While Congress is out of session next week for the July 4 break there are likely to be many phone calls as Congressional leaders work to see if the Biden infrastructure plan will pass in two bills: one bipartisan and one Democratic only, or one Democratic only under Budget Reconciliation.

One part of the strategy seems to be taking form as a consensus develops that any bipartisan package will initiate in the Senate. The House has sent strong signals that they will wait to see whether the bipartisan deal can hold; and what the 50 Senate Democrats can agree to for the human infrastructure package to be handled in the budget process.

There continues to be considerable tension between progressive Democrats and moderates, with respect as to what should be in the Reconciliation package, timing of when the House should take up bills under a two track approach, and how to pay for the programs. Clearly the bipartisan package won’t have any significant tax increases in order to secure Republican votes, and the Budget Reconciliation will need to deal with the cross currents of those who insist on some relief from the SALT deduction issue, and the progressive push to tax the rich through capital gains and personal rate increases. To solve the SALT issue is expensive and the relief g...

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