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BY JOHN BRESNAHAN, ANNA PALMER AND JAKE SHERMAN

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First of all, a very rare birthday shoutout in these here pages: Happy birthday to our CEO and founder Anna Palmer!!!  

News: Senate Democrats are now unlikely to try using the FY 2021 budget resolution to put together another reconciliation package, according to three sources close to the issue. 

This is a bit in the weeds, but it’s important because it tells us a lot about the Senate’s timing.

If you remember, Parliamentarian Elizabeth MacDonough ruled that Senate Democrats can use the same budget resolution to pass multiple majority-vote reconciliation packages, according to Majority Leader Chuck Schumer’s (D-N.Y.) office. Dems used the FY 2021 budget resolution to pass the $1.9 trillion American Rescue Plan in March, and they could use it again, Democrats say. But senior Democrats privately don’t believe they can finish work on a second reconciliation package using the 2021 budget resolution by the end of the fiscal year, which is Sept. 30.

Senate Democrats instead will shift their focus to FY 2022. They can use that budget resolution multiple times as well, under MacDonough’s ruling, and they don’t have to worry about the Sept. 30 deadline, Democrats say. But it also means the debate over infrastructure could drag well into the fall, which will put it on a collision path with the government funding and debt-limit skirmishes.

We warned you this would get complicated. But you should really brace for a busy July-through-October legislative rush.

Using a budget resolution for reconciliation multiple times would be a huge shift in how the Senate operates. Democrats could use the reconciliation process in several tranches to pass trillions of dollars worth of legislation proposed by President Joe Biden on a simple majority vote, rather than needing 60 votes to overcome any GOP filibuster. Republicans insist MacDonough’s ruling isn’t that clear cut.

Both the House and Senate will need to pass a FY 2022 budget resolution to use the fast-track process again. This will take some time to do, especially in the Senate, because of vote-a-rama. So exciting!  

The White House is set to release its budget resolution Friday, and Democrats are targeting mid-June for their own FY 2022 resolution, according to Democratic aides familiar with the issue. Senate Budget Committee Chair Bernie Sanders (I-Vt.) would only say on Monday that he’s prepared “to move as quickly as possible.”

But Sanders also told Axios: “I think we are reaching the end of the period in which we have not seen serious Republican proposals. And sooner [rather] than later, we’ve got to make it clear that we are going forward to address the crises facing the market.”

→ What this means: Despite Sanders’ comments, the White House isn’t quite ready to pull the plug on bipartisan talks with Senate Republicans. Biden administration officials say they want to explore all the options presented by the GOP lawmakers, in part because Biden would prefer a bipartisan deal. But there’s another reason it’s worth keeping talks alive with Republicans. Exploring all avenues for compromise would help convince skittish Democrats — ahem, Sen. Joe Manchin of West Virginia — to go along with reconciliation, leadership hopes.

Right now, these bipartisan talks seem to be going nowhere fast. A bipartisan group of senators met Monday night in Sen. Rob Portman’s (R-Ohio) hideaway, yet that didn’t seem to yield any breakthroughs. More talks are expected today. The outlook is poor, though.

There’s some discussion of using the highway reauthorization bill and water resources bill to try to get a slimmed down bipartisan compromise on infrastructure. Whatever isn’t included in those two bills — and that would be huge portions of Biden’s $2.3 trillion American Jobs Plan and $1.8 trillion American Family Plan — could then be rolled into one or more reconciliation packages, which the Senate would pass on a party line vote. An increase in the debt limit and even an immigration bill could be added as well. 

This approach would stretch the timeline for infrastructure discussions — both between the parties and internally among Democrats — over several months, giving Schumer more time to work on moderates like Manchin, who don’t like using reconciliation to jam through legislation.

Here are some data points illustrating what Sen. John Thune (R-S.D.) called a “stalemate” over a mega-infrastructure deal:

→ The two sides are roughly $1.5 trillion apart on overall spending. 

→ Sen. Shelley Moore Capito (R-W.Va.) blamed Biden’s staff for preventing him from cutting a deal that he wants to cut. Capito essentially said that the White House back-tracked on promises he made. Capito said something very similar after failed bipartisan talks on the Covid relief deal earlier this year.

→ They disagree on how to pay for the legislation. Republicans want to increase user fees, Democrats want to raise taxes.

→ They disagree about what the definition of “infrastructure” even is.

→ Sen. Tom Carper (D-Del.) is pressing the White House to keep climate provisions in the bill. Republicans are trying to strip them out. Democrats want electric vehicle money, Republicans don’t. 

The narrative: WaPo: “Infrastructure talks hit a wall as Senate GOP and White House exchange blame,” by Tony Romm and Seung Min Kim … Politico: “’Time to move on’: Infrastructure talks near collapse," by Burgess Everett and Marianne LeVine

To think there will be a bipartisan deal you’d have to be ignoring all available evidence.

Also: Last call! We are sending out the last reminder emails today to senior staffers participating in The Canvass — our anonymous survey of Capitol Hill aides. It only takes five minutes and we guarantee anonymity. We want to hear from you! 

WE HEARD … 

Police reform negotiators planning meeting this week

Negotiators involved in hashing out a police reform bill are planning to meet this week, according to several officials involved in the talks.

The Senate is in session, so Sens. Cory Booker (D-N.J.) and Tim Scott (R-S.C.) are in town. The House is out of session, but Rep. Karen Bass (D-Calif.) will be in Washington for part of the week to continue the talks. The rest of the negotiators are working out a time to join the talks remotely.

Scott turned heads in the Senate Monday when he told reporters “We had good progress over the weekend, I thought. I think we can see the end of the tunnel.”

Scott added: “Obviously, not this week coming. I think we’re starting to see a framework.”

Today is the first-anniversary of George Floyd’s death.

FIGHTING THE TAXMAN COMETH

New group opposed to any tax increase

A new pro-business coalition, America’s Job Creators for a Strong Recovery, is launching to target Democratic moderates over President Joe Biden’s plans to raise taxes.

The group is being led by the National Association of Wholesaler-Distributors, which was also involved in similar tax fights in previous administrations. The coalition says that tax increases called for by Biden and Democratic leaders in Congress “would stall the economic recovery rather than fuel it and counteract the economic benefits of smart infrastructure spending.”

While declining to say how much money it plans to raise for the effort, a source close to the group said it was “expecting to engage in a robust paid advertising, grassroots effort and earned media in a number of key states represented by moderate House and Senate Democrats who hold the keys to this effort.”

Organizations that have joined the coalition include the American Hotel and Lodging Association, Associated Builders and Contractors, Independent Insurance Agents and Brokers of America, National Grocers Association and the Main Street Employers Coalition, plus about two dozen more.

“The record tax hikes that Democrats are seeking to ram through could not come at a worse time for America’s job creators who are just beginning to recover from a crippling pandemic,” said Eric Hoplin, president and CEO of the National Association of Wholesaler-Distributors. “Employers support smart infrastructure to ensure America’s 21st century competitiveness, but it shouldn’t be used as a Trojan horse to enact record high taxes on America’s individually and family-owned businesses.”

HEADS UP, DEMS

Justice Department appeals ruling on Trump-Mueller memo​

This will make some Democrats very unhappy: The Justice Department late Monday filed an appeal of a federal judge’s ruling saying it must release in full a March 2019 memo on whether former President Donald Trump had obstructed justice during the Russia inquiry.

The Justice Department has now agreed to release part of the Office of Legal Counsel memo — which former Attorney General William Barr claimed he used in his decision not to charge Trump following special counsel Robert Mueller’s probe —  but wants time to appeal U.S. District Judge Amy Berman Jackson’s ruling.

AP: 

U.S. District Judge Amy Berman Jackson earlier this month ordered the Justice Department to release the entire March 2019 memo as part of a public records lawsuit from a Washington-based advocacy organization. She said the department, under Attorney General William Barr, had misstated the purpose of the document in arguing that it was legally entitled to withhold it from the group, Citizens for Responsibility and Ethics in Washington.

In a motion filed late Monday, the deadline for deciding whether it would comply with the judge’s decision or appeal it, the Justice Department said that it continued to believe even that the full document should be exempt from disclosure.

Though the department agreed to release one section of the document, the lawyers asked Jackson to put her order on hold to give a federal appeals court a chance to review the ruling. 

More:

The department said the decision before the attorney general was not whether to prosecute Trump since the indictment of a sitting president is precluded by longstanding Justice Department policy. Rather, the question that the memo set out to address was whether the facts gathered by Mueller could warrant a criminal case. That question, the government says, was a genuine decision that had to be made.

“The Attorney General’s determination on that point — and on what, if anything, to say to the public about that question — undoubtedly qualifies as a decision, even if it could not have resulted in an actual prosecution of the sitting President,” Justice Department lawyers wrote.

“There was no legal bar to determining that the evidence did or did not establish commission of a crime, a determination the Attorney General made and announced,” they added.

MOMENTS

10:15 a.m.: President Joe Biden and VP Kamala Harris will receive the daily intelligence briefing.

10:30 a.m.: Anthony Fauci will testify in front of an appropriations subcommittee.

12:30 p.m.: Jen Psaki will brief.

1:30 p.m.: Biden and Harris will meet with George Floyd’s family. … The Covid response team will brief.

2 p.m.: Senate Democrats and Republicans will speak after their respective party lunches. Expect Republicans to talk about the economy, and lean in a bit to their opposition to the Jan. 6 commission. 

5:55 p.m.: Biden will leave the White House for Wilmington, Del. He will arrive at 6:50 p.m.

8:10 p.m.: Biden will leave Wilmington for the White House.

CLIP FILE

NYT

→ “Democrats, Once Outraged, Take a Quieter Approach to Migrant Children,” by Eileen Sullivan: “House Democrats, who led an angry charge against the Trump administration’s treatment of migrant children, have taken a much quieter tack since concerns began emerging about conditions at some of the emergency shelters set up by the Biden administration to deal with minors at the southern border.

“Where once only Twitter assaults and dressing-downs at House hearings would suffice, Democratic lawmakers are voicing worries privately to administration officials and the small staff at the Department of Health and Human Services, which oversees the care. If problems persist, the lawmakers say they call again.”

→ “Biden Under Pressure Over ‘Public Health’ Border Expulsions,” by Zolan Kanno-Youngs: “ President Biden is coming under increasing pressure to abandon a Trump-era immigration rule that has sealed off the United States to most migrants during the pandemic, with human rights officials and two of the administration’s own medical consultants saying the measure endangers vulnerable families.

“The policy, known as Title 42, allows border agents to turn away migrants at the southern border without giving them a chance to apply for protections in the United States. The order justifies the expulsions as a health measure to prevent the coronavirus from spreading in holding facilities.”

WaPo

→ “‘My back is against the wall’: A flood of federal rental aid has been slow to reach those who most need it,” by Greg Jaffe in Decatur, Ill.

AP

→ “Blinken in Israel on Mideast tour to shore up Gaza truce,” by Joseph Krauss in Jerusalem

→ “It’s not just Arizona: Push to review 2020 ballots spreads,” by Kate Brumback and Nicholas Riccardi

Politico

→ “Rise in anti-Semitic incidents strains Democrats and GOP alike,” by Nicholas Wu and Andrew Desiderio

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