After weeks of negotiations, the Senate passed a bipartisan infrastructure package Tuesday in a 69-30 vote that would provide about $1.2 trillion in funding to repair America’s rural roads, ports and waterways, while dramatically increasing high-speed internet access, improving the electrical grid and more. It was a historic moment, but the path forward is far from certain.
Early this morning, Senate Democrats also advanced a sweeping $3.5 trillion budget framework. The 50-49 party line vote sets in motion Democrats’ plans to make major changes in health care, education, immigration, and the nation’s tax laws, while also addressing climate change.
With slim margins in both the House and the Senate, Democrats will face difficult choices ahead as they work to transform the budget framework into a budget reconciliation package with detailed plans for spending and tax increases.
On final passage of the infrastructure bill, all 50 Democrats were joined by 19 Republicans, including Senate Minority Leader Mitch McConnell, R-Ky., advancing one of the key pieces of President Joe Biden’s economic agenda.
About $550 billion of the package is new funding (as opposed to reauthorized funding) and includes $110 billion in funding for roads and bridges and $65 billion to expand broadband. There is about $73 billion for clean power transmission as well as additional funding for ports and waterways and $66 billion for passenger and freight rail improvements.
The bill also includes $8.3 billion for Western water needs. Some $3.2 billion is allocated for aging infrastructure and $1.2 billion for water storage, groundwater storage and conveyance projects. The bill also would provide $618 million over five years for the Agriculture Department's watershed programs.
Getting to this point marks a major milestone- a strong bipartisan push for making the U.S. more competitive on critical infrastructure repairs and advancements, but the next steps could prove to be even more difficult.
“This is transformational. I know compromise is hard for both sides, but it’s important….it’s necessary — for a democracy to be able to function,” Biden said during a press conference after the Senate vote.
But immediately after passing the bipartisan package, the Senate began debating the budget resolution that prepares the way for drafting Democrats' even more ambitious $3.5 trillion plan for climate measures and domestic spending priorities. The budget framework directs committees to draft their shares of the reconciliation proposal by Sept. 15. For agriculture, there’s a lot of money at stake - dollars that could significantly impact the next farm bill - as well as tax increases that affect agriculture, including increases on capital gains and a border carbon tax.
Democrats on the Senate Agriculture Committee have started meeting privately to start carving up $135 billion in new spending that would be authorized by the budget resolution. "We're going to continue to have conversations and make sure that people both on and off the committee have a chance to express themselves," Chairwoman Debbie Stabenow, D-Mich. told reporters Tuesday. Senate Ag Democrats will be coordinating with their House counterparts in deciding how the $135 billion is spent, according to a congressional source familiar with the plans.
Republicans will have no input in how the funding is allocated, since they will not support the spending and tax plan Democrats are seeking to enact, Senate Minority Leader Mitch McConnell, R-Ky., "has made it clear that there would be no Republican votes" for the reconciliation bill, Stabenow said.
A vote-a-rama that ensued Tuesday in the Senate on amendments to the budget resolution provided a taste of the contentious debates ahead. Senate Republicans forced Democrats to go on the record on a series of issues, including protecting existing tax benefits when it comes to transferring farm assets from one generation to the next.
President Biden has proposed to start taxing capital gains at death, which would effectively nullify the benefit of stepped-up basis, and Sen. John Thune, R-S.D., forced a vote on an amendment that called for “preserving” current tax rules for transferring farms and businesses, including the “full benefit of the step-up in basis for assets acquired from a decedent.” Thune's amendment, which is non-binding, was adopted on a 99-0 vote.
Thune said the amendment "would provide permanent relief by preserving step-up in basis for all family owned businesses, farms and ranches.”
Senate Finance Committee Chairman Ron Wyden, D-Ore., insisted that “Senate Democrats take a backseat to no one standing up for family farmers, ranchers and small businesses. In fact, President Biden has made it clear that any changes to stepped up basis will provide durable protection for family farmers, ranchers and small businesses.”
Biden's proposal would defer, but not eliminate, the tax liability on farms and businesses for as long as they are in operation.
Stabenow, who is a member of the Finance Committee, said Democrats on the panel would be meeting next week to discuss their section of the reconciliation package. The committee in May advanced a package of energy tax incentives that could be made part of the reconciliation package, including a clean fuel tax credit.
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On Tuesday, the Senate also approved, 66-33, an amendment proposed by Sen. Joni Ernst, R-Iowa, that called for "prohibiting or limiting the issuance of costly Clean Air Act permit requirements on farmers and ranchers in the US or the imposition of new federal methane requirements."
"Our hardworking livestock producers should not have to worry about being subject to onerous regulations and increased production costs due to the federal permits or regulations," Ernst said. Senate Environment and Public Works Committee Chairman Tom Carper, D-Del., said the amendment wrongly implied that the Environmental Protection Agency was considering new regulations on farms.
Also adopted, 53-46, was an amendment sponsored by the Senate Ag Committee's top Republican, John Boozman of Arkansas, that called for barring the Agriculture Department from ending loans for fossil fuel power plants.
The future of the bipartisan infrastructure bill is unclear in the House, where Speaker Nancy Pelosi, D-Calif., has insisted that the budget reconciliation package must also be approved by the Senate before she’ll take both bills up in the House. A group of six moderate House Democrats are balking at that notion, suggesting that the Senate does not need to pass the larger and more partisan reconciliation measure before they vote on this infrastructure package.
“As soon as the Senate completes its work, we must bring this bipartisan infrastructure bill to the House floor for a standalone vote,” the lawmakers said in a letter. “This once-in-a-century investment deserves its own consideration, without regard to other legislation.
The House is expected to cut its August recess short and return to Washington the week of Aug. 23 to vote on the budget resolution, according to House Majority Leader Steny Hoyer, D-Md. If the House passes a budget resolution identical to the Senate’s, Democrats can move forward with budget reconciliation and pass legislation with a simple majority in the Senate rather than the 60 votes that are normally required.
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