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Capitol Report: House faces tricky maneuvering to advance Biden’s big infrastructure and social-spending packages

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Can the Democratic-run U.S. House move along the party’s big spending plans?

The House is slated to return to Washington, D.C., on Monday, coming back from an August break earlier than originally planned in order to consider measures already passed by the Democratic-run Senate and touted by President Joe Biden.

The Senate voted 69-30 in favor of a $1 trillion bipartisan infrastructure bill on Aug. 10, and it then had a procedural vote a day later for a $3.5 trillion package targeting social spending, climate change and other Democratic priorities that was approved 50-49, along party lines.

House Speaker Nancy Pelosi, the California Democrat, on Sunday proposed having a procedural vote that would set up future passage of both measures, in an effort to win over nine moderate Democratic representatives who want the $1 trillion infrastructure bill to get approved before the larger package.

But her nine colleagues sounded unmoved by her proposal, saying in a joint statement later Sunday that they “appreciate the forward procedural movement” on the bipartisan infrastructure bill, but the House “should vote first on the Bipartisan Infrastructure Framework without delay and then move to immediate consideration of the budget resolution.”

Pelosi also faces pressure from progressive House Democrats who say they won’t support the bipartisan infrastructure bill unless the $3.5 trillion package moves ahead as well. She has a narrow House majority and can afford no more than three defections by Democrats on legislation if there’s no Republican support for it.

House Majority Leader Steny Hoyer, the Maryland Democrat, reportedly urged all Democrats on a conference call Tuesday to support the vote setting up future passage of both measures. He also said voting would start on Monday night, with the House acting as well on a voting-rights bill named after the late Rep. John Lewis.

“I continue to believe that there is a small but non-trivial possibility that in the end, Congress passes none of the above,” said Stephen Stanley, chief economist at Amherst Pierpont, in a recent note. He pointed out lawmakers soon will have to address the federal government’s debt ceiling and “do something about a budget for next year or risk a government shutdown.”

“It is possible that the infrastructure and reconciliation bills get shoved to the back burner for a few days or for as long as two months while Congress addresses these more pressing concerns.  Like a banana sitting in your pantry, the longer these bills sit in limbo, the softer their support will get,” Stanley said.

There is a “standoff” and “no clear path forward” in the House, said Benjamin Salisbury, director of research at Height Capital Markets, in a note.

“Neither side has left much wiggle room for compromise on the sequencing of the bills, so creativity will be needed,” Salisbury added.

Biden is facing criticism even from within his own party over his administration’s handling of the U.S. withdrawal from Afghanistan, and that might be a problem for his plans for infrastructure and social spending.

“The fallout from the collapse of Afghanistan is not limited to foreign policy and could impact U.S. domestic politics including the debate in the House about regarding the two infrastructure bills as well as the future of the Federal Reserve,” said Brian Gardner, chief Washington policy strategist at Stifel, in a note.

Related: Powell’s future in question as Warren blasts Fed for being too easy on the biggest banks

Beyond the possible roadblocks in the House, the $3.5 trillion package is facing opposition from moderate Democratic senators, with Sen. Joe Manchin of West Virginia warning last week about Washington “continuing to spend at irresponsible levels.”

Infrastructure stocks, as tracked by the Global X U.S. Infrastructure Development ETF
PAVE,
-1.19%
,
have jumped 25% so far this year, topping the broad S&P 500 index’s
SPX,
+0.13%

gain of 17%.

This is an updated version of a report that was first published on Aug. 17, 2021.

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