An Alternative Narrative

After Biden's win and the miracle of the Georgia Senate races the Democrats found themselves in control of the executive branch and a small majority in both Houses.  The Senate majority needed all 50 Democratic Senators to agree on legislation and to agree to use budget reconciliation to overcome a GOP filibuster.

Biden had formulated an excellent three-part plan.  

The American Rescue Plan (ARP) for emergency funding of programs made necessary by the pandemic.

The American Jobs Plan (AJP), an infrastructure investment, funded by an increase in corporate taxes.

The American Family Plan (AFP), domestic spending programs on health, education, child care, etc. funded by an increase in personal incomes taxes.

The ARP was a $1.9 trillion plan which included enhanced federal unemployment benefits, a child tax credit, loans to small businesses, expansion of ACA subsidies, vaccination rollout and funds for state and local governments.  The plan was an enormous expansion of domestic spending - completely unfunded.  Budget reconciliation was used to pass it in the Senate.  The plan was popular, progressive and (mostly) pragmatic.

Since infrastructure spending was an issue both parties supported in principle it was decided to try to pass a bipartisan bill.   It took months on negotiation but on August 10th the bill passed the Senate.  To win GOP support some initiatives, particularly programs to address climate change were omitted from the bill.  But the party had come up with a plan to put everything that was left out of the AJP into a third bill, the Build Back Better (BB) Act.   The American Family Plan which was focused on social issues morphed into $3.5 trillion of new domestic spending that was included in the budget that passed the Senate on Aug 11. The intention was to pass the third act using budget reconciliation again with the understanding that this bill would never get GOP support. 

The idea was that since the party was likely to lose either the House or Senate in the mid-terms it made sense to "go big".  There was only going to be one chance and this was it. So the AFP morphed into the BBB. Since the AJP did not raise taxes the initial idea behind the BBB Act was to include increases in both corporate and personal income taxes.

The catch was that there were at least two Democratic Senators opposed to many of the programs in the budget.   The leadership of Pelosi and Schumer had hoped to pass both bills at the same time.  The hope was that by delaying the vote on the AJP in the House pressure would be on the moderate Dems to support the BBB Act.   The leadership and the House Progressive Caucus simply did not trust the moderates to cooperate on the BBB unless they tied it to the much more popular AJP.   They had reason to be cautious as the key Dem Senators, Manchin and Sinema, were plainly opposed to elements of the BBB but were not being clear as to what they would support or even if they would compromise at all.  

Therefore, when the AJP came to the house the House Progressive Caucus (HPC) refused to support it until the BBB was agreed.   Then a small House "moderate" faction intervened.  They refused to support the budget resolution.   Passing the budget resolution was a pre-requisite for using reconciliation.  They wanted to vote on the AJP immediately and then work on the BBB Act.   But the HPC was unwilling to give up whatever leverage they thought accrued from delaying the vote on the AJP.   Pelosi then agreed to vote on the AJP no later than Sept 27.

This was her statement:

In consultation with the Chair of the Transportation and Infrastructure Committee, I am committing to pass the bipartisan infrastructure bill by September 27. I do so with a commitment to rally House Democratic support for its passage.

Then the House set off to work on the BBB with the hope that it would be complete by the end of Sept and both bills could be approved.   The challenge was that the $3.5 trillion in the budget reconciliation was very far off of what could be passed in the Senate.   Negotiations dragged on through the month of Sept.  It was difficult pinning down Manchin on the size of the act and what programs he strongly opposed.  It was even more difficult pinning Sinema down.  When Sept 27 came, the BBB was not close to complete.  The HPC told Pelosi they would not vote for the AJP even though they supported it.  They were reluctant to give up any leverage to Manchin, Sinema and the House "moderates".   So, Pelosi pulled the vote.  Somewhat surprisingly the House moderates did not make a fuss.   They understood that the votes weren't there to pass the AJP yet. 

Over the next month negotiations (mostly private) continued to work on the bill.  On Oct. 28th Biden announced a "framework" had been agreed at $1.75 trillion.  But the bill hadn't been written and Manchin did not commit to support it.  On Nov. 1 he made a statement that he was withholding support for the "framework" and wanted to understand the costs.  In his defense the"framework" had one obvious problem.  It only funded the child tax credit for one year which was an important anti-poverty feature of the AFP.  

Finally on Nov 5 the moderates agreed in principle to support the BBB "framework" once the Congressional Budget Office estimated the cost and economic impacts.  With that the HPC supported the AJP and it passed.