With infrastructure talks in overtime, Dems move to keep government funding on track

Progressives, fed up with the slow pace of bipartisan infrastructure talks, are ready to go it alone now. But Yarmuth’s plan is a signal that despite Democrats’ increasing impatience, the party is still deferring to the White House on when to proceed with reconciliation — the powerful budget tool already used by Democrats to pass Biden’s $1.9 trillion pandemic relief package along party lines earlier this year.

“I think we’re still waiting on the call from the White House as to when they do or don’t give up on a bipartisan infrastructure package,” Yarmuth said.

The separate budget resolution he’s preparing will include defense and nondefense funding for the coming fiscal year and a blueprint for using reconciliation to fulfill the president’s jobs and infrastructure priorities without GOP support. Timing is unclear and pulling that legislation together will take several weeks, Yarmuth said.

“Every day that goes by without a call on reconciliation delays it a little bit,” he said. “Theoretically we could do [a budget resolution] late this month, but I hesitate to put a target on it. It will be done before the August recess, that’s for sure.”

Biden has been talking for weeks with Sen. Shelley Moore Capito (R-W.Va.), a lead GOP negotiator on infrastructure. But talks officially collapsed on Tuesday afternoon, with both parties still about $700 billion apart. Biden is now pivoting to negotiations with a bipartisan group of 20 senators, but the administration has already signaled that it will wind down bipartisan discussions absent significant progress in the coming days.

Majority Leader Chuck Schumer also indicated on Tuesday afternoon that the party is increasingly committed to wielding reconciliation in the coming weeks.

“We all know as a caucus we will not be able to do all the things the country needs in a bipartisan way,” he said. “So at the same time we are pursuing the pursuit of reconciliation.”

Yarmuth — who said he’s meeting with Senate Budget Chair Bernie Sanders (I-Vt.) for dinner this week to compare budget resolution notes — expects Democrats to use reconciliation even if there is a bipartisan deal. It’s necessary to pass all of the priorities that Republicans will never agree to, Yarmuth said, like caregiving and climate change proposals included in Biden’s $2.3 trillion infrastructure plan and his $1.8 trillion families proposal.

The Kentucky Democrat isn’t sure if his party will use reconciliation to address the debt ceiling or pass elements of immigration reform.

“I can’t see any scenario in which there isn’t some reconciliation process,” Yarmuth said. “Because Republicans aren’t going to agree to a lot of what’s in the jobs plan and families plan.”

Democratic priorities are piling up with Congress’ August recess on the horizon. Congressional leaders struck a deal in 2019 that suspended the debt ceiling through July 31. While the Treasury Department can then take so-called extraordinary measures to keep paying the government’s bills on time while lawmakers work out another deal, Treasury officials have warned that those measures may run out sooner than expected due to pandemic-related uncertainty over spending and revenues.

Government funding expires at the end of September, with federally enhanced unemployment benefits also ending that month. Any deal to fund the government can’t be tucked into a reconciliation bill, however — spending bills require support from at least 10 Senate Republicans.

While reconciliation remains a big question mark, Yarmuth said he isn’t expecting a messy fight among Democrats over the defense and nondefense spending levels that would also be included in a forthcoming budget resolution. Back in 2019, Yarmuth was forced to “deem” the numbers amid a progressive revolt over military funding. The margins are much smaller now — Democrats can only afford to lose four votes as of June 21.

The top-line government funding numbers this time around will likely look similar to those outlined in Biden’s fiscal 2022 budget proposal, Yarmuth said. The administration’s request calls for a total of $769 billion for nondefense programs in the upcoming fiscal year, which begins Oct. 1. Biden has also asked for $753 billion for national defense programs, including cash for overseas activities. That amounts to a 16 percent increase over current funding levels for domestic programs, while providing a less than 2 percent increase for the military.

But that small increase is still too much for some progressives to stomach. Sanders, for example, has pushed for a 10 percent cut in Pentagon spending. But with massive investments in infrastructure and the middle class on the line, there’s more at stake for Democrats typically raring for a defense funding fight.

Yarmuth said Democratic leaders are proceeding on the assumption that a budget resolution allowing Democrats to pass significant increases for domestic programs on party lines will garner enough party support to pass on the House floor, despite defense funding concerns.

“But not without some pain,” Yarmuth said. “It will be difficult for a lot of members to swallow.”

Jennifer Scholtes contributed to this report.