Biden Faces Tougher Obstacles for Broad Relief Bill Sequel

President Joe Biden’s soon-to-be-unveiled longer-term economic stimulus package is set for far tougher obstacles in Congress than the pandemic-relief bill that’s on the verge of squeaking through without a single Republican’s backing.

The “build back better” program that the White House says will be announced after Biden signs the $1.9 trillion aid bill — heading for final passage as soon as Tuesday — will be far more expansive than its predecessor.

Spanning measures to address infrastructure, climate, health care, inequality and much more, and costing trillions of dollars over a decade, the initiative is far more complex. And Republican opposition to tax hikes will make it all the harder to fund the initiative.

Biden has the same three options as for his first package: go without the GOP on a bill that’s as expansive as moderate Democrats and Senate rules will allow, dramatically scale back ambitions to lure at least 10 Senate Republicans, or split the program up and pursue a combination of approaches.

At stake for Biden is achieving the kind of sustained, longer-term fiscal support for the economy that the Obama administration lacked in the wake of the last recession. The outcome could also determine whether the recent surge in Treasury yields becomes a continuing feature of markets in 2021, as investors gauge prospects for a persistent pick-up in inflation.

“What Joe Biden showed is he is not going to repeat the mistake of playing footsie with the Republicans for months or a year and a half and get no Republican votes,” said Democratic Representative Andy Levin of Michigan. Still, there’s “an evergreen hope” for at least a bipartisan deal on infrastructure — perhaps enabled by a return of legislative earmarks, he said.

Democrats have announced that earmarks will be included in the infrastructure proposal, something that allows bargaining to fund particular priorities for individual lawmakers. But Republicans are still discussing among themselves whether to participate and are aiming to decide this week.

– Bloomberg

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