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U.S. Senate braces for 'hell of a fight' over Biden's infrastructure plan

[July 12, 2021] By Richard Cowan

WASHINGTON (Reuters) - The U.S. Senate returns on Monday to one of its most ambitious agendas in years as Democratic President Joe Biden seeks trillions of dollars in infrastructure spending and Republicans promise "a hell of a fight" against raising taxes to pay for it.

Senate Majority Leader Chuck Schumer aims to stage debates and votes this summer on both a bipartisan $1.2 trillion infrastructure plan https://www.reuters.com/world/us/whats-us-senates-12-trillion-infrastructure-plan-2021-06-24 and the first step toward a second measure that would pass with only Democratic votes.

"Senators should be prepared for the possibility of working long nights, weekends and remaining in Washington into the previously-scheduled August" recess, Schumer wrote in a letter on Friday to 47 fellow Democrats and two independents aligned with him. His Republican counterpart, Mitch McConnell, promised a "hell of a fight."

Amid the brewing battle over the proposed $1.2 trillion plan, Congress could get embroiled in a potentially divisive debate over raising the statutory limit on U.S. borrowing authority, which expires at the end of July.

While the Treasury Department is expected to be able to manage for several weeks beyond the July 31 deadline, global financial markets will get increasingly jittery about a potential U.S. default on its debt the longer the matter is unresolved.

Democrats control both houses of Congress by razor-thin margins and can afford to lose only a few votes in the House of Representatives and none in the Senate if they are to succeed. They view both the overall infrastructure package as potentially the most important legislation to push through before next year's elections that will determine control of Congress for the second half of Biden's four-year term.

Over the July 4 holiday break, a bipartisan group of senators tried to work out final details of the first piece of the infrastructure jigsaw puzzle, a plan they sketched out in late June. Agreeing on ways to finance the $1.2 trillion price tag was proving to be a challenge, according to lawmakers and congressional aides.

The deal would pay for rebuilding roads, bridges and other traditional infrastructure projects and bring broadband internet service to more rural areas.

It got a boost last week from the "Problem Solvers Caucus," a group of Democratic and Republican lawmakers.

Meanwhile, Senate Republican Leader Mitch McConnell said there was "a decent chance" the bipartisan bill could gain traction in the deeply divided Congress. He warned that the spending must somehow be financed without adding to the national debt.

'NOT THE RIGHT THING'

Speaking at public events in his home state of Kentucky last week, McConnell saved his grim assessments for tax hikes in the other infrastructure legislation Democrats are expected to produce in addition to the bipartisan bill.

"This is going to be a hell of a fight. ... This is not the right thing to do for the country," McConnell warned as he attacked Biden's plans for possible tax increases on corporations and the wealthy to help finance the cost of some infrastructure investments.

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Senate Majority Leader Chuck Schumer (D-NY) speaks to news reporters following the announcement of a bipartisan deal on infrastructure, on Capitol Hill in Washington, U.S., June 24, 2021. REUTERS/Tom Brenner/File Photo

One measure, to be hammered out sometime before the start of the August recess, would simply provide the technical framework for ramming through the Senate - without Republican support - a second, bigger infrastructure measure to build upon the $1.2 trillion bipartisan plan.

That Democrats-only plan would require a maneuver called "reconciliation https://www.reuters.com/world/us/us-senates-reconciliation-process-its-not-way-it-sounds-2021-06-16" that skirts Senate rules requiring 60 votes to pass most legislation.

The large package is set to be the final piece of Biden's first-year legislative dreams: a partisan "human infrastructure" bill in the fall to invest huge sums to confront climate change, while also expanding education opportunities across the United States and home healthcare for the elderly and others.

McConnell has attacked these initiatives and is hoping to generate opposition from some moderate Democrats.

Senate Budget Committee Chairman Bernie Sanders, a leading liberal, is looking for up to $6 trillion in new investments, while other, more moderate Democrats on his panel want less.

Corporate lobbyists, in concert with Republicans, already were laying plans to thwart the initiative https://reut.rs/3AMBeKw, arguing that tax increases would hurt a U.S. economy emerging from the rubble of the COVID-19 pandemic.

Meanwhile, Democrats of all political stripes will be looking to attach provisions important to their constituents. Progressives demand turning a temporary expansion of a child tax credit into a permanent benefit. And, lawmakers from heavily Democratic states with high taxes insist that a cap on state and local tax deductions (SALT), which was included in a 2017 Republican tax law, be eased.

"No SALT, no dice," Democratic Representative Josh Gottheimer of New Jersey, where state and local taxes are high relative to the national average, told MSNBC last week.

Given Democrats' razor-thin majorities in the House and Senate, party leaders in both chambers will have to pay attention to every one of their members' demands or risk losing enough support for passage of any of these bills.

(Reporting by Richard Cowan; additional reporting by Susan Cornwell; editing by Jonathan Oatis)

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