Congress Poised to Avert Shutdown Amid Deadlock on Biden Agenda

Sept. 30, 2021, 6:00 AM

President Joe Biden is poised to avoid a disruptive shutdown of the federal government, but deal-making continues on his economic agenda before a planned Thursday vote on an infrastructure package that underscores deep divisions among Democrats.

The Senate will vote Thursday morning -- the eve of the new fiscal year -- to extend government funding until Dec. 3, sending the package to the House and ultimately to Biden’s desk for signature with just hours to spare.

Stripped of Republican-opposed language suspending the debt ceiling, the stopgap funding bill is expected to pass both chambers with bipartisan support. That will be the easiest item on Biden’s legislative to-do list.

WATCH: Government shutdown averted, but dealmaking continues on Capitol Hill.
Surveillance: Early Edition.” (Source: Bloomberg)

Fresh off a trip Wednesday night to the Congressional Baseball Game where he distributed Dove ice cream bars printed with the presidential seal to players from both parties, Biden will continue his efforts to break a Democratic deadlock that has stalled progress on his $4 trillion economic vision. At the same time, he must work with his party to avoid a government default now less than three weeks away.

President Joe Biden attends the Congressional Baseball Game in Washington, D.C., on Sept. 29.
Photographer: Al Drago/Bloomberg

Biden canceled a planned trip Wednesday to Chicago to step up attempts to strike a compromise between warring progressive and moderate Democrats whose differences over the size and scope of a tax and spending bill worth as much as $3.5 trillion threaten to sink his entire domestic agenda.

House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer met with Biden at the White House Wednesday afternoon. Pelosi afterward affirmed her plan to bring to the House floor on Thursday the $550 billion infrastructure bill that Biden negotiated earlier this year and which now has become a focal point of tension between the two wings of the party.

LISTEN: Greg Valliere, chief U.S strategist for AGF Investments, discusses the debt ceiling and President Biden’s infrastructure package with Bloomberg’s Nathan Hager.

Earlier: Schumer Says Deal Has Been Made to Avoid Government Shutdown

The White House said Wednesday night that Biden had also spoken by telephone with “additional lawmakers,” but did not name them.

Separately, Biden dispatched three top aides -- counselor Steve Ricchetti, legislative liaison Louisa Terrell and National Economic Council Director Brian Deese -- to meet with Senator Kyrsten Sinema of Arizona, a moderate, whose vote is crucial for passage but has said the $3.5 trillion price tag is too high.

Another moderate senator, Joe Manchin of West Virginia, made clear Wednesday afternoon that negotiations on the tax and spending bill, known as reconciliation, would not be completed before the House’s planned vote on the infrastructure bill.

House progressives have threatened to vote against the public works measure if it comes to the House floor before the larger package, which includes much of their priorities, passes both chambers.

“I didn’t know I was on their timetable,” Manchin said of the House progressives.

The progressives have said they have enough votes in the House to sink the infrastructure package, which has already passed the Senate. But Pelosi appeared undeterred.

“The plan is to bring the bill to the floor,” she told reporters after returning from the White House.

LISTEN: Bloomberg’s Laura Litvan discusses the latest news out of Washington, DC with hosts Paul Sweeney and Kailey Leinz on Bloomberg Radio.

The infrastructure vote was an appeal to moderate Democrats, for whom the roads-and-bridges measure is a top priority -- particularly those from swing districts. Progressives however are digging in to their demand for a deal on the larger package.

Read More: Biden Gets Chance to Lobby for Agenda as Lawmakers Play Baseball

“There are no votes to pass anything without passing the full agenda,” Representative Ilhan Omar of Minnesota said Wednesday.

Biden is committed to getting both pieces of his agenda through Congress, White House Press Secretary Jen Psaki said.

“Right now what we’re navigating through, what we’re working through, is how we can get agreement, of course, 50 votes in the Senate on a reconciliation package,” Psaki said. “We have to see what senators are comfortable with and what with everybody involved is comfortable with it to get enough votes to get it across the finish line.”

To unlock the second larger bill, the House is waiting on Senate moderates to reveal the amount they’ll support. Manchin has hinted he could back $1.5 trillion while Sinema has been more circumspect.

Without some deal between Biden and the moderates, it becomes more likely that the entire Biden agenda could languish in Congress, perhaps for months.

“If the vote were to fail tomorrow or be delayed, there would be a significant breach of trust that would slow the momentum in moving forward in delivering the Biden agenda,” said Representative Stephanie Murphy of Florida, leader of the fiscally conservative Blue Dog group of Democrats.

Senate Budget Committee Chairman Bernie Sanders, a Vermont independent, said he’s hopeful the infrastructure bill fails in the House if brought to a Thursday vote and will jolt moderates on the economic package.

“I think that’s the right thing to do and I’m encouraged by that,” Sanders, who initially pushed for a much larger social spending package. “And I would hope that that sends a signal to every member of the Democratic caucus including Senators Sinema and Manchin that we’re going to start serious negotiations and pass a very strong reconciliation bill.”

What’s the Debt Ceiling and Will the U.S. Raise It?: QuickTake

At the same time, the standoff between Republicans and Democrats over the debt suspension shows no sign of abating.

Treasury Secretary Janet Yellen has warned that a default looms on Oct. 18 without congressional action.

Concerns about the current impasse in Washington over the debt limit and other fiscal measures contributed to the biggest selloff in equities since May. The 2% drop in the S&P 500 Index was partially reversed in Wednesday trading. Yields on Treasury bills maturing around Oct. 18 rose more than those on other securities.

--With assistance from Jarrell Dillard and Jennifer Jacobs.

To contact the reporters on this story:
Erik Wasson in Washington at ewasson@bloomberg.net;
Laura Litvan in Washington at llitvan@bloomberg.net;
Billy House in Washington at bhouse5@bloomberg.net

To contact the editors responsible for this story:
Michael Shepard at mshepard7@bloomberg.net

John Harney, Megan Scully

© 2021 Bloomberg L.P. All rights reserved. Used with permission.

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