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PRESENTED BY

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

THE TOP

Happy Tuesday. Sixteen days until the federal government shuts down. Thirteen days until the House’s deadline to pass the infrastructure bill. Six days until the House comes back into session. 

California’s gubernatorial recall election is tonight. There are plenty of great reporters on the ground in the Golden State. We suggest a subscription to the Los Angeles Times, a follow of Politico’s Carla Marinucci and Jeremy White, and WaPo’s Dave Weigel. The LAT’s Mark Z. Barabak has you covered, as well.

Back to Washington.

There are so many tripwires between now and the potential passage of President Joe Biden’s agenda, but here’s something interesting we noticed last night: The gulf between moderate and progressive Democrats seems to be widening by the minute.

Check this out: Sen. Jon Tester (D-Mont.) told reporters that he wants “100%” of the reconciliation bill paid for by budgetary offsets. If you were wondering, that’s not in the cards at the moment. Tester wasn’t asked whether he would accept “dynamic scoring” to account for some of these offsets. The Montana Democrat certainly agrees there’s plenty of worthwhile issues to spend money on. He just doesn’t want to blow up the deficit even more.

And on the day after Sen. Joe Manchin (D-W.Va.) took to the Sunday shows to say $3.5 trillion is unacceptable, Sen. Bernie Sanders (I-Vt.) made it extraordinarily clear he won’t stand for lowering the price tag. 

Take it away, Bernie:

“We have a bill that is supported by an overwhelming majority of Democrats in the House and the Senate, and by the president of the United States. We struggled hard to pass the American Rescue Plan, which was enormously successful in helping us getting out of the economic decline caused by Covid. and I’m quite confident that at the end of the day, we’re going to be passing a $3.5 trillion reconciliation bill.”

Sanders was also asked whether immigration reform would be included in the reconciliation package. The Senate parliamentarian is considering this issue now, but reform advocates are pressing Senate Democrats hard as well. The House Judiciary Committee included a pathway to citizenship in their reconciliation markup late Monday night.

“We’re working on it!” Sanders said.

THE BIDEN AGENDA

The endgame: Reconciliation

OK, we’re going to project a bit about the endgame for the Democrats’ $3.5 trillion reconciliation package. Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer may not enjoy this. But everyone in town is asking how, when and whether the Biden agenda will get passed into law. It’s the subject of countless consultant calls with big companies, conversations in rank-and-file and leadership offices on Capitol Hill and in the leg and policy shops at the White House.

A couple thoughts up front:

→ Reconciliation could take a while to finish. We’ve heard some speculation suggesting Democrats may not be able to wrap this up until November or December. We’re not going there yet, but it’s hard to see how this could possibly happen in early October. 

Pelosi, in a “Dear Colleague” released Monday night, praised her committees for finishing their work by the Sept. 15 deadline, but then she counseled patience and unity:

“We are now prepared to continue negotiations with the White House and Senate to reach reconciliation on legislation that meets the everyday needs of the American people and that addresses the climate crisis. As you are aware, we have certain limitations in terms of Senate rules. But we have no limit to our vision to pass transformative legislation For The People.”

→ The House is still slated to take up the $1 trillion bipartisan infrastructure bill by Sept. 27. This was part of a deal Pelosi reached with Rep. Josh Gottheimer (D-N.J.) and the moderates. That’s a Monday, so voting may slide until the next day, Sept. 28. 

The very strong likelihood is that reconciliation won’t be done by then. So will progressives vote for an infrastructure bill they don’t love when the reconciliation package isn’t complete yet? Does Pelosi delay the infrastructure vote, which she can do unilaterally despite her agreement with moderates? Or does the House leadership let the infrastructure bill fail, and then bring it up again later on? Democrats are assuming they’ll get few, if any, House GOP votes here. Thus all this speculation is based on a package that only Democrats vote for. It’s a difficult scenario to game out right now. But the important thing to remember is reconciliation isn’t likely to be done by Sept. 27.

Let’s get back to the reconciliation endgame.

Based on current spending so far approved by the House committees, the Democratic package totals roughly $3 trillion in spending. This is going to continue to balloon, especially if the committee includes a fix to the state and local tax deduction limits in the Ways and Means Committee this week. The final package will be somewhere near the $3.5 trillion target. Maybe a little over. Or maybe a lot over if you ask some Senate Democrats, who privately say House Democrats are being reckless with the price tag.

The House Budget Committee is going to assemble the various pieces from the committees into one package. That’s set to happen next week. Budget can’t alter the committee provisions, although it can make recommendations on amendments. The panel will hold an up-or-down vote. Then it’s onto the Rules Committee.

Now this is where things get dicey on timing. We already know there’s going to be a manager’s amendment to the reconciliation package to fix or tweak various proposals in the package.

The bigger question is whether Pelosi holds onto the reconciliation legislation until a deal can be worked out with the Senate. When we say “Senate” here, we mean Sens. Joe Manchin (D-W.Va.), Kyrsten Sinema (D-Ariz.) and the other Senate Democratic moderates who want a much smaller reconciliation package overall. 

House Democratic leadership aides say their hope is whatever passes the House will also pass the Senate. But a negotiated agreement seems more likely. How long will those talks take? Weeks? Months? Or will the House vote on the package as is, wait to see if it’s altered by the Senate, and then take up whatever the Senate approves? That would be an uglier process, but doable. And that would mean two separate House floor votes: the House package and the altered Senate package.

What about this scenario floated to us: House and Senate Democrats reach a “deal” on reconciliation. The House passes it with just enough yes votes to get it over the finish line. Then it goes over to the Senate. Manchinema (or Sinemanchin, you choose) and the moderates demand more changes following another round of negotiations. The Senate passes the bill (50 “yes” votes on the nose, of course) and sends it back to the House. Do House Democrats just eat it after two rounds of negotiations dominated by Senate moderates? Again, this will be ugly with progressives. But something is always better than nothing. And the clock is ticking toward 2022.

Remember, Pelosi only has a three-vote margin to play with here, and two of those may be already taken up by Reps. Kurt Schrader (D-Ore.) and Jared Golden (D-Maine), according to Democratic insiders.

If we had to make a guess, we’d say Pelosi holds onto the House package until there’s a deal with the Senate, offers that agreement as a manager’s amendment in Rules and then takes it to the House floor. Tough, but she can make it work.

Again, no one in the House Democratic leadership is talking about this at all, they say it’s too early. Yet we get paid to think ahead based on our reporting, so we are.

Also: The House Energy and Commerce and Ways and Means panels hold critical reconciliation markups today. Ways and Means begins the first of two days of markups on its portion of reconciliation, which will include tax increases.

Energy and Commerce — after a marathon session yesterday that went past 2 a.m. — is back at 10 a.m. to finish its work. The panel didn’t get to its health title yesterday, meaning prescription drug pricing under Medicare is still unfinished. This is a huge issue, and Rep. Frank Pallone (D-N.J.) and Democratic leaders were scrambling for votes, as we told Premium subscribers in the PM edition. The leadership believes they’ve fixed this issue, but we’ll keep an eye on this.

AFGHANISTAN

Senate Dems ready defense for Blinken on "rough day"

Check out some of the headlines from Secretary of State Antony Blinken’s appearance in front of the House Foreign Affairs Committee on Monday to testify about the chaotic U.S. withdrawal from Afghanistan.

Politico: “Blinken lays blame on Trump as he defends messy withdrawal from Afghanistan” … Reuters: “Blinken defends Afghan withdrawal at testy U.S. congressional hearing” … CNN: “Blinken testifies on Afghanistan before House lawmakers angry about the war’s chaotic end” … WaPo: “Blinken clashes with Republican lawmakers over Afghanistan withdrawal”

Blinken is up for “Round Two” this morning in the Senate Foreign Relations Committee, where he’s likely to get an equally hostile GOP reception.

Sens. Robert Menendez (D-N.J.) and Jim Risch (R-Idaho), the Foreign Relations chair and ranking member, didn’t want to talk about what they expect during Tuesday’s session. 

But we caught up with Sens. Chris Murphy (D-Conn.) and Marco Rubio (R-Fla.), who both serve on Foreign Relations, to get a preview.

Murphy first. He predicted another “rough day” for Blinken. 

“Republicans are gonna attempt to erase the last 20 years by making it sound as if the only errors made in Afghanistan were in the last 30 days,” Murphy said. 

Murphy, of course, is the fifth-ranking Democrat on the panel and chairs the subcommittee that oversees Near East, South Asia, Central Asia, and counterterrorism, so he has expertise in this region of the world.

The Connecticutian (yes, it’s a real word, Jake promises us) had some choice words for his colleagues in both parties and their reactions to the Afghanistan debacle.

“I think it’s extraordinary that Republicans have gotten away with papering over the last 20 years in their complicity in it,” Murphy said of the situation in Afghanistan. “Democrats’ sort of reluctance to defend the administration is a gift to Republicans and war cheerleaders who want this country to forget about the disaster of the last two decades.” 

Now Rubio. Rubio is the number two Republican on Foreign Relations, as well as being the ranking member on the Intelligence Committee. He’s not buying the White House claim that there were no intelligence estimates predicting a rapid collapse of the Ghani government once President Joe Biden gave the withdrawal order.

“I hope [Blinken] doesn’t come in there and try to spin that the intelligence didn’t support the possibility of a worst-case scenario as a realistic situation,” Rubio said. “You can’t spin me on that.”

Rubio added: “I will say this to you — anyone who consistently read the arc of intelligence assessments from multiple agencies over the last six months could not have left with, at a minimum, that this sort of chaotic, rapid collapse was a distinct possibility. You would hope that would not be the direction it went, but you would be prepared.”

Blinken was a top aide on this Senate panel, so he has plenty of experience in understanding what these lawmakers want to hear. He’ll be up at 10 a.m.

NEW YORK x D.C.

AOC explains the “Tax the Rich” dress

New York Rep. Alexandria Ocasio-Cortez attended the Met Gala last night in Manhattan, and wore a dress with a message. Of course, lots of people pointed out that the Met Gala is a pricey event with lots of rich folks — almost all of whom were not wearing masks, by the way. That was the point AOC said she was trying to make: that she was promoting taxing the people she was hanging out with. 

MOMENTS

1:10 p.m.: President Joe Biden will leave Long Beach, Calif., for Denver. Karine Jean-Pierre will gaggle on Air Force One.

3:10 p.m.: Biden will land in Denver.

4:50 p.m.: Biden will visit the National Renewable Energy Laboratory.

5:30 p.m.: Biden will speak about his legislative agenda.

7:10 p.m.: Biden will leave Denver for D.C., where he’ll arrive at 10:10 p.m. He’ll be back at the White House by 10:20 p.m. … Vice President Kamala Harris will speak at a fundraiser for Terry McAuliffe at a private residence in Great Falls, Va.

CLIP FILE

NYT

→ “House Democrats’ Plan to Tax the Rich Leaves Vast Fortunes Unscathed,” by Jonathan Weisman and Jim Tankersley 

→ “Under G.O.P. Pressure, Tech Giants Are Empowered by Election Agency,” by Shane Goldmacher and Kate Conger

→ “Justice Dept. Imposes Limits on Oversight of Local Police,” by Katie Benner

→ “Iran Nears an Atomic Milestone,” by David E. Sanger and William J. Broad

 WaPo

→ “GOP condemnation of Biden coronavirus mandate fuels concern other vaccine requirements could be targeted,” by Felicia Sonmez, Marianna Sotomayor and Mariana Alfaro

→ “With big tax push, Democrats aim to tackle enormous gains of top 1 percent,” by Jeff Stein

WSJ

→ “Senate Republicans Vow to Block Treasury Nominations Until Nord Stream II Firm Is Sanctioned,” by Ian Talley and Brett Forrest

AP

→ “Biden turns to Colorado to pitch investments in clean energy,” by Alexandra Jaffe and Darlene Superville

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