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July 30, 2021, 11:47 a.m. EDT

Bipartisan infrastructure deal still faces long, uncertain road

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By Victor Reklaitis

While a bipartisan infrastructure plan is advancing in the Senate, analysts are warning that it remains on a bumpy road, with plenty of political maneuvering still ahead.

The Senate voted 67-32 late Wednesday to begin formal consideration of the plan, which calls for $550 billion in new infrastructure /zigman2/quotes/200238288/composite PAVE +0.51% spending, down from a prior level of $579 billion, and has an overall price tag of about $1 trillion.

“Consideration of the bill and amendments are likely to take another week before another cloture vote (60 votes needed) and final passage (simple majority needed),” said Benjamin Salisbury, director of research at Height Capital Markets, in a note on Thursday.

“Although we are confident that the Senate can pass the bill remaining risks include a critical CBO score of the pay-for assumptions and the potential for poison-pill amendments,” he added, referring to a Congressional Budget Office analysis of proposed funding.

Democratic-run Washington is aiming to take a  two-step approach to big spending . With that approach, the bipartisan infrastructure plan first would draw the 60 votes in the 50-50 Senate that are needed to bypass the filibuster. Then, Democrats would go it alone to pass a $3.5 trillion package by a simple majority vote through a process known as budget reconciliation . That  bigger package calls for massive spending on efforts related to climate change, “human infrastructure” and other Democratic priorities.

“We maintain our estimate of a roughly 35%-45% probability of passing a joint bipartisan infrastructure bill and slimmed down reconciliation bill, although the situation is highly fluid,” Salisbury said.

“A lesser probability (20%-30%) is that either the infrastructure bill or reconciliation bill pass on their own,” he also wrote. “Lastly there is an ever present risk (25%-45%) that the entire effort will collapse under its own weight. We continue to regard the inflation narrative as the largest risk to passage.”

See: Prices are soaring and Americans aren’t happy about it. Don’t worry, says the Fed

The bipartisan infrastructure plan now calls for $39 billion for public transit, down from $49 billion a month ago , and there is no longer $20 billion for an “infrastructure bank.” But new spending for roads, bridges and other major projects remains at about $110 billion, and other areas such as rail, broadband and water systems haven’t seen big changes in their allocations from last month.

To fund the bipartisan infrastructure plan, its backers propose repurposing $205 billion in existing COVID-19 relief funds. That’s the largest single source of funding, but the many others include tapping unused unemployment benefits and delaying a Medicare rebate rule. One new funding source would be applying information-reporting requirements to cryptocurrencies /zigman2/quotes/31322028/realtime BTCUSD -2.48% — which would provide an estimated $28 billion.

See: Crypto allies rally against ‘ignorant’ new tax rules in bipartisan infrastructure deal

“The process in the Senate could take a week or longer, but if the legislative text is released today or tomorrow, Schumer could keep the Senate in session this weekend to finish work on the bill as soon as early next week,” said analysts at Beacon Policy Advisors in a note on Thursday, referring to Senate Majority Leader Chuck Schumer, the New York Democrat. 

“House Speaker Nancy Pelosi (D-CA) has maintained that she will not take up the bipartisan infrastructure bill until the Democrats’ upcoming infrastructure legislation to be passed via reconciliation also passes the Senate later this year.   As a result, the bipartisan infrastructure measure will not become law until later this fall,” they added.

Former President Donald Trump — who may run again against President Joe Biden in 2024 and remains a big influence on Republicans — blasted the bipartisan infrastructure deal in a statement on Wednesday.

“Hard to believe our Senate Republicans are dealing with the Radical Left Democrats in making a so-called bipartisan bill on ‘infrastructure,'” Trump said. He also wrote: “Don’t do it Republicans — Patriots will never forget!”

Meanwhile, a key moderate Democrat, Sen. Kyrsten Sinema of Arizona, told one of her state’s newspapers on Wednesday that she does not support the $3.5 trillion package , though she would support the process of starting consideration of the measure.

“While I will support beginning this process, I do not support a bill that costs $3.5 trillion,” she said.

Her stance drew criticism from progressive Democrats.

“Good luck tanking your own party’s investment on childcare, climate action, and infrastructure while presuming you’ll survive a 3 vote House margin — especially after choosing to exclude members of color from negotiations and calling that a ‘bipartisan accomplishment,'” said Rep. Alexandria Ocasio-Cortez of New York in a tweet .

This report was first published on July 29, 2021.

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