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PRESENTED BY

BY JOHN BRESNAHAN, ANNA PALMER AND JAKE SHERMAN
WITH MAX COHEN AND CHRISTIAN HALL

THE TOP

If you were looking for a case study about power in the United States Senate, last night was a pretty good example.

Just before midnight, after a day of marathon negotiations to expedite the passage of the bipartisan infrastructure bill, Senate Majority Leader Chuck Schumer announced that he was stymied and Republicans were blocking his efforts to speed up the process. 

Here’s Schumer:

“We’ve worked long, hard and collaboratively to finish this important, bipartisan bill. The Senate has considered 22 amendments during this process and we’ve been willing to consider many more. In fact, we have been trying to vote on amendments all day but have encountered numerous objections from the other side. However, we very much want to finish important bill, so we will reconvene Saturday at noon to vote on cloture [on the Sinema-Portman substitute amendment], and then we will follow the regular order to finish the bill.”

Just who was it that was forcing the Senate back in on Saturday for yet another procedural vote? Was it one of the traditional power centers of the chamber? A powerful committee ranking member? A possible 2024 presidential candidate?

No. It was Sen. Bill Haggerty, a freshman Republican from Tennessee who isn’t in play to vote for the legislation, yet wants to slow down the process. Here was his statement:

“Earlier this afternoon, the Congressional Budget Office released its long awaited score for this infrastructure bill. While we’ve heard for weeks that it would be paid for, it’s not. It didn’t just come up short, it came up a quarter of a trillion dollars short. The CBO indicated this bill will increase the deficit by at least $256 billion dollars when it was supposed to break even. Despite this news, I was asked to consent to expedite the process and pass it. I could not, in good conscience, allow that to happen at this hour—especially when the objective of the majority is to hurry up and pass this bill so that they can move quickly to their $3.5 trillion tax-and-spend spree designed to implement the Green New Deal and increase Americans’ dependence on the government so I objected.”

If you don’t remember, Haggerty was former President Donald Trump’s ambassador to Japan. In 2020, Haggery won the seat that Lamar Alexander held for nearly two decades. 

Haggerty’s opposition won’t block passage of the bill; it’ll just slow it down. 

“Tonight things just kind of got bogged down a little bit because there were a number of disagreements,” Senate Minority Whip John Thune (R-S.D.) said late Thursday (h/t to our bud, Emily Cochrane of the NYT.). “And when somebody doesn’t get their amendment, they put a hold on everything else. And we’ve seen this before, I mean it’s a frequent movie around here.”

So where does this leave us? The Senate will be in at noon Saturday for a cloture vote. Senate leaders will probably try to get another agreement to speed up the process, but any senator can block that again. Depending on how long opponents want to drag it out, the vote on final passage could be early next week. Yet it’s the Senate and it’s August, and things could happen a lot faster too. 

Following the last vote on the infrastructure legislation, Schumer plans to bring up the Democrats’ $3.5 trillion budget resolution, which Haggerty mentioned above. This could take several days to play out, but if all 50 Democrats hold together, they will pass that too. So that timetable could speed up. Again, it’s the Senate and it’s August. Senators want to go on recess at some point. But there has to be an agreement to shorten the process, and any one senator can block those.

All this point, the Senate has voted on 22 amendments during the debate over the bipartisan infrastructure bill — a massive amount for the chamber these days. Just noting, as we told you earlier this week, one of the most contentious issues has been the reporting requirements for cryptocurrency brokers — read CNBC about that here. The regulation of digital assets is going to be a massive issue for Congress for years to come.

The Coverage:

→ AP: “Senators struggle to amend, finish $1T infrastructure bill,” by Kevin Freking and Lisa Mascaro

Reminder: Approximately two dozen senators will travel this morning to Wyoming for the late Sen. Mike Enzi’s funeral.

DEBT LIMIT

Dem leaders consider debt limit options, including reconciliation

Top House Democrats are still actively considering a range of options to boost the debt limit this fall, including lifting it as part of a massive reconciliation bill that’s key to President Joe Biden’s legislative agenda, according to sources familiar with the discussions.

Their next move on the debt limit was debated extensively during a leadership conference call on Thursday between Speaker Nancy Pelosi and other senior House Democrats, said the sources. No final decision was made on which approach to take, but the reconciliation option was heavily discussed. Some Democrats are under the impression that the White House wants Congress to include the debt limit in a reconciliation package, but White House sources told us they’re not weighing in.

Refresher: Democrats have been vacillating about whether to include the debt limit in their upcoming $3.5 trillion reconciliation package. It’s the obvious move, because it allows them to lift the borrowing cap with a simple majority. 

And Senate Minority Leader Mitch McConnell has warned repeatedly — including again on Thursday — that no Republicans would vote for it, so Democrats should use reconciliation, which they can pass with 50 votes and Vice President Kamala Harris.

Democrats, however, have also toyed with attaching the debt limit increase to a must-pass government funding bill in late September, but that carries massive risk. The funding package will need 60 votes in the Senate in order to pass, so 10 Republicans would have to break with McConnell and vote for it. That seems exceedingly unlikely. 

Also, that kind of high-stakes showdown isn’t what the White House and Wall Street want to see as  the U.S. economy rebounds from the Covid-19 pandemic. Government funding expires Sept. 30. 

CBO estimates that the Treasury Department could exhaust its ability to borrow money to pay for government operations in October or November. Failure to increase the debt limit by that time — or even coming close to it — could provoke a repeat of the 2011 debt crisis, when the U.S. government’s credit rating was downgraded for the first time in history.

Because of the arcane rules of reconciliation, Democratic congressional leaders and the White House face a much earlier deadline than fall to decide how to proceed on the issue. If Democrats want to include a debt limit boost in the reconciliation package, they first have to put instructions in the budget resolution expected to hit the Senate floor next week. That would mean a party-line vote in the House and Senate that has to be carried by Democrats alone. Some Democratic moderates believe a partisan vote to boost the debt limit could expose them to political attacks in the 2022 midterm elections. The battle for control of Congress is already looking bad for the Democrats. 

In addition, because of Byrd Rule requirements in the Senate, approving a debt limit increase could potentially mean voting to raise that threshold by a fixed amount — say several trillion dollars, enough to last until 2023 — rather than a suspension of the debt limit for a certain period of time, as has become normal practice. Again, that action carries its own political risks for Democrats. 

Yet there are so few precedents for increasing the debt limit via reconciliation — the last time this was done was 1997, according to the Congressional Research Service —  the decision on exactly how it could be implemented is up to the Senate parliamentarian. A dust up with the parliamentarian is also something Democrats don’t want to see.

THE FINAL INSTALLMENT OF THE BOUNCEBACK … COMING TUESDAY

We’ve taken you behind the scenes of Miami’s Mayor Francis Suarez, San Francisco’s Mayor London Breed, Oklahoma City’s Mayor David Holt, and Colorado’s Governor Jared Polis.

On Tuesday, we bring you our fifth and final installment of The Bounceback focused on North Carolina’s Democratic Gov. Roy Cooper. 

Like many states, North Carolina was hit hard by Covid-19. In the wake of the pandemic, Cooper worked to help small and minority-owned businesses that were left out of the federal Paycheck Protection Program. He also encouraged manufacturers to shift to making much-needed PPE and pushed to get companies to relocate to the region.

Coming Tuesday.

JOBS DAY

"Wild card" jobs day for Biden

It’s the first Friday of the month, so it’s jobs day in Washington. President Joe Biden will speak about the jobs numbers before decamping for Delaware for the weekend. 

CNBC on the estimates:

The economy is expected to have added about 845,000 payrolls in July, according to Dow Jones consensus estimate, as America’s workforce gradually rebuilds from its sharp pandemic-induced job losses.

But the uncertainty of Covid — spreading again at a rapid pace — has become a wild card for the labor market, just as it has for the broader economy. The rate of new infections in the U.S. is edging toward 100,000 per day, faster than last summer when there were no widely available vaccines.

Wall Street forecasts are wide-ranging for the July employment report, which is slated for release Friday at 8:30 a.m. ET. Wilmington Trust economists, for instance, expect just 350,000 payrolls, while Jefferies economists predict 1.2 million jobs were added.

“The range is 1.2 million to 350,000. That just tells you there’s very little confidence in those numbers,” Wells Fargo director of rates strategy Michael Schumacher said.

JOB MOVE

Heinrich to the White House for Fox News

Jacqui Heinrich, who has been reporting on Capitol Hill for Fox News, is moving over to the White House. Heinrich is a pal of ours and we’re sad to see her move over to covering the executive branch. Here’s Deadline’s Ted Johnson on the move. 

MOMENTS

9:30 a.m.: President Joe Biden will get his intelligence briefing.

10:30 a.m.: Biden will speak about the jobs report.

12:30 p.m.: Biden will leave for Wilmington, where he’ll arrive at 1:25.

1 p.m.: Jen Psaki will brief.

2:15: Biden and Vice President Kamala Harris will get their economic briefing virtually.     

CLIP FILE

NYT

→ “How Biden’s E.V. Plan Could Help Tesla and Squeeze Toyota,” by Jack Ewing and Neal E. Boudette

→ “Justice Dept. to Investigate Phoenix Police,” by Mike Schmidt and Tim Arango

→ “Abbott Sets Up New Voting Showdown With Absentee Texas Democrats,” by Nick Corasaniti and David Montgomery 

WaPo

→ “Biden administration considers withholding funds and other measures to spur vaccinations,” by Annie Linskey and Tyler Pager

→ “​​Peter Doocy and Jen Psaki’s daily clashes have become a White House briefing room ritual,” by Paul Farhi

WSJ

→ “Business Groups Call on Biden to Restart Trade Talks With China,” by Bob Davis

AP

→ “US likely enjoyed hiring spree in July as economy rebounds,” by Paul Wiseman

→ “Potential military vaccine mandate brings distrust, support,” by Julie Watson

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Editorial photos provided by Getty Images