The Case for (and Against) a ‘Skinny’ Infrastructure Deal

Deal or no deal? Photo: T.J. Kirkpatrick/The New York Times/Bloomberg via Getty Images

Joe Biden’s dream of a bipartisan deal on infrastructure may soon become a reality — and plunge his party into turmoil.

Just days ago, I dismissed the ongoing negotiations between “moderate” Senate Republicans and the White House as a charade. And not without reason. Despite weeks of talks, the parties still hadn’t reached an agreement on the definition of infrastructure, much less how much to invest in it. And although it was plausible that Biden might trim his sails — and accept a “skinny” package of conventional road-and-bridge projects agreeable to Republicans and Democrats alike — the question of financing remained an insuperable obstacle: The White House insisted on “paying for” its package with tax hikes on the wealthy, while Republicans had produced no financing scheme that at least ten GOP senators would support (and any bipartisan deal would require ten Republican votes to overcome a Senate filibuster).

But now, there are murmurs that Senate Republicans may be willing to paper over these divisions with new Treasury bonds. As Axios reports:

Some Senate Republicans might agree to add to the national debt to pay for a scaled-back infrastructure plan, senators and aides told Axios — one more grasp at a deal with President Biden before Democrats pack up and go it alone … Deficit spending “could be part of the discussion,” Sen. Lisa Murkowski (R-Alaska) told Axios. “It would be for what we would consider to be the hard infrastructure: the roads, bridges, the ports … Is it something that is on the table? I think that’s probably accurate to say.”

Sen. Josh Hawley (R-Mo.) said, “My strong preference would be for it to be paid for. But you know, if they have another proposal, I won’t dismiss it out of hand.”

Democrats and Republicans striking a deal to raise taxes and increase spending would be anomalous, but the parties agreeing to debt-finance a package of mutually tolerable appropriations is a routine occurrence on Capitol Hill. Thus, if deficit spending is on the table, a compromise may actually be in the offing.

And this isn’t the only development that augurs favorably for a deal. For one thing, the Senate GOP’s counteroffer has reportedly risen to $1 trillion (though it’s not clear that ten Senate Republicans support that figure, nor how much of that sum reflects the reallocation of previously appropriated stimulus funds). More critically, the Washington Post reports that Joe Manchin is working with a small group of his Republican colleagues on a backup plan should talks between the White House and Senate Republicans fall through.

This suggests that — should the administration decide to reject the GOP’s offer and pivot to pursuing a partisan infrastructure bill through budget reconciliation — Manchin may be willing to follow Biden’s lead. To this point, the White House has driven a hard bargain in negotiations with Republicans. The administration has brought its top-line number down from $2.3 trillion to $1.7 trillion, but it has refused to cleanse all climate and social spending from its package despite demands from both Senate Republicans and Manchin for a bill focused narrowly on conventional infrastructure. The current White House offer retains a $400 billion investment in at-home elder care and plenty of funding for green projects.

By contrast, the backup plan Manchin is negotiating with Mitt Romney and Susan Collins, among others, would reportedly leave out elder care and Biden’s plan to build 500,000 electric-vehicle charging stations. Given that such an investment in electric vehicles is plainly a form of infrastructure investment — and one of the least controversial climate policies imaginable — it’s all but certain that the Romney-Manchin “skinny” deal would exclude Biden’s proposals for ending federal subsidies to fossil-fuel companies and electrifying the school-bus fleet.

The White House had set Memorial Day as a deadline for bipartisan negotiations; if no deal is reached by that point, the administration has signaled that it would pursue a budget-reconciliation bill. Now, the administration is reportedly willing to extend that deadline by a couple of weeks. But soon enough, Biden and his party are likely to face a presidency-defining decision: accept some kind of “skinny” bipartisan deal on infrastructure — with the hope of passing the rest of Biden’s infrastructure and climate investments in a subsequent bill — or else call Manchin’s bluff and proceed directly to reconciliation.

It remains possible that there won’t be ten Republican votes for whatever compromise the White House manages to reach with Senate Republicans, or that centrist senators manage to reach among themselves. But Manchin is signaling that he will take a half-loaf, even if the administration won’t. In that circumstance, Biden and congressional progressives will need to decide whether to play chicken with Manchin and his fellow moderates. After all, with the House narrowly divided, “the Squad” can kill an infrastructure bill just as easily as Manchin can.

The case for accepting a skinny deal goes something like this: Biden can’t pass his agenda without the cooperation of every single moderate Democrat in the Senate and damn near every moderate Democrat in the House. Perhaps once these moderates secure their bipartisan merit badges (by putting their names on a skinny infrastructure bill), they’ll feel more comfortable helping Biden pass the rest of his agenda through partisan reconciliation bills. If that’s so, then taking the skinny compromise may be the ideal course of action. Centrist Democrats get anxious about deficit spending, and that anxiety threatens to constrain the scope of Biden’s plans for climate and social investment. If Republicans are willing to give Democrats cover on deficit financing conventional infrastructure — thereby allowing the party to save its limited supply of Manchin-approved tax increases for funding the rest of Biden’s agenda — then cutting a “skinny” deal today may actually expand the total amount of public investment Biden will ultimately be able to enact. Add to this the fact that bipartisanship, as an abstract concept, is popular with swing voters, and getting to yes starts to look like a no-brainer.

But there’s also a strong case for saying, so to speak, “the fat way or the highway”: If a bipartisan infrastructure deal is reached, moderate Democrats can’t be trusted to back future reconciliation bills on climate and social welfare. Manchin’s fetish for bipartisanship and Senate comity may render him reluctant to betray his Republican negotiating partners by helping Biden pass policies they explicitly rejected. Vulnerable moderates in the House, meanwhile, may like the idea of running for reelection on the message that “I supported the bipartisan law that helped fix your roads, then served as a check on excessive spending.” Yet Manchin knows he has a once-in-a-lifetime opportunity to deliver massive federal investment to his impoverished home state. And no moderate Democrat wants to enter the midterms without any major legislative victories to their name, save a single stimulus package. Thus, agreeing to a skinny bill wouldn’t placate the moderates; it would merely cost Biden his leverage over them. The best way to secure Manchin’s cooperation for the president’s full agenda would be to make him blink: Throw all of Biden’s spending proposals — conventional infrastructure, climate investment, the child allowance, universal pre-K, elder care, etc. — into a single reconciliation bill and dare the West Virginia senator to vote it down.

I have no idea which of these strategies is more likely to succeed. And it’s possible that Republican obstruction will ultimately save Biden the trouble of choosing between them. But if ten GOP senators rally behind a skinny deal, the Democratic leadership will need to decide whether its moderates are best tamed through carrots or sticks.

The Case for (and Against) a ‘Skinny’ Infrastructure Deal