisan group dropped the tax-enforcement plan and is struggling to find other acceptable pots of money to replace it.