Senate Democrats this week moved forward on their two-pronged approach to enact President Joe Biden’s policy agenda – a $579 billion bipartisan “physical” infrastructure package – and a separate $3.5 trillion package addressing “social” infrastructure. Both measures face steep hurdles in the narrowly divided Senate and House. (Wall Street Journal and BGov, July 15)

Two Tracks

• Senate Budget Committee Democrats agreed in principle on Tuesday to a $3.5 trillion spending increase for Biden’s wide-ranging social agenda that includes education, childcare and climate. (Reuters, July 13 and Roundtable Weekly story below)
  
  
• Separately, President Biden and a bipartisan group of senators on June 24 agreed on a framework to invest in “hard” infrastructure, including transit, roads, bridges and the electrical grid. (White House Fact Sheet and bipartisan Senate group framework, June 24)
  
  
• Senate Majority Leader Chuck Schumer (D-NY) stated last week that he plans to hold votes on both measures before the Senate leaves for its August recess. (AP and CNBC, July 9)

Bipartisan Proposal Deadline

• Schumer pushed his schedule forward by announcing the Senate will take a procedural vote next week to begin debate on the unfinished bipartisan proposal. The move forces a tight deadline on Senate negotiators to produce a detailed version of their bipartisan proposal, which has many unresolved issues, including funding sources. (Politico, July 15)
  
  
• Sen. Shelley Moore Capito (R-WV) said Schumer’s decision is an attempt “to put pressure on the group to either put up or shut up,” according to Politico.
  
  
• Sen. Lisa Murkowski (R-AK) said, “The good news-bad news is we’ve got a pretty tight time frame. There are details we have to resolve, and those details involve things like [paying for it].” (Washington Post, July 15)
  
  
• The bipartisan proposal, if translated into legislation, would need any combination of 60 votes in the 50-50 Senate to avoid a filibuster and start debate on the measure.

Budget Blueprint Directive

• Schumer also said he wants the Senate Budget Committee to agree by July 21 on the details of their separate 10-year budget blueprint, after they agreed this week to its overall $3.5 trillion spending level. (New York Times, July 15)
  
  
• The committee must now build support for a budget resolution, which would give fiscal targets to other Senate committees responsible for producing an eventual, final bill – including how taxes would be raised to pay for it.
  
  
• Senate Budget Committee Chairman Bernie Sanders (I-VT) commented this week, “What happens next is this is an enormously large and complicated piece of legislation and it’s going to take an enormous amount of work amongst 50 people to reach agreement.” (BGov, July 15)
  
  
• Passage of a budget blueprint would also mark the beginning of the reconciliation process, which would allow Democrats to pass an expansive economic package without Republican votes. (Bloomberg, July 15)

SALT Inclusion

• The Democratic budget outline may include a partial expansion of the state and local income tax deduction (SALT), according to Sen. Bob Menendez of (D-NJ), a member of the Senate Finance Committee.
  
  
• “My understanding is there is a SALT provision in there that would provide relief,” Menendez told NJ Advance Media. (NJ.com, July 15)
  
  
• Since the SALT deduction was capped at $10,000 in the Republican Tax Cuts and Jobs Act of 2017, Democratic lawmakers from high-tax states have urged the inclusion of a SALT expansion in longer-term fiscal packages.

Roundtable Perspective

• Roundtable Senior Vice President & Counsel Ryan McCormick, bottom left in photo, participated in the Avison Young July 14 webinar "Proposed Federal Tax Policy Changes." Additional participants included Lisa Knee and Kenneth Weissenberg of Eisner Amper.
  
  
• Roundtable Senior Vice President Chip Rodgers participated in the Association of Foreign Investors in Real Estate July 13 webinar “Mid-Year Policy Update.” Additional participants included Elizabeth Espín Stern, Partner at Mayer Brown and Hope Goldman, Senior Associate at The Cohen Group. (Watch video after entering the password “AFIRE!!”)

What’s Next

• President Biden yesterday commented on the dual track approach in the Senate. “There may be some last-minute discussion as to what mechanism is used to pay for each of these items, both the infrastructure package and the human infrastructure package. But I believe we will get it done.” (White House transcript, July 15)

In the House, Speaker Nancy Pelosi has pledged that the chamber will not move forward until the Senate passes a budget setting up the $3.5 trillion social spending package. (The Mercury News, June 25 and Transcript of Pelosi Press Conference, June 24)

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