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PRESENTED BY

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

THE TOP

New: Treasury Secretary Janet Yellen will tell Congress today to lift the debt limit using “regular order,” which means not through a reconciliation bill, according to a statement Yellen will release later today. Here is the statement.

This is a big deal because Senate Democrats are going to release their $3.5 trillion budget resolution this morning, and if they want to lift the debt limit using this parliamentary procedure, they would have to include instructions for that in the resolution. A reconciliation bill can’t be filibustered and requires only a simple majority to pass, which makes it an attractive vehicle to lift the nation’s borrowing limit.

The Biden administration hasn’t taken a public position on the issue yet, so it’s big for Yellen to say this now.

Even more importantly, Senate Majority Leader Mitch McConnell has repeatedly warned Democrats in recent weeks that they should include the debt-limit increase in a reconciliation package because Republicans won’t vote for it. McConnell has said he is concerned about the Democrats’ spending and tax plans — it’s relatively common for Republicans to oppose debt ceiling hikes when Democrats control the White House.. If Democrats include the debt language in a must-pass spending bill in September — which looks like it may happen now — there’s a good chance that legislation will get blocked by the GOP, triggering a major showdown over the debt and government funding. The current national debt is well over $28 trillion.

Here’s Yellen: 

“In recent years Congress has addressed the debt limit through regular order, with broad bipartisan support. In fact, during the last administration, Democrats and Republicans came together to do their duty three times.

“Congress should do so again now by increasing or suspending the debt limit on a bipartisan basis. The vast majority of the debt subject to the debt limit was accrued prior to the Administration taking office. This is a shared responsibility, and I urge Congress to come together on a bipartisan basis as it has in the past to protect the full faith and credit of the United States.”

Sen. Bernie Sanders (I-Vt.), who chairs the Budget Committee, told us on Sunday night in the Capitol that he plans to release the budget resolution this morning. But we’re going to read tea leaves here. We asked Sanders if he’d made any decisions on the debt limit, and he answered by saying the budget would be out Monday. That’s an interesting way to answer.

OVERTIME

Notes from a Sunday night session

→ It seems as if the vote count for the bipartisan infrastructure bill is growing. Sen. Roger Wicker (R-Miss.) and Sen. John Cornyn (R-Texas) both voted last night for a pair of procedural motions to advance the bill. Wicker has announced his support for the legislation, but Cornyn has not yet said how he will vote. Voting for procedural motions like this is a pretty good tell that you are going to be supporting this legislation. There were 69 yes votes for a procedural motion to accept changes that have been made for the bill — that’s represents a new high watermark of support. Sixty-eight senators voted for cloture. However, Sen. Todd Young (R-Ind.), who worked with the G22 group and has been a “go-to Republican” for Democrats on some bipartisan issues this year, will vote no on the infrastructure bill. 

Young said the CBO score finding the bipartisan bill will increase the deficit by $256 billion over the next decade was the deciding factor. He also said Democrats have linked the infrastructure bill’s passage to their $3.5 trillion budget resolution, and that’s caused him concerns. “Having reviewed the Congressional Budget Office’s (CBO) estimated fiscal impact of this legislation as currently constructed, and frankly still not being comfortable with a number of the Democratic priorities contained in this version, I will vote ‘no,’” Young announced in a statement Sunday night.

→ Here’s a question that’s bouncing around Senate circles: Will the Senate vote to pass the infrastructure bill at 4 a.m. Tuesday morning? That’s the earliest the chamber can vote on final passage for the $1 trillion measure, if there’s no agreement to speed things up. 

But Schumer can try to get consent to move the vote to a more rational time, let’s say 11 a.m., for instance. But as we saw over the weekend, any one senator can block a time agreement. So we won’t believe that will happen until it happens.

Schumer plans to move right into the debate over the budget resolution as soon as the infrastructure bills passes. There’s 50 hours of debate divided equally between both sides, and then a “vote-a-rama.” 

The big question here procedurally is how much of the 50 hours are used before the voting starts. We expect Democrats will only use a portion of their time. How much Republicans use is unclear. A lot of Republicans are likely to want to make speeches in opposition to the Democrats’ resolution, so they may use up a big chunk of the GOP time. Maybe all of it. 

And there’s no formal time limit on a vote-a-rama, although the two parties usually work out a unanimous consent agreement on what amendments will be voted upon and in what order.

The Coverage:

→ NYT: “Senate Works on Infrastructure ‘the Old-Fashioned Way’: Painfully Slow,” by Emily Cochrane and Luke Broadwater

→ AP: “Senators on left, right hold together to push infrastructure,” by Lisa Mascaro

LOOKING AHEAD

The House’s dilemma

We’ve long thought — and we’ve written — that the conventional wisdom about the prospects of President Joe Biden’s legislative agenda is a bit flawed as it doesn’t take into account the extraordinarily tricky and complex politics in the House Democratic Caucus.

Take for example this letter, which is circulating within House Democratic ranks right now. This was penned by Democratic Reps. Josh Gottheimer (N.J.), Ed Case (Hawaii), Jared Golden (Maine), Kurt Schrader (Ore.), Vicente Gonzalez and Filemon Vela of Texas, all moderates. This letter makes two critical points: first, these moderates want Speaker Nancy Pelosi to bring the infrastructure bill up for a vote as soon as the Senate passes it; secondly, they seem a bit squeamish about the price tag for the Democrats’ upcoming $3.5 trillion budget resolution. This budget resolution — once it passes both chambers — sets Congress on a path to passing big chunks of Biden’s American Jobs Plan and American Families Plan using reconciliation, meaning a simple majority vote. So it’s critical to the White House, to say the least.

This newest letter is an updated version of a similar letter sent in mid-July by the same basic group — they want a vote on the bipartisan infrastructure bill asap.

However, Pelosi has made abundantly clear that she won’t bring the bipartisan infrastructure bill up until the Senate passes a reconciliation package. That’s not likely to happen until October or November. This isn’t a matter of choice for Pelosi but a recognition of the political reality in the House. Pelosi needs to keep both moderates and progressives happy while ensuring that both factions vote for both measures — or at least enough of them in the case of the infrastructure bill. Any misstep could mean that neither measure passes, which would be a disaster for Biden and Democratic congressional leaders.

But here’s what’s important to remember — Progressives aren’t going to vote for the Senate bipartisan infrastructure bill without seeing the rest of the agenda, meaning the reconciliation package. Moderates will likely cave and vote for the bipartisan infrastructure bill whenever it comes up — we know it and they know it. Moderates like this bill. Whereas progressives are fine passing the infrastructure portion, as long as they know what’s coming down the pike.

There may be some Republican votes for the infrastructure bill — especially among the Problem Solvers Caucus that Gottheimer co-chairs, provided the House doesn’t change the legislation. That will give Pelosi and the moderates some wiggle room on that bill that doesn’t exist on the budget resolution, which only Democrats will support. In that case, every Democratic vote will be needed.

“AOC needs Gottheimer more than Gottheimer needs AOC,” is how a Democratic aide put it, referring to Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Gotthheimer, two of the standard bearers for the progressive-moderate split among House Democrats.

So Pelosi is going to move ahead and dare either faction to vote against either the bipartisan infrastructure bill or the budget resolution. Pelosi won’t change her path unless she needs to do so. We also expect to see Biden leaning in here a lot more in the coming weeks. He’s got as much at stake as Pelosi or Senate Majority Leader Chuck Schumer. 

Yet Gottheimer’s letter does raise some red flags for the House leadership. Remember, there are three steps after the infrastructure bill passes the Senate.

1) The Senate needs to pass a budget resolution. 

2) The House needs to pass a budget resolution.

3) Both chambers need to craft and pass a reconciliation package.

This group of moderate Democrats says they’re now worried about the budget resolution. It’s worth recalling that the budget resolution will just include general instructions to the House and Senate committees that draft the reconciliation package; it doesn’t tell them how to achieve these goals. So the moderates want more details on what the committees are planning before they vote on a budget resolution. This is a huge ask, and it’s not going to happen. But it tells you what moderates are concerned about heading in this fight.

“Separately, as we begin the reconciliation process, we have concerns about the specific components of the potential package,” the moderates write. “Before the House adopts a budget resolution, Members of Congress should be able to review a detailed scope of the spending levels and revenue raisers. These specifics are crucial, given the combined threat of rising inflation, national debt, and the trillions recently, and appropriately, allocated to the Covid-19 emergency. We must also have the national resources to respond to any new waves of the pandemic.”

ENDLESS SUMMER

Why the House may come back at the end of August

Speaker Nancy Pelosi and House Majority Leader Steny Hoyer have not announced when the House will come back to vote on the Democrats’ $3.5 trillion budget resolution — assuming it passes the Senate — but it’s starting to feel like the week of Aug. 23 may be right.

No final decision has been made on this, so everything here is tentative. Nothing is final until Pelosi and Hoyer announce it.

The Senate is expected to finish with the budget resolution this week. And when we say week, we use that term loosely. Could be this week, could be the weekend.

The House has been gone from Washington since July 30. There’s no floor votes scheduled until Sept. 20. Pelosi and Hoyer warned members they may call the chamber back if there’s any pressing business. And passing a budget resolution would be pressing business. Waiting until the week of Aug. 23 would allow members time to adjust their schedules.

The important issue is the earlier they pass the budget resolution, the earlier they got done on reconciliation. Any time picked up here is time gained in the fall.

We could also see a vote on H.R. 4, the John Lewis Voting Rights Act, that week, according to Democratic sources. Pelosi and House Majority Whip Jim Clyburn (D-S.C.) have been pushing to this issue, and with H.R. 1 — the For The People Act — stalled in the Senate, this more narrowly tailored legislation may at least get all 50 Senate Democrats on board, although it still faces a GOP filibuster.

MOMENTS

President Joe Biden is in Delaware today. The Senate is in session, but does not have any votes scheduled. 

10 a.m.: Biden will get his intelligence briefing.

CLIP FILE

NYT

→ “As Afghan Cities Fall to Taliban, Brutal New Chapter Unfolds,” by Christina Goldbaum, Najim Rahim, Sharif Hassan and Thomas Gibbons-Neff in Kabul.

→ “Kathy Hochul, Cuomo’s No. 2, Quietly Prepares to Step Into the Limelight,” by Dana Rubinstein

→ “J.D. Vance Converted to Trumpism. Will Ohio Republicans Buy It?” by Trip Gabriel

WaPo

→ “Humans have pushed the climate into ‘unprecedented’ territory, landmark U.N. report finds,” by Brady Dennis and Sarah Kaplan

→ “​​Melissa DeRosa, top aide to Cuomo, resigns in wake of state attorney general’s report,” by Josh Dawsey

WSJ

→ “Companies Thought They Had Plans for Fall. Now They Are Scrapping Them,” by Chip Cutter

Politico

→ “Tim Scott quietly builds a mega-millions political operation" by Alex Isenstadt

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