U.S. Senate faces ‘hell of a fight’ amid doubts over infrastructure investments

© Reuters. FILE PHOTO: Senate Majority Leader Chuck Schumer (D-NY) speaks to news reporters following the announcement of a bipartisan deal on infrastructure, on Capitol Hill in Washington, U.S., June 24, 2021. REUTERS/Tom Brenner/File Photo

By Richard Cowan and Susan Cornwell

WASHINGTON (Reuters) – The U.S. Senate returned on Monday to one of its most ambitious agendas in years, with Democratic President Joe Biden seeking trillions of dollars in infrastructure spending and Republicans promising “a hell of a fight” against tax hikes to pay for it.

Senate Majority Leader Chuck Schumer opened the Senate following a two-week July Fourth recess, saying progress was being made on both a bipartisan $1.2 trillion infrastructure plan https://www.reuters.com/world/us/whats-us-senates-12-trillion-infrastructure-plan-2021-06-24 and the first step toward another measure that would pass with only Democratic votes.

But given the 50-50 split in the Senate, it was uncertain whether the Democratic leader could fulfill his goal of passing both measures through the chamber by sometime in August.

“If and when we succeed, the benefits will reverberate across the country for generations to come,” Schumer said.

Work continued on the bipartisan part of the package, which Biden has touted to voters, but the top Republican on the plan, Senator Rob Portman, told reporters he did not know when detailed negotiations would be completed.

Roy Blunt, a member of the Senate Republican leadership, said: “That would be a pretty amazing thing” if a bill winning the support of all Democrats could also capture the 10 Republicans necessary to push it to passage.

Last week, Schumer’s Republican counterpart, Mitch McConnell, promised a “hell of a fight” over the expected next phase of the process – a partisan, Democratic initiative – while leaving open the possibility of his support for the emerging bipartisan bill.

Negotiators were still discussing ways to finance the latter measure’s $1.2 trillion price tag https://www.reuters.com/world/us/democrats-set-24-hour-target-bipartisan-us-infrastructure-deal-2021-06-23, according to lawmakers and congressional aides.

Adding to the complexity, Congress could get embroiled in a potentially divisive debate over raising the statutory limit on U.S. borrowing authority, which expires at the end of July.

While the Treasury Department is expected to be able to manage for several weeks beyond the July 31 deadline, global financial markets will become increasingly jittery about a potential U.S. default on its debt the longer the matter is unresolved.

Democrats control both chambers of Congress by razor-thin margins and can afford to lose only a few votes in the House of Representatives and none in the Senate if they are to succeed.

They view the overall infrastructure package as potentially the most important legislation to push through before next year’s elections, which will determine control of Congress for the second half of Biden’s four-year term.

The bipartisan deal would pay for rebuilding roads, bridges and other traditional infrastructure projects and bring broadband internet service to more rural areas.

It got a boost last week from the “Problem Solvers Caucus,” a group of Democratic and Republican lawmakers.

McConnell said there was “a decent chance” the bipartisan bill could gain traction, but warned the spending must somehow be financed without adding to the national debt.

‘NOT THE RIGHT THING’

Speaking at public events in his home state of Kentucky last week, McConnell saved his grim assessments for tax hikes in the other infrastructure legislation Democrats are expected to produce in addition to the bipartisan bill.

“This is going to be a hell of a fight. … This is not the right thing to do for the country,” McConnell warned as he attacked Biden’s plans for possible tax increases on corporations and the wealthy to help finance the cost of some infrastructure investments.

Corporate lobbyists, in concert with Republicans, already were laying plans to thwart the initiative https://reut.rs/3AMBeKw, arguing that tax increases would hurt a U.S. economy emerging from the damage of the COVID-19 pandemic.

One measure, to be hammered out before the start of the August recess, would simply provide the technical framework for ramming through the Senate – without Republican support – a second, bigger infrastructure measure.

That Democrats-only plan would require a maneuver called “reconciliation https://www.reuters.com/world/us/us-senates-reconciliation-process-its-not-way-it-sounds-2021-06-16” that skirts Senate rules requiring 60 votes to pass most legislation.

The large package is set to be the final major piece of Biden’s first-year legislative aspirations: a partisan “human infrastructure” bill in the fall to invest huge sums to confront climate change, while expanding education opportunities across the United States and home healthcare for the elderly and others.

McConnell has attacked those initiatives and is hoping to generate opposition from some moderate Democrats.

Senate Budget Committee Chairman Bernie Sanders, a leading liberal, is looking for up to $6 trillion in new investments, while other, more moderate Democrats on his panel want less.

Sanders left a meeting with Biden on Monday telling reporters he would push for “the strongest possible legislation.”

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