Stakes are high for Democrats in fiscal battles in Congress

WASHINGTON — The stakes are high for Democrats in the weeks ahead as they wrestle with a thorny confluence of issues — keeping the government open, avoiding a federal government default and enacting as much as $5 trillion in infrastructure and social spending.

After weeks of intraparty fighting over priorities and the top-line dollar figure for two massive spending bills, and the logjam by Republicans, Democratic leaders Sen. Chuck Schumer (D-N.Y.) and Rep. Nancy Pelosi (D-Calif.) have their work cut out for them.

Just how dire failure would be for President Joe Biden, and his legacy, and Democrats in Congress, and their reelection chances next year, was laid out last week in a letter to Democratic lawmakers by John Podesta, a party elder statesman.

"President Biden has staked his presidency on demonstrating to the American people — and to the world — that democracy can deliver. A democracy that fails to solve the problems of its constituents is a failing democracy," Podesta wrote.

"The historical trend makes it clear that Democrats will face severe headwinds next November, but nothing will guarantee a political reckoning faster than if the Democrats fail to pass anything," Podesta wrote about the midterm elections next year.

It won’t be easy for Democrats to accomplish all they have set out to do.

Senate Minority Leader Mitch McConnell (R-Ky.) has jammed Schumer in the Senate, where Democrats have a majority only because Vice President Kamala Harris can break the tie between the 50-50 split in members between the two parties.

And in the House, Pelosi has such a narrow margin that she cannot afford to lose the votes of three Democrats if Republicans remain united in opposition, empowering rival centrists and progressives in her caucus to hold hostage the big bills that don’t include their proposals.

Meanwhile, the stakes for Republicans remain low.

"They feel pretty comfortable right now that no matter what happens, the public is not going to blame them," Jim Manley, a Democratic political consultant, told Newsday.

Here are the stakes for each of the complex issues facing the Democratic-controlled White House and Congress.

Keeping government open

The federal government will run out of money, and begin a partial shutdown, unless Congress appropriates more by midnight next Thursday when the fiscal year ends — which would send shock waves amid a pandemic and damage the Democrats.

Last Tuesday, House Democrats passed a bill in a party-line vote to extend government spending through Dec. 3, provide nearly $35 billion in disaster aid for Hurricane Ida, wildfires and flooding as well as Afghan refugee resettlement, and to lift the debt limit through 2022.

Schumer has scheduled a vote to bring that bill to the floor, but McConnell said Republicans will block it because it includes the debt limit. Schumer is expected to drop the debt limit from the bill — allowing both chambers to pass it.

"We definitely want to avoid a shutdown, at all costs," Sen. Tim Kaine (D-Va.) told reporters last week.

Raising the debt limit

Sometime between Oct. 15 and Nov. 4, the federal government won’t be able to pay its bills unless Congress raises the limit again, the Bipartisan Policy Center estimated.

Usually, a bipartisan majority raises the debt limit, as it did three times during the Trump administration, but McConnell said Republicans will refuse to vote for a debt increase to protest the Democrats’ "reckless taxing and spending spree."

Schumer could use a reconciliation bill so Democrats can raise the debt limit without a single Republican vote, but that will take time.

Failure to lift the debt limit would be damaging. Moody’s Analytics said a prolonged debt ceiling crisis could spur a recession, cost as many as 6 million jobs and push unemployment up to as much as 9%.

The infrastructure bill

A $550 billion infrastructure bill that would create the biggest injection of spending on public works projects in decades passed in the Senate in a bipartisan 69-30 vote in August, a feat of negotiation and surprising cross-party trust.

But since then, the legislation it has been caught in a Democratic crossfire in the House.

Centrists won a Pelosi promise for a vote on Monday on the infrastructure bill and progressives demanded a vote first on the proposed $3.5 trillion Biden’s Build Back Better Act, which Democrats plan to enact through the reconciliation process that evades the GOP filibuster.

Pelosi appears to be trying to finesse the situation.

On Friday, she announced that the House will take up the bipartisan infrastructure bill on Monday, as promised, but also will take up next week a rushed first draft — by the House Budget Committee — of the reconciliation bill.

And on Saturday she told her caucus: "This week, we must pass a Continuing Resolution, Build Back Better Act and the BIF," or bipartisan infrastructure bill.

How the votes will go are in doubt.

If House Democrats sink the infrastructure bill, the centrists might in turn undercut the reconciliation bill — and that would torpedo Biden’s ambitious agenda.

Build back better

The $6 trillion social service and infrastructure package birthed in the Senate Finance Committee chaired by Sen. Bernie Sanders (I-Vt.) has been cut to a $3.5 trillion bill and is on its way to being trimmed even more.

Wielding the shears are purple state Sens. Joe Manchin (D-W.Va.) and Kristen Sinema (D-Ariz.), and nine House moderates led by Rep. Josh Gottheimer (D-N.J.) — much to the angry dismay of progressives who point out the bill is Biden’s agenda.

Because Republicans will not support a bill they charge will make "socialism permanent" in America, Schumer is using the same reconciliation process to pass it that Republicans used to enact the deep tax cuts in 2017 — a budgetary legislative gambit that evades the filibuster.

But amid much dispute among Democratic factions, neither the Senate nor the House has presented a final version of the legislative package. Instead, Schumer and Pelosi announced last week that they and Biden have agreed on a framework to pay for whatever the final bill becomes.

The process to pass the bill could continue into October — or even later. Or it could implode in infighting.

The stakes

If Democrats fail to pass both the bipartisan infrastructure bill and the reconciliation bill, they will face a self-inflicted wound — and potentially damage to the economy.

Biden will not get a badly needed win to recover from sharply dropping approval ratings after the chaotic Afghanistan evacuation and southern border problems. And because he will not get a second chance in his first term, he will be deprived of a major legacy.

Meanwhile, Democrats could face a shellacking next year in the midterms.

"What a lot of folks forget is in the disastrous 1994 and 2010 midterms for Democrats each had their own high profile legislative failure — 1994 was Hillarycare, 2010 was cap and trade — and both went down hard and ugly," said former Schumer aide Jim Kessler.

"So," he said, "failure isn't an option."

Republicans warn that passing the reconciliation bill will harm the economy as it repeals several of the 2017 tax cuts, but progressives argue the economy will be hurt more by the bills’ failure.

The $1.9 trillion in funding in the COVID-19 aid package enacted by Democrats in March will begin to fade next year, said Adam Hersh, an economist at the liberal Economic Policy Institute, as he recalled the failure to inject money into the economy in 2011.

"If we don't do more," he said, "we could be seeing a situation like we saw in the aftermath of the Great Recession a decade ago, where the fiscal support for recovery was withdrawn too soon, and that led to a jobless recovery for many years."