This post was originally published on this site
President Joe Biden and his administration on Wednesday offered an upbeat reaction after top Senate Democrats late Tuesday reached a budget agreement that calls for spending $3.5 trillion on “human infrastructure,” efforts related to climate change and other Democratic priorities.
“We’re going to get this done,” Biden told reporters as he arrived on Capitol Hill for a lunch meeting with Senate Majority Leader Chuck Schumer and other Democratic senators on the spending plans. The president then said, “I think we’re going to get a lot done,” as he left the Hill after the meeting.
Democratic-run Washington could be on track to take a two-step approach to massive outlays. First, a $1 trillion bipartisan infrastructure
PAVE,
plan would draw the 60 Senate votes that are needed to bypass the filibuster. Then, Democrats would go it alone without Republicans to pass their $3.5 trillion package by a simple majority vote through a process known as budget reconciliation.
“We feel this is working exactly as it should — the president of the United States proposes a bold agenda, as he did back in March. Congress works out a path forward, works out an agreement,” White House press secretary Jen Psaki told reporters during a Wednesday briefing. Biden is now “going to advocate with members, he’s going to advocate with the American people and communicate and sell the package,” she added.
Psaki described Tuesday’s agreement as “a major breakthrough,” but also noted that the deal “needs support of all Democrats in order to move it forward.” The Senate is split 50-50, with Democrats in control only because Vice President Kamala Harris can cast tiebreaking votes.
One key moderate Democratic senator, West Virginia’s Joe Manchin, reportedly said on Wednesday that he’s open to the $3.5 trillion deal, but not yet fully endorsing it.
Analysts at Capital Alpha Partners were downbeat on the prospects of the spending plans.
“We see Democrats embarking on a risky all-or-nothing strategy that could delay a final result until as late as Christmas, creating great policy uncertainty for the duration, and making it more difficult to pass appropriations bills and deal with the debt ceiling,” said James Lucier, managing director at Capital Alpha, in a note.
“If there is a final result, we expect the package to be much smaller than $3.5 trillion in size. We still expect a package or combination of packages in the range of $1 trillion to pass at the end of the day, but the odds of no outcome or a nothing-done are also greater.”
U.S. stocks
SPX,
traded slightly higher on Wednesday, as Federal Reserve Chairman Jerome Powell testified on the Hill that the time is not right to pull back on Fed support.
