Senate Democrats hit speedbumps with big spending plans

Senate Majority Leader Charles SchumerChuck SchumerLouisiana delegation split over debt hike bill with disaster aid The Hill's Morning Report - Presented by Alibaba - Government shutdown fears increase as leaders dig in McConnell signals Senate GOP will oppose combined debt ceiling-funding bill MORE (D-N.Y.) is urging Democrats to stick together as his ambitious plan to move a scaled-down bipartisan infrastructure bill and a much larger budget reconciliation spending package on parallel tracks hits speedbumps.

Senate Democrats need to clinch a deal on the size and scope of a much larger infrastructure package they plan to pass under the budget reconciliation process, which prevents the GOP from blocking the measure with the filibuster but means Democrats must be completely unified.

One Democratic aide said “the million-dollar question” is whether the entire Democratic caucus will unify behind the budget resolution, which is seen as a prerequisite to moving the scaled-down infrastructure proposal — which is also important to some members who want to show Washington can still secure a bipartisan victory

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Schumer at a closed-door lunch meeting Tuesday urged his colleagues not to let their personal agendas derail President BidenJoe BidenUN meeting with US, France canceled over scheduling issue Schumer moves to break GOP blockade on Biden's State picks GOP Rep. Cawthorn likens vaccine mandates to 'modern-day segregation' MORE’s goal of enacting a $4.1 trillion infrastructure agenda.

“Chuck is delivering the message he has to deliver, which is ‘Don’t let the perfect be the enemy of the good, this is our one shot to do big stuff,’” a Democratic senator said of Schumer’s message.

He told colleagues: “Everybody has come at me privately saying ‘I won’t vote for it unless I get this,’” according to the lawmaker.

Schumer then cautioned: “We can’t have everybody freelancing and drawing their own lines in the sand. Keep your powder dry.”

Briefing reporters after the lengthy caucus meeting, Schumer confirmed his message at the lunch: “I said there’s importance to unity and don’t draw lines in the sand.” 

“Everybody agreed,” he added.

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Centrist Sen. Joe ManchinJoe ManchinOvernight Energy & Environment — Presented by the League of Conservation Voters — Biden, Xi talk climate at UN forum Election reform in the states is not all doom and gloom Manchin presses Interior nominee on leasing program review MORE (D-W.Va.) complicated negotiations Tuesday by telling reporters that he wants all of the bipartisan plan as well as all of the reconciliation package paid for with other spending cuts or tax hikes.

“I think everything should be paid for now. I think we’ve put enough free money out,” Manchin said, when pressed about whether the full cost of the reconciliation package should be offset.

Addressing Manchin’s concerns, Schumer told reporters Tuesday that Senate Democrats are considering an option to fully cover the cost of the reconciliation package, which is expected to come to the floor this fall.

“One of the things that was presented in our caucus is that we could fully pay for the bill. That’s one of the options on the table. That is doable. Absolutely,” Schumer said after the caucus lunch.

That means Senate Democrats would need to find at least another trillion dollars in new revenues to cover the cost of a bill expected to cost at least $3.5 trillion and perhaps substantially more.

Biden proposed raising $2.39 trillion though a series of tax hikes and reforms, such as raising the corporate tax rate from 21 percent to 28 percent, raising the top individual tax rate to 39.6 percent and increasing taxes on capital gains.

Other Democrats have balked at the idea of offsetting the full cost of Biden’s infrastructure agenda.

Sen. Chris MurphyChristopher (Chris) Scott MurphySenators slow Biden with holds at Pentagon, State Tell our troops: 'Your sacrifice wasn't in vain' Sunday shows preview: Bombing in Kabul delivers blow to evacuation effort; US orders strikes on ISIS-K MORE (Conn.) is one of many Senate Democrats who say that one-time infrastructure investments should be financed with deficit spending, arguing those projects will pay for themselves by benefitting the economy over decades.

“I think it’s nuts to not amortize payments for infrastructure. Hard infrastructure is the kind of thing you should be paying for over the course of 30, 40, 50 years,” he said. “I didn’t pay for my house in cash.”

But centrist Democrats from more conservative states are growing nervous about the soaring deficit and rising inflation, which Republicans are blaming on federal spending.

Manchin has objected to demands by liberal colleagues that he promise in advance to support a massive reconciliation package to enact elements of Biden’s infrastructure agenda that don’t have bipartisan support.

Sen. Jon TesterJonathan (Jon) TesterDemocrats say Biden must get more involved in budget fight Senate backers of new voting rights bill push for swift passage The Hill's 12:30 Report - Presented by Facebook - Polls open in California as Newsom fights for job MORE (D-Mont.), another moderate, said he’s not yet ready to promise his support for a reconciliation package expected to run into the trillions of dollars.

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“I’ve got to see ... I’m all about reconciliation [but] before I give my 'yes' vote to a $3.5 trillion package — I don’t have any information, so it’s going to take me a bit to sort through that. I’m not saying no, but I’m not saying yes either. So it’s going to take a little bit, $3.5 trillion is a shit-pile of dough,” Tester said Tuesday.

At the other end of the debate within the Democratic caucus is Senate Budget Committee Chairman Bernie SandersBernie SandersFranken targets senators from both parties in new comedy tour Pelosi says House members would not vote on spending bill top line higher than Senate's Groups push lawmakers to use defense bill to end support for Saudis in Yemen civil war MORE (I-Vt.), who is waving off a proposal to set a $3.5 trillion infrastructure spending number for the budget reconciliation process as insufficient.

“You know what child care costs in my state? It costs $15,000. How do you pay for that? You’ve got millions of kids who are in student debt, you’ve got a crumbling infrastructure. Let’s talk about the issues,” he said.

“I’m going to have to listen other people’s point of view, they’re going to have to listen to my point of view. At the end of the day, we’re going to come up with something very significant,” he added.

Senate Democrats emerged from Tuesday’s lunch meeting saying that Democrats on the Budget Committee will reach a deal on the budget resolution by week’s end.

“I think you’re going to see an agreement by the Democrats on the Budget Committee this week. I’m very optimistic about that based on what I just heard in the caucus,” said one Democratic senator who heard presentations from Sanders and Sen. Mark WarnerMark Robert WarnerDemocrats confront 'Rubik's cube on steroids' Advocates call on top Democrats for 0B in housing investments Democrats draw red lines in spending fight MORE (D-Va.) at the lunch meeting.

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Sanders and Warner started off the budget talks far apart in their spending goals but told Democratic colleagues they would find middle ground soon.

“They were like, ‘Look, we can find a place where we can land in the middle,’” the senator added, requesting anonymity to discuss the meeting.

Budget Committee Democrats after a meeting that stretched until past 9 p.m. Monday also voiced optimism about reaching a deal, at least within their committee.

“I really do believe we’re making progress,” said Sen. Chris Van HollenChristopher (Chris) Van HollenBottom line Spendthrift Democrats ignore looming bankruptcy of Social Security and Medicare Progressive pollster: 65 percent of likely voters would back polluters tax MORE (D-Md.).

Sen. Jeff MerkleyJeff MerkleyDemocrats revive filibuster fight over voting rights bill Senate backers of new voting rights bill push for swift passage Stacey Abrams backs Senate Democrats' voting rights compromise MORE (D-Ore.) said an agreement on the top-line infrastructure spending number of the reconciliation package could come as soon as Thursday, describing it as the panel’s “goal.”

Meanwhile, the bipartisan group of 22 senator who have endorsed the scaled-down $1.2 trillion proposal say they hope to have the legislation finalized by the end of the week.

Schumer told reporters that Sen. Kyrsten SinemaKyrsten SinemaDemocrats reject hardball tactics against Senate parliamentarian  The Hill's Morning Report - Presented by Alibaba - Democrats return to disappointment on immigration This week: Democrats face mounting headaches MORE (D-Ariz.), who has helped lead the bipartisan negotiation, told Democrats at Tuesday’s lunch “that we can get to the goal that I proposed, that we have legislation ready by Friday.” 

Jordain Carney contributed.