Democrats face the challenge of trying to allow room for Biden and his team to cultivate relationships with GOP lawmakers to advance his tax proposals and other measures in routine bills, while also coming up with a pragmatic way to salvage his pandemic relief plan if both parties remain at odds.
Several senior Democrats said a reconciliation bill would be developed on a separate track, for now, as the new administration looks to continue talks with both parties aimed at advancing Biden's American Rescue Plan as an ordinary bill. If negotiations lose traction, they predicted Democrats would pivot to a reconciliation bill, which could pass the evenly divided Senate by simple majority vote, with a possible tie-breaking vote by Vice President Kamala Harris.
Sen. Chris Coons, D-Del., a close ally of Biden's, predicted the president and his team would try to follow up on a series of 2020 bipartisan deals to counter fallout from COVID-19, the respiratory disease caused by the novel coronavirus.
For example, the two sides worked together on the $2.2 trillion Coronavirus Aid, Relief and Economic Security Act last March and cut a deal on a $900 billion pandemic response package in the Consolidated Appropriations Act in December.
"President Biden is committed to making every effort to return to what we call in the Senate regular order," Coons told Law360.
"I would expect his first major bill will move through that path. I am very hopeful our Republican colleagues will consider it seriously and support it," Coons said, referring to Biden's pandemic blueprint.
He said Biden would have a chance to attract support from Republicans as he and other administration officials pitch his plan and other stimulus measures in the coming weeks.
While supporting another round of bipartisan pandemic relief talks, Sen. Ron Wyden, D-Ore., the top Democrat on the Senate Finance Committee, and several other senior Democrats made clear they would look for ways to salvage key parts of Biden's pandemic plan if negotiations do not make headway.
They said a reconciliation bill would be needed if it became clear that an ordinary bill containing Biden's plan would not draw support from at least 60 senators — 10 Republicans plus all 50 members of the Democratic Caucus — to cut off filibusters.
"We'll give Republicans a chance to come together and work something out. But needs are urgent. People are hungry. So, of course, you will use all of the tools," Wyden told Law360.
On the other side, GOP lawmakers have pushed to shrink the size of the package, while urging Democrats to allow more time to gauge the economic impacts of prior relief measures and vaccinations. Key players on both sides said there could be delays as both parties continue to squabble over procedural issues in the Senate, including potential efforts by some liberals to curb filibusters in order to expedite tax proposals and other measures by changing Senate rules.
Although Senate Minority Leader Mitch McConnell, R-Ky., relented late Monday on his demand that Democrats promise not to end the filibuster, thus allowing reorganization of the Senate under Democratic control, the filibuster remains in place.
Sen. Mike Crapo, R-Idaho, in line to be the top Republican on the Finance Committee, criticized the Biden plan's focus on broad relief measures and called instead for targeted incentives to help businesses and workers deal with the pandemic's economic effects.
"We can do the kind of things that need to be done without reconciliation," Crapo told Law360.
While opening the door to negotiations, Republicans have pushed back against Biden's incentives for working families, including a proposal to temporarily expand the child tax credit from $2,000 to $3,000 and make it fully refundable. They also have argued against two other temporary tax measures in the plan: an expanded earned income tax credit for workers without children and a child and dependent care credit for 50% — rather than 35% — of employment-related care expenses.
Crapo and other Republicans have raised concerns that proposals to expand such individual tax incentives temporarily were updated versions of long-standing Democratic priorities and were not tailored to address specific pandemic-related needs.
"We need to be putting our resources into fighting the pandemic and helping those who have been impacted, individually or in businesses," Crapo said.
In lieu of such measures, Republicans have pitched incentives to help businesses cover pandemic-related costs and to boost hotels and restaurants, including a possible expansion of the newly enacted allowance for 100%, rather than 50%, business meal deductions. They also have pushed to extend temporary items in the 2017 Tax Cuts and Jobs Act, including full expensing for equipment and qualified business property, now set to be phased down after 2022 and ended after 2026.
Reconciliation bills have been used by both sides to push through big-ticket items such as tax-related parts of the 2009 health care overhaul and the 2017 tax overhaul. But such bills must focus on taxes and spending, because any provision with an incidental, or minor, fiscal impact can be torpedoed by a Byrd rule point of order, which can be waived only by a 60-vote Senate majority under the 1974 budget law.
In light of such restrictions. Sen. John Cornyn, R-Texas, a former GOP whip and a member of the Finance Committee, said he doubted that a reconciliation bill would be a viable vehicle for Biden's plan, since it would likely omit some items, such as a plan to raise the hourly minimum wage to $15 from $7.25.
"The whole idea of reconciliation is to deal with budgetary matters and not to try to pass a bunch of legislation," Cornyn said. "I think procedurally they would have a lot of problems getting that done."
For their part, several senior Democrats said they were continuing to explore several different options for moving Biden's plan. If a reconciliation bill is used, they said, some parts of Biden's plan such as the proposed minimum wage hike could be moved in separate legislation.
House Majority Leader Steny Hoyer, D-Md., said Democrats in both chambers would huddle with administration officials and try to develop a strategy for moving Biden's pandemic response plan, either by using an ordinary bill or a reconciliation bill. "With reconciliation, there are some constraints to it: what you can and cannot do," Hoyer told Law360.
With such restrictions in mind, House Budget Chairman John Yarmuth, D-Ky., said he believed Democrats would begin by trying to move Biden's plan as an ordinary bill, and then look to develop a reconciliation bill as an alternative pathway for tax measures and other items, if needed. "You could do it sequentially," Yarmuth told Law360.
Yarmuth said Democrats ultimately may opt to do two reconciliation bills to advance tax priorities, which could be outlined in two separate budget resolutions, one for fiscal 2021 and another for fiscal 2022. Yarmuth and House Ways and Means Chairman Richard Neal, D-Mass., said such reconciliation bills could contain pandemic relief, stimulus measures, and incentives for infrastructure and renewable energy.
"We can do two this year," Yarmuth said.
--Editing by Robert Rudinger and Leah Bennett.
Update: This story has been updated with McConnell's yielding on his demand for a promise on the filibuster.
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