The Brownstein Tax Policy Team is currently combing through the 1,600-plus pages of budget reconciliation text released last week. Below is a truncated version of Taxation & Representation that provides the latest on the debate over the two bills dominating Capitol Hill: The Build Back Better Act and the Infrastructure Investment and Jobs Act. As always, please contact a member of the Brownstein Tax Policy Team for additional insights.

Negotiations State-of-Play

The outlook for President Joe Biden’s legislative agenda looks brighter now than it has in recent months. Just like the scope of the bill, the gulf between progressive and moderate Democrats is narrowing, and the two factions appear to have begun coalescing around a final agreement for the budget reconciliation measure, the Build Back Better (BBB) Act. Movement on that bill would unlock its bipartisan infrastructure counterpart, the Infrastructure Investment and Jobs Act (IIJA), allowing each to receive votes on the House floor.

Multiple developments occurred last week that brought BBB closer to the finish line. First, on Thursday, President Joe Biden proposed a framework agreement that contained $1.75 trillion in topline spending and $1.995 trillion in spending offsets. That afternoon, lawmakers released portions of the legislative text before the House Rules Committee held a five-hour hearing the same day. Finally, that evening, after refusing to allow a vote earlier in the day, the Congressional Progressive Caucus—which had prevented passage of the IIJA until they were satisfied with the BBB—issued a press release announcing it had “overwhelmingly voted to endorse, in principle, the entire Build Back Better Act framework.”

Heading into the weekend, there was optimism that both bills would move forward this week.

That momentum, however, has stalled. Sen. Joe Manchin (D-WV) held a press conference and urged Democrats to slow down, saying the full economic effects of the bill should be completely understood before Congress moves forward. Manchin indicated he would like to review official cost estimates like those issued by the Congressional Budget Office (CBO) and the Joint Committee on Taxation before holding a vote.

These concerns have since been echoed by some moderate Democrats, suggesting further movement in the House could stall until the estimates are released. According to House Budget Committee Chair John Yarmuth (D-KY), the CBO process could take up to two weeks. Therefore, with the legislative text only partially complete as of this writing, if the House votes this week, it will have to pass the BBB without an official score.

Movement has thus again slowed down as lawmakers and congressional staffers seek to finalize other portions of the legislative text and reach agreement on other outstanding policy issues. As of this afternoon, those outstanding issues, according to Speaker Nancy Pelosi (D-CA), include climate change, prescription drugs and immigration. It is unclear how quickly these issues can be resolved, but Pelosi has remained optimistic throughout this process, telling members full agreement could possibly be reached today.

Looking Ahead

During the House Rules Committee hearing, Democratic chairs testified that they would likely not reconvene their respective committees to make further amendments in light of the proposed changes to the BBB. Below are the expected steps necessary for the BBB to move through the House:

• Finalize Text. Lawmakers are rushing to finalize legislative text, something Pelosi believes could happen as soon as today.
• House Rules. Once text is complete, it will head to the House Rules Committee, which will prepare floor consideration.
• Floor Vote. Democrats are aiming to approve the BBB this week. If the bill is considered by the House Rules Committee on Wednesday, Pelosi anticipates a floor vote as soon as Thursday.

Congressional Democrats are optimistic they will be able to advance both bills this week. House Majority Leader Steny Hoyer (D-MD), for example, said today the House is “going to pass both bills. I’m hopeful this week that we get the differences that are still outstanding resolved and pass both these bills.”

Once approved by the House, the measure will head over to the Senate. Some lawmakers have suggested the Senate could approve the BBB by the end of November, assuming the House passes it shortly.

Both chambers will only be in session for one additional week this month—this week and the week of Nov. 15. Members could be called back on short notice to approve the bill, but with both chambers out for two weeks this month, the timeline for passage is tighter than it otherwise would be.