As President Joe Biden makes the case for democracy overseas, his agenda back home is facing major obstacles in Washington, where early progress on several key items has stalled in Congress.

Plodding negotiations and calls to drop bipartisan overtures could imperil — or even unravel — headway on infrastructure, police reform and voting rights. And a raft of revelations about former President Donald Trump’s Justice Department is threatening to draw focus on Capitol Hill elsewhere this week.
Here’s where things stand in Congress:

Here’s where things stand in Congress:

The coming days will bring a better sense of where lawmakers stand on the $1.2 trillion infrastructure package that a bipartisan group of 10 senators announced last week.
While the deal amounted to the most significant development yet in negotiations, the effort is already facing stiff resistance from liberal Senate Democrats eager to abandon bipartisan talks.

“Let’s face it. It’s time to move forward,” Sen. Elizabeth Warren, a Massachusetts Democrat, told CNN last week about the talks with the bipartisan group. “The Republicans have held us up long enough.”

While the group didn’t publicly reveal specifics of the agreement, several sources told CNN they crafted a package that includes:

$1.2 trillion of spending over eight years
$974 billion spent over the first five years
The plan calls for $579 billion dollars of new spending.
The spending will be focused on core, physical infrastructure.
The plan will be paid for without tax hikes.

Many of the specific details still need to be ironed out.

“We’re focusing on the traditional infrastructure definition: roads, bridges, airports, seaports, waterways, highways, broadband, and I think that makes sense,” GOP Sen. Susan Collins told CBS’ “Face the Nation” on Sunday.

But many Republicans are wary that the price tag is too high, while many Democrats prefer a much more ambitious and expensive plan that they think will boost the economy, aid the climate and create jobs.

The result is a two-track path for Democrats: Party leaders say they are pursuing Biden’s massive infrastructure and social safety net package along both bipartisan and partisan lanes. Senate Majority Leader Chuck Schumer is preparing to begin the budget process next month, setting the stage for advancing a bill along straight party lines, something that can only succeed if all 50 Democrats endorse such a process known as reconciliation.
Where the White House comes down on the plan will matter a lot. While many Democrats expressed concerns that their party’s negotiators were giving up too much in the talks, if the President endorses the plan, it could force many to fall in line.

“The President appreciates the Senators’ work to advance critical investments we need to create good jobs, prepare for our clean energy future, and compete in the global economy,” White House spokesman Andrew Bates said in a statement last week.

House Speaker Nancy Pelosi, for her part, said Sunday she’s “very pleased” that a deal was reached, but she warned the proposal might be a tough sell to the House Democratic Caucus if more isn’t included.

“I do think that it is predicated on an infrastructure that is of the last century. We have to be thinking in a more forward way. We must build back better. So if this is something that can be agreed upon, I don’t know how we can possibly sell it … to our caucus unless we know there is more to come,” she told CNN’s Dana Bash on “State of the Union.”
Policing overhaul talks up against the clock

Deliberations over a broad policing reform bill remain stalled on a number of key issues as negotiators race to meet their deadline for an agreement before the end of June, when a two-week July Fourth recess begins.

GOP Sen. Tim Scott of South Carolina, the top Republican negotiator, described to CNN last week how in addition to resolving the stark differences over qualified immunity — which deals with whether individual officers could be sued for wrongdoing as Democrats want but Republicans reject — there are still challenges in combining the Democrats’ House-passed George Floyd Justice in Policing Act with the Senate Republicans’ JUSTICE Act.

“It’s a little more complicated than just the top four or five issues that we’ve been covering, because the devil in the details of the actual body of the pieces of legislation are complicated and there are very big differences,” he said.

Asked by CNN why the talks, which have stretched on for many weeks, are taking so long, Scott said combining the two very large bills is proving to be complicated. “Have you read the two bills? They’re long,” he said. “So, I don’t mean that to be sarcastic. In all honesty, comparing the two bills, and then coming to a solution on the two sides is really hard.”
Sen. Cory Booker, the key Senate Democratic negotiator, agreed Thursday that there’s “a lot of work to be done” but maintained that the parties can still reach an agreement by the end of the month.

“I think we are days, but that could be 30 days or 25 days, who knows, and there’s a lot of work to be done in a very short period of time,” the New Jersey Democrat told reporters, when asked whether the negotiators are days away or far from reaching a deal.

Pressed on whether he’s concerned about some progressive organizations not wanting a compromise on qualified immunity, Booker said, “I’m going to get the best deal we can possibly get, and if it’s not making substantive and meaningful reform that will, you know, create more transparent policing, more accountable policing and potentially save lives then I don’t think there’s any reason to do it.”

Supporters of the George Floyd Justice in Policing Act say it would boost police accountability and help eradicate racial bias in policing.

While Biden has said he supports the bill, some leaders say if Congress won’t act, they want to see the White House reviving Obama-era panels to review policing practices and investigating police agencies in more cities. Other civil rights activists, however, say the nation needs police reform legislation more than anything and they are hopeful that Congress will pass it and Biden will sign it.

Progressive groups move to pressure Senate on voting rights

While Schumer has said he will put the For the People Act (or S 1) — a sweeping election and voting rights package — on the floor this month, the legislation currently doesn’t have the votes to advance.

The broad package, which was passed by the House in March, would bar states from limiting voting by mail, would require prepaid postage on absentee ballots and would mandate voter registration on the same day as the election. It also effectively would overturn voter ID laws by requiring states to allow voters to submit sworn statements in lieu of identification.

The bill’s proponents are expected to hammer out changes to the roughly 800-page bill to make it more palatable to all members of their caucus and address the concerns of local election officials.

The current version, for instance, mandates 15 consecutive days of early voting with polls open at least 10 hours a day. But Sen. Amy Klobuchar of Minnesota, one of the Democrats guiding the measure through the Senate, has sought to exempt jurisdictions with fewer than 3,000 registered voters and those that mail ballots to all voters, following feedback from election officials.

Democratic Sen. Joe Manchin of West Virginia is the only Democrat who is not a co-sponsor of the original legislation, but other Democrats have expressed concerns with the current draft of the bill in private meetings.
“I believe that partisan voting legislation will des

troy the already weakening binds of our democracy, and for that reason, I will vote against the For the People Act. Furthermore, I will not vote to weaken or eliminate the filibuster,” Manchin wrote in an op-ed published in the Charleston Gazette-Mail last week.

Activists say they are preparing for a range of outcomes, including an all-out drive against the filibuster during the senators’ July Fourth recess, if the bill falters in the Senate later this month.

The showdown in the chamber will play out as more GOP-controlled states move ahead with limits on voting, inspired by former President Donald Trump’s unfounded claims that voter fraud contributed to his White House loss in 2020.

As of late last month, 14 states had enacted at least 22 laws restricting ballot access since the 2020 election, according to the Brennan Center for Justice at New York University School of Law, with an additional 61 bills advancing through legislatures in 18 states.

A $1.2 trillion infrastructure proposal developed by a bipartisan group of 10 senators doesn’t include a roll back of the 2017 tax law or a gas tax increase, according to Sen. Susan Collins.

Collins (R-Maine) suggested Sunday that a “targeted” infrastructure plan could be paid for by three different options: an infrastructure financing authority, re-purposing already approved pandemic aid funds, and charging electric vehicle drivers “their fair share” for use of roads and bridges.

President Joe Biden has been interested in pursuing a bipartisan bill, but hasn’t been able to find common ground with Republicans on the size and scope of the legislation. Biden’s infrastructure and social spending plans call for a variety of tax code changes focused on corporations and the wealthy.

Collins, during an interview on CBS’s “Face the Nation,” said infrastructure talks should focus on repairing roads and bridges, rather than elder care and some of the other issues highlighted in Biden’s economic proposals.

“We can look at these issues, but they are not infrastructure and they should be considered separately,” she said.

House Speaker Nancy Pelosi (D-Calif.) said on Sunday that she hasn’t seen the details of the bipartisan proposal, but acknowledged that a slimmed-down bill could be tough to sell to her caucus “unless we know there is more to come.”

“Let’s see if we can come to a reasonable amount of money to get that work done, but I have no intention of abandoning the rest of my vision about the better—building back better,” Pelosi said during an appearance on CNN’s “State of the Union” program Sunday.

Rep. Dan Kildee (D-Mich.) said he worries about the idea of cutting a bipartisan deal with the intention of later using the budget reconciliation process—a tool that allows the Senate to avoid a filibuster—to pass the rest of Biden’s economic agenda.

“Sometimes, later never comes,” Kildee said. “I’m concerned about delegating the future of the economy to a small group of senators who have appointed themselves to be in charge.”

Read more from Erik Wasson and Billy House.

Eyes on Schumer: Senate Majority Leader Chuck Schumer‘s ability to navigate an evenly-divided chamber will be key to advancing Biden’s economic agenda.

So far this year, the chamber’s focus has included passing a massive stimulus law and approving Biden’s nominees. The summer is expected to bring trickier fights over everything from government funding to the debt limit—not to mention dozens of judicial nominees to fill open seats at the district and circuit court level.

“We’re moving now into the difficult phase,” said Bill Hoagland, senior vice president of the Bipartisan Policy Center. “The honeymoon’s over.”

Schumer (D-N.Y.) is also facing a time crunch: Senators have less than 30 official workdays between now and mid-September. The end of September brings the annual deadline for extending government funding, as well as the expiration of several key programs.

Read more from Nancy Ognanovich.

Ways & Means Meeting: Democratic members of the House Ways and Means Committee will meet Monday in Washington to discuss ways to move Biden’s economic agenda forward, according to four sources familiar with the plans.

Ways and Means Chair Richard Neal (D-Mass.) is expected to play a crucial role steering any legislative package with tax provisions.

ProPublica Probe: Senate Finance Republicans want the Treasury Inspector General for Tax Administration to investigate the source of an anonymous leak to ProPublica.

The data showed several of the country’s wealthiest individuals reportedly paid little to no federal income tax in some years. The leak included information on Jeff Bezos, Elon Musk, Bloomberg LP founder Michael Bloomberg, and others. Bloomberg Tax is operated by entities controlled by Michael Bloomberg.

If the IRS is the source, the leak “constitutes a serious breach of privacy and is a criminal violation of our tax laws,” the lawmakers wrote Friday in a letter.

Tax Credit Guidance: The IRS on Friday issued a pair of FAQs, including one on paid leave tax credits available for caretakers and businesses.

The March pandemic aid package (Public Law 117-2) expanded eligibility for the child and dependent care tax credit and allowed small and mid-sized businesses to claim tax credits for providing employees with paid leave due to Covid-19.

Read more from Isabelle Sarraf.

Regulatory Agenda

Two projects related to popular charitable-giving vehicles were included in the regulatory agenda for the first time Friday. The packages would regulate donor-advised funds—tools that allow individuals to make donations to a fund sponsor in exchange for an immediate tax benefit, even though the donations are distributed to charities over time.

Guidance on the funds has been highly anticipated as they have become increasingly popular in recent years. Both packages added to the agenda would further regulate the nonprofit sector, and are expected to codify tax changes made by Congress 15 years ago.

“These will be big news for charities that sponsor DAFs and DAF holders,” said Steven Woolf, senior tax counsel at The Jewish Federations of North America.

One of the packages would give additional guidance under tax code Section 4958, which imposes excise taxes on transactions considered “excess benefit.” Those transactions involve nonprofit insiders receiving unwarranted compensation from the organization. The second package concerns distributions from the donor-advised funds that result in any donor or related person receiving more than an incidental benefit from the transaction.

Read more about the agenda.

Corporate Side: The SEC is also planning rules on corporate disclosures on climate risks, board diversity, and corporate workforces. Read more.

What to Watch This Week

Tax Court: The U.S. Tax Court will begin a trial today in medical device maker Medtronic’s $1.4 billion tax dispute. Aysha Bagchi has a full preview of the trial.

Gender Equity: On Tuesday, the OECD will hold a conference focused on gender equity and tax. Planned speakers include Grace Perez Navarro, deputy director of the Centre for Tax Policy and Administration at the OECD.

Biden Budget: Treasury Secretary Janet Yellen will testify on Wednesday before the Senate Finance Committee on Biden’s fiscal 2022 budget.

Infrastructure Needs: Senate Banking, Housing, and Urban Affairs Committee will hear from local leaders on infrastructure needs in states, cities, and towns on Tuesday.

Women Entrepreneurship: The House Small Business Economic Growth, Tax, and Capital Access Subcommittee will meet Tuesday to discuss women entrepreneurship and opportunities to rebuild the economy.

BTAX Forum: Bloomberg Tax is hosting a two-day leadership forum starting Wednesday. Register here.

Nonprofit Updates: On Friday, the TEGE Exempt Organizations Council will meet. Panelists include Yael Fuchs, co-section chief, in the Charities Bureau Enforcement Section at the Office of the New York State Attorney General, and Catherine Jackson, Chief Public Integrity Section at the District of Columbia Office of the Attorney General.

Beyond the Beltway

PPP Taxes: New Hampshire is the latest state to pass legislation exempting Paycheck Protection Program loans from state taxes. The small business loan program, which stopped accepting new applications a few weeks ago, facilitated hundreds of billions in government-backed loans.

Richard Auxier, a senior policy associate at the Urban-Brookings Tax Policy Center, said more states are deciding to offer the tax relief because of improving finances. “More states can now afford to do this so they are,” he said.

Read more from Sam McQuillan.

Murphy Re-Election: New Jersey Gov. Phil Murphy (D) is seeking re-election, and if he wins he would be the state’s first two-term Democrat governor since 1977.

With five months to go, Republican challenger Jack Ciattarelli is arguing that Murphy has worsened the state’s high-tax, high-regulation reputation and failed to rein in sprawling local spending.

Elise Young has more on Murphy’s bid.

To contact the reporters on this story: Colleen Murphy in Washington at cmurphy@bloombergtax.com; Patrick Ambrosio in Washington at pambrosio@bloombergtax.com

Congressional lawmakers are set to return to the Capitol on Monday facing a pivotal week for the future of infrastructure reform, as bipartisan negotiations continue and work proceeds to advance a flurry of bills to improve the nation’s roads, bridges, pipes, ports and Internet connections.

At the center of the debate is an infrastructure compromise brokered by 10 Senate Democrats and Republicans. The bloc, largely composed of moderates, now faces the new, tough task of selling their deal to both fellow lawmakers and the White House, just days after talks between President Biden and another group of GOP leaders reached a political impasse.

“We’re talking to folks, one by one, and just asking folks to be open,” said Sen. Mitt Romney (R-Utah) in advance of the new plan’s release.

Some Democrats already have expressed discomfort with the early details of the nearly $1 trillion, five-year package, arguing it should be bigger and more robust in scope. Republicans, meanwhile, signaled there may not be widespread support for it within their own party, either. And the White House said at the end of last week it has “questions” about lawmakers’ approach, as fresh concerns emerged over the potential changes to the gas tax that could help finance the new proposal.

But congressional Democrats have said they are not willing to wait much longer in courting Republicans. They’ve already started laying the groundwork to proceed on infrastructure potentially on their own, relying on a process known as reconciliation that might allow them to advance their favored fixes with only 51 votes, not the 60 that are typically required in the nearly deadlocked Senate.

Even though some in the party are not yet comfortable with the move, Majority Leader Charles E. Schumer (D-N.Y.) stressed the goal is to forge ahead on “two tracks” so that lawmakers can keep to their stated timeline of tackling infrastructure in July.

“I’m very impatient,” said Schumer’s top lieutenant, Sen. Richard J. Durbin (D-Ill.), before the chamber adjourned last week.

With the calendar quickly evaporating — and, by Durbin’s count, only six scheduled workweeks between now and September — the party’s chief vote-counter said Democrats could not afford to stomach much more delay.

“I’ve seen this movie before — it’s called the Affordable Care Act,” Durbin said, referring to the lengthy talks over health care reform under President Barack Obama. “We waited a calendar year for bipartisanship, and it never, ever appeared.”

The new proposal is the work of five Democrats and five Republicans: Sens. Romney, Bill Cassidy (R-La.), Susan Collins (R-Maine), Joe Manchin III (D-W.Va.), Lisa Murkowski (R-Alaska), Rob Portman (R-Ohio), Jeanne Shaheen (D-N.H.), Kyrsten Sinema (D-Ariz.), Jon Tester (D-Mont.), and Mark R. Warner (D-Va.).

Their early agreement calls for about $974 billion in infrastructure spending over five years. More than half of the total amount constitutes new spending, less than the $2.2 trillion that Biden had put forward as part of his initial blueprint known as the American Jobs Plan this spring. And lawmakers said the plan includes no new tax increases, marking another break with the president, though it is expected to allow the gas tax to rise alongside inflation — and apply a version of it for the first time to electric vehicles — to help raise revenue.

The bipartisan bloc announced they had reached a deal Thursday, just three days after Biden said he would look to other avenues for compromise in the wake of collapsed talks with a group of Republicans led by Sen. Shelley Moore Capito (R-W.Va.). Biden said at the time that Capito’s package, which was smaller than lawmakers’ new bipartisan work product, did not go far enough or spend enough for his liking — leaving Capito skeptical that her colleagues are likely to fare much better.

“I want to see us have an infrastructure plan,” she told reporters, before noting that Biden has continued to seek some tax increases that Republicans do not support. “So I don’t know if they’re going to have any more luck.”

But early schisms emerged even before Senate lawmakers formally released full details of their proposal. For one thing, the proposal is expected to hew largely to a more traditional definition of infrastructure — a contrast with the White House’s plan, which seeks to target some spending at families and schools.

House Speaker Nancy Pelosi (D-Calif.) signaled on Sunday that her party is not willing to back down in pursuing those investments as part of either infrastructure reform or another future economic package.

“I have no intention of abandoning the rest of my vision,” Pelosi told CNN’s “State of the Union.” “What is being talked about in [infrastructure reform] is, by and large, something that could have been talked about 50 years ago. We’re talking about the future.”

Other Democrats, meanwhile, raised early fears that the bipartisan package might not go far enough on climate change, especially after the White House itself signaled an openness to rethinking its approach in pursuit of a deal with GOP lawmakers who disfavor the provisions. In recent days, Sen. Sheldon Whitehouse (D-R.I.) has lamented publicly there are “zero people” who see recent bipartisan talks “as a vehicle for anything serious on climate.”

Asked if their emerging infrastructure agreement includes proposals to address the issue, Tester said Thursday, “Oh, sure.”

Whether it is “enough,” he continued, “is the question.”

“There are some people that are going to say the climate provisions are more than enough, there are other people that are going to say it’s not adequate,” Tester said. “It’s going to be up to each individual member once this thing is truly done.”

And still more Democrats raised concerns with efforts to tie the gas tax to inflation: Even though it is not technically an increase, the proposal could still raise Americans’ costs at the pump, violating Biden’s pledge not to raise taxes on Americans making under $400,000. Inside the White House, top officials advising the president see the idea as a nonstarter, while some congressional Democrats said they shared that view.

The White House did not respond to a request for comment. Collins, one of the lawmakers behind the blueprint, sought to heed off potential criticism that it violates the president’s pledge during an interview Sunday.

“There won’t be a gas tax increase, and we won’t be undoing the 2017 tax reform bill,” she told CBS’s “Face the Nation.”

The still-forming Senate proposal is not the only attempt at bipartisan compromise in the works: A bloc of House Democrats and Republicans, known as the Problem Solvers Caucus, unveiled their own eight-year, $1.2 billion plan last week, about one third of which constitutes new spending. The group’s leaders, Democratic Rep. Josh Gottheimer (N.J.) and Republican Rep. Brian Fitzpatrick (Pa.), shared their plan with top White House officials last week. They have yet to identify ways to finance the package.

“I know there are some who say we shouldn’t proceed in a bipartisan way,” Gottheimer said. He stressed that abandoning talks would be a “huge mistake,” adding, “I don’t know why we would walk away when we’re in the middle of it.”

But selling some of these retooled plans to Republicans could prove just as tough, particularly in the Senate, predicted Sen. Roy Blunt (R-Mo.), who participated in the earlier, unsuccessful round of talks.

“If we would have gotten a deal, I felt like there was a chance for 20 or 25 Republicans to be part of that deal,” he said. Blunt added it is “less likely among any sort of a gang-like effort” because of the fact that GOP leadership, including its committee chiefs, are less involved.

“A group of 10 that’s bipartisan only has five Republicans,” he continued, which he said presented two challenges. “One, you’ve got to get five more Republicans to get to 60. And two, if you can’t hold on to all 50 Democrats, you have to add [more Republicans].”

In the meantime, Democrats in Congress have sought to keep their options open as they begin the broader process for setting government funding levels for the 2022 fiscal year. The Capitol’s two budget leaders — Rep. John Yarmuth (D-Ky.) in the House and Sen. Bernie Sanders (I-Vt.) in the Senate — are preparing reconciliation instructions that could advance Biden’s infrastructure proposal as well as his roughly $1.9 trillion families-focused plan. The move would allow Democrats to sidestep the GOP, but only if Democrats are in lockstep, and lawmakers including Manchin have said they aren’t yet ready to abandon bipartisan talks.

House and Senate lawmakers also have started moving a slew of additional bills that encompass many of Biden’s infrastructure goals — some of which ultimately could become a vehicle for a broader spending package.

On Thursday, for example, the House took a key procedural step toward advancing a $547 billion bill to upgrade the country’s roads and fund other federal surface transportation programs. The bill shares many of the same contours as Biden’s jobs plan, including its inclusion of proposals to fight climate change, a move that prompted Republicans to vote overwhelmingly against it as it emerged from committee.

House Majority Leader Steny H. Hoyer (D-Md.) told lawmakers in a letter last week that Democrats intend to bring the proposal, chiefly written by Rep. Peter A. DeFazio (D-Ore.), to the floor before the end of June. The Senate, meanwhile, similarly has wrapped up early legislative work on its own roads-focused package — a more scaled-back, overwhelmingly bipartisan bill totaling about $300 billion. Lawmakers last week also introduced a $78 billion proposal accompanying it to improve the country’s railways. Congress must reauthorize many of these key transportation programs by the end of September, adding urgency to their efforts.

House and Senate lawmakers similarly have forged ahead in advancing tens of billions of dollars in bills to upgrade the country’s pipes, expand access to clean drinking water and fix aging wastewater facilities, much as Biden has sought to do. And the Senate last week adopted a roughly $250 billion bill to battle back China’s rise in science and technology that included new funds for chipmakers, another element of the president’s plan.

House Democrats plan to allow appropriators to get started on fiscal 2022 spending bills before releasing a full budget resolution, potentially saving that measure to pave a path forward for infrastructure and other legislative priorities.

Democrats introduced on Friday a resolution (H. Res. 467) to set a $1.5 trillion limit on regular discretionary appropriations for fiscal 2022, House Budget Chair John Yarmuth (D-Ky.) told Bloomberg News’ Erik Wasson. The “deeming resolution” would set top-line spending levels in lieu of a full budget resolution.

The $1.5 trillion hews closely to President Joe Biden’s proposed top line, which included $769.6 billion for nondefense discretionary spending and $752.9 billion for defense, totaling slightly more than $1.5 trillion.

The decision also saves the full fiscal 2022 budget resolution for reconciliation purposes. Yarmuth said in an interview last week he’s moving “full speed ahead” on a budget resolution with reconciliation instructions that would allow senators to pass Biden’s two economic legislative proposals, including for infrastructure, with a simple majority.

The deeming resolution would require a vote on the floor to allow appropriators to start work. The last time House lawmakers struggled to agree to top-line spending figures — during a 2019 squabble among Democrats over military funding — lawmakers included the deeming resolution within a rule for consideration of another measure, so that when lawmakers adopted the rule they also gave appropriators the go-ahead.

House appropriators plan to begin markups of spending bills “in the coming weeks,” House Appropriations Committee majority spokesman Evan Hollander said in an email last week. The markups are set to be a hybrid between in-person and remote participation under the House’s rules for committee work during the pandemic, Hollander said. The House’s “covered period” allowing remote voting and committee work has been extended until July 3.

Senate Appropriations Chairman Patrick Leahy (D-Vt.) said he wants to start holding markups in July. He said there have been informal bipartisan discussions about top-line spending levels. Vice Chairman Richard Shelby (R-Ala.) said those conversations have yet to get serious.

It’s safe to expect that lawmakers will rely on at least one stopgap measure to fund the government past the Sept. 30 deadline, largely because the Senate tends to work slowly, Yarmuth said in an interview last week.

“The Senate does not have a history of getting their work done on time,” Yarmuth said.

More Budget & Appropriations News

Infrastructure Talks Drag: Biden’s quest to enact his $4 trillion economic agenda enters a turbulent new phase today as the House comes back into session and Democratic representatives ramp up pressure on the Senate to produce a bipartisan compromise or stop prolonging the effort, Bloomberg News’ Erik Wasson and Billy House report.

Addressing the demands of progressive Democrats to go it alone will be a major challenge for Speaker Nancy Pelosi (D-Calif.) and her top lieutenants in the coming weeks. She’ll need to keep an eye as well on moderate Democrats, who are leery about any solo package in the absence of the party having enough Senate votes to power it through.

Tensions have risen in the run-up to White House acting budget director Shalanda Young and Biden counselor Steve Ricchetti’s meeting tomorrow with House Democrats to discuss Biden’s proposed programs. That will mark the caucus’s first in-person get-together since the pandemic erupted.

A key challenge is that the fast-track budget process that progressives want to use — the same one deployed for the $1.9 trillion March pandemic-relief bill — will only be available if all 50 in the Senate Democratic caucus agree to take that step.

Two key members — Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) — are not in favor of that course without trying a bipartisan deal first. While talks on that front continue, there’s no guarantee a Senate compromise could pass the Democratic-controlled House.

Read more: Pelosi Faces Restive Caucus as Senate Infrastructure Talks Drag

Collins Touts Plan: The infrastructure spending package developed by a bipartisan group of senators will be “targeted” and “responsible,” one of its architects said yesterday. Sen. Susan Collins (R-Maine) continued to call for spending to be confined to traditional priorities like repairing roads, bridges and airports, and split off from the broader proposals of the Biden administration like elder care funding. Collins is among a bipartisan group of 10 senators that has formulated a $1.2 trillion deal on an infrastructure bill they will pitch to Biden. Read more from Anna Edney.

White House Wants Border Wall Rescission: The White House said Friday in a fact sheet it “is reiterating its call for Congress to cancel funds it previously appropriated for border barrier projects so that these resources can instead be used for modern, effective border management measures to improve safety and security.”

White House Press Secretary Jen Psaki has said the Biden administration has blocked border wall funding that was taken from the Department of Defense, but hasn’t blocked funds that were specifically appropriated for the border wall. Congressional Republicans have said the administration may have violated the Impoundment Control Act by withholding some border wall funds, and the Government Accountability Office is investigating.

Read more: Biden Gives Military $2 Billion Trump Allotted for Border Wall

Fiscal 2022 Budget & Appropriations Hearings

SENATE

• Armed Services on the Army posture in review of the 2022 National Defense Authorization Act, tomorrow. Army Secretary Christine Wormuth will testify.
• Armed Services Airland Subcommittee on Army modernization in review of the 2022 NDAA, tomorrow.
• Appropriations Agriculture-FDA Subcommittee on the Agriculture Department budget, Tuesday. Agriculture Secretary Tom Vilsack will testify.
• Appropriations Commerce-Justice-Science Subcommittee on NASA, Tuesday. NASA Administrator Bill Nelson will testify.
• Appropriations Labor-HHS-Education on the Education Department, Wednesday. Education Secretary Miguel Cardona will testify.
• Appropriations Interior-Environment on the Interior Department, Wednesday. Interior Secretary Deb Haaland will testify.
• Appropriations Transportation-HUD Subcommittee on the Transportation Department, Wednesday. Transportation Secretary Pete Buttigieg will testify.
• Appropriations MilCon-VA Subcommittee on military construction and family housing, Wednesday.
• Appropriations Committee on the Defense Department, Thursday.
• Energy and Natural Resources on the Energy Department, Tuesday.
• Veterans’ Affairs on the Veterans Affairs Department requests for fiscal 2022 and 2023, Wednesday.
• Finance Committee on the Biden’s budget, Wednesday. Treasury Secretary Janet Yellen will testify.
• Energy and Natural Resources on the Forest Service, Thursday. Forest Service Chief Victoria Christensen will testify.

HOUSE

• Permanent Select Committee on Intelligence on the National Intelligence Program budget overview, tomorrow.
• Armed Services Strategic Forces Subcommittee on missile defense and defeat programs, tomorrow.
• Armed Services on the Navy, tomorrow. Acting Navy Secretary Thomas Harker will testify.
• Armed Services on the Air Force, Wednesday. Acting Air Force Secretary John Roth will testify.
• Armed Services Seapower and Projection Forces Subcommittee on Navy seapower and projection forces, Thursday.
• Way and Means on Biden’s budget, Thursday. Treasury Secretary Janet Yellen will testify.

President Joe Biden laid out his first regulatory to-do list Friday, detailing his ambitions to dramatically expand the scope of the federal government’s involvement in education, healthcare, and the environment, among other areas.

Tougher regulation to prevent discrimination in health care, boost wages for tipped workers, and provide relief for student loan borrowers is on the agenda that outlines each federal agency’s regulatory priorities for the coming months. The agenda includes agency plans to revise Trump-era rules on pollution, greenhouse gas emissions, and public lands. And it includes proposals that would strengthen protections for immigrants who arrived in the U.S. as children alter which asylum-seekers are allowed into the U.S.

The list, typically issued twice per year, marks a stark departure from the Trump administration’s focus on reducing the size, cost and scope of federal regulations. With Congress narrowly divided, it offers a window into how Biden wants to leverage the federal agencies he oversees to advance his ambitious agenda through regulation.

“The last four years offered a clear lesson on what happens when the executive branch fails to uphold its responsibility to protect the American people,” said Sharon Block, acting administrator of the White House regulations office, in a statement. “Our first regulatory agenda demonstrates our commitment to reversing this trend.”

The list of regulations isn’t final. Agencies will have to complete a number of tasks before they become law, including drafting rules and collecting feedback. The White House regulations office, led for now by Block, will sign off on each rule before it is published.

As a private citizen, Block wrote last year that corporations have an “outsized” influence on that office. That won’t happen under her leadership, she said in an interview Thursday.

“We listen to everybody, but we have no confusion about what our priorities are and where the regulations that we work on should end up,” Block said.

Sen. Rob Portman (R-Ohio), who oversaw budget and regulation during the George W. Bush administration, disagreed with the Biden administration’s plan to expand federal involvement in businesses. Portman is now the top Republican on the committee that oversees the White House regulations office, and will help lead a confirmation hearing for that office’s leader if the Biden administration picks a nominee.

“We should be looking for ways to encourage productivity,” Portman said in a statement.

The regulatory list includes more than 2,500 items. Here are some of the key takeaways:

Climate Fight

Much of Biden’s climate agenda is tied up in infrastructure negotiations on Capitol Hill, where discussions have bogged down among competing plans in recent days. The agenda lays out Biden’s strategy to advance his environmental ambitions while those talks continue.

The Environmental Protection Agency is planning a quick turnaround on regulations to phase down hydrofluorocarbons, or “super polluting” greenhouse gases that warm the Earth at a rate hundreds of times more than carbon dioxide.

Democrats and Republicans reached a compromise, as part of a broad energy package signed into law in December, to gradually reduce the powerful greenhouse gases. The EPA plans to issue a final rule on the topic in October.

At the same time, the Energy Department is writing regulations to strengthen conservation standards for dozens of products, including walk-in coolers, furnace fans and clothes dryers.

Federal agencies plan to increase regulation of PFAS, the so-called “forever chemicals,” in drinking water. Some PFAS are linked to increased cholesterol levels, changes in liver enzymes, and lower infant birth weights, according to the Centers for Disease Control and Prevention.

The agencies will also write stricter standards for natural resources development on public lands and revise Trump-era rules to toughen pollution regulations.

The Department of Transportation also plans to enhance pipeline safety, including through new requirements to detect and repair leaks.

Equity Push

Biden promised early in his presidency to tackle racial and social inequities, and the agenda outlines how agencies aim to achieve that.

The Department of Health and Human Services plans to strengthen protections against race, gender and disability discrimination in health care.

Separately, the Department of Housing and Urban Development will write rules designed to give people equal access to federally-funded shelters and facilities, regardless of sexual orientation or gender.

Economic Recovery

The Centers for Disease Control and Prevention intends to finish requirements by April 2022 for airlines to collect and provide communicable disease information to the agency.

Both the Trump and Obama administrations failed to create a national aviation preparedness plan for disease outbreaks, making it difficult for the CDC to trace airline passengers infected with the coronavirus during the early days of the pandemic.

The Labor Department will aim to make recently-announced pay increases for federal contractors permanent and adjust wages for tipped workers.

The Education Department will draft proposals to make it easier for borrowers to get relief from their student loans and to cut off aid to poor quality vocational schools in 2022.

The Small Business Administration plans to advance regulations that ease the requirements for refinancing debt and expand other loan programs.

The Food and Drug Administration is planning in October to propose new ways to regulate manufacturing and packaging requirements for tobacco products.

Health Coverage

The Department of Health and Human Services will propose repealing a provision in a Trump administration rule that allows states to use brokers and health insurers to directly enroll consumers in Affordable Care Act health plans. The provision would largely bypass the federal HealthCare.gov exchange, as Georgia has proposed doing.

Immigration Rules

The Justice Department and Department of Homeland Security plan to propose new criteria for asylum-seekers as part of Biden’s broader goal to retool the nation’s immigration system.

The Department of Homeland Security will draft ways to strengthen protections for undocumented individuals brought to the U.S. illegally as children, under the program known as Deferred Action for Childhood Arrivals (DACA). It expects to publish its proposal by August.

Download Slides: Biden’s Economic and Tax Plan

Medicare Program; Modification of Limitations on Redesignation by the Medicare

Geographic Classification Review Board (MGCRB)

FY22 IPPS Proposed Rule

FY22 IPPS Proposed Rule – CBSA

FY22 IPPS Proposed Rule – Imputed Floor

Senate Finance Chair Ron Wyden (D-Ore.) confirmed in a hearing this morning that he’s begun updating the 2019 bill he co-authored with Sen. Chuck Grassley (R-Iowa) that would have cut subsidies from drug companies that raised prices more than the cost of inflation, POLITICO’s Alice Miranda Ollstein reports. 

Specifically, Wyden said he plans to add some kind of Medicare price negotiation to that narrower bill, though it may not look exactly like the House’s H.R. 3 (117). 

“Not only are too many Americans forgoing or rationing their prescriptions, sky-high drug prices could bust our health care budgets,” Wyden said. “We are all hungry for genuine medical breakthroughs, but what does it mean, senators, if the vast majority of Americans cannot afford them?”

HHS Secretary Xavier Becerra endorsed the general effort, praising lawmakers for putting forward “a number of good ideas,” including rebates and more oversight mechanisms. But as in other hearings this week, he declined to say what exact policies he supports. 

“Innovation is effective only if people can afford it,” Becerra said. 

GRASSLEY: Assume the bill is dead — Grassley insisted that Medicare price negotiation “can’t get 60 votes” in the Senate and asked Becerra if Biden’s budget proposal didn’t include H.R. 3 because he believes there’s “no path forward” for the bill.

When Becerra demurred, Grassley urged him to lobby Biden to instead support his narrower, bipartisan bill, claiming it could “easily get 65 to 70 votes in the Senate and maybe more than that” and that it could meaningfully regulate the drug industry. 

Still, several Democrats made it clear in the hearing they wouldn’t settle for the Grassley-Wyden proposal, which Sen. Elizabeth Warren (D-Mass.) suggested was a “watered-down half-measure” as she demanded “drug price negotiation with real muscle.”

Democrats are considering adding Medicare drug price negotiation to the president’s American Families Plan and using budget reconciliation to pass it separately from the infrastructure bill, if a bipartisan deal is struck on infrastructure, drug and consumer lobbyists said.

Yet key lawmakers are also going through the motions of negotiating a bipartisan drug-pricing bill. Senate Finance Committee Chair Ron Wyden (D-OR) said he has spoken with Republicans about the issue, and Sen. Chuck Grassley (IA), the Republican who wrote a drug pricing bill with Wyden in 2019, told Inside Health Policy he scheduled a meeting next week with a handful of House Democrats who want to work on a bipartisan drug-pricing bill.

Lobbyists say it’s a long shot to attach drug pricing to the American Families Plan, but they say the effort to do so shows Democrats haven’t given up on tackling the issue this year. Lobbyists who back Medicare price negotiation say it’s good news that Senate Majority Leader Chuck Schumer (D-NY) also now is at least somewhat involved in pushing drug-pricing legislation. Pfizer is headquartered in Schumer’s state, but lobbyists say many Senate Democrats believe they need to lower drug prices, and not just talk about it, if they want to hang on to power the second half of Biden’s term.

Early this spring, many assumed President Joe Biden would combine infrastructure with social and health care reforms, and Medicare price negotiation would be used to pay for some or all of the health care reforms. Biden separated infrastructure (American Jobs Plan) from the rest (American Families Plan) and to the dismay of Democrat lawmakers, he left out drug-pricing reforms from the American Families Plan. The sole health care reform in the American Families Plan is a measure to make permanent the higher exchange premium subsidies that Congress provided in the pandemic stimulus package.

Then the Senate parliamentarian issued a ruling that makes it all-but impossible for Democrats to pass more than one more reconciliation bill this calendar year. Reconciliation bills require a mere majority to pass, and Democrats don’t believe it’s possible to convince 60 senators to vote for Medicare drug price negotiation.

On Thursday, a small bipartisan group of senators said they reached a tentative agreement on infrastructure. It’s unclear whether that deal will hold, but if enough senators agree to the deal to avoid a filibuster, Democrats can save reconciliation for the American Families Plan, and if Democrats are going to go it alone on social reforms, some believe that health care should be included.

“We have got to address the crisis of high-cost prescription drugs and the outrage that Medicare does not negotiate drug prices, one way or another that must be in reconciliation,” Senate Budget Committee Chair Bernie Sanders (I-VT) told Inside Health Policy.

Wyden declined to discuss the potential legislative process. He said he insists that drug-pricing legislation charge price inflation rebates, which was included in the bill he and Grassley wrote, as well as some form of Medicare price negotiation, which Grassley and most other Republicans oppose.

Grassley said Senate Democrats are not talking with him about drug pricing, but he will meet next week with some of the 10 House Democrats who recently expressed their uneasiness with House Democrats’ government drug-price negotiation bill. House Democrats’ bill would cap U.S. prices at 120% of the average price among six other rich countries, and international reference pricing does not sit well with some Democrats.

“Senate Democrats aren’t going to talk to me until they realize they’re not going to get 60 votes for what they want to do,” Grassley said.

Medicare price negotiation might be a tough sell to some Democrats, too. A lobbyist who backs Medicare price negotiation said it’s not clear how Schumer plans to thread that needle, but there might be a way to win reluctant senators over with health care measures that benefit their constituents.

There are many health care priorities that drug pricing could pay for, including new Medicare benefits, and one of the challenges for Democrats is determining what to put on that list to win over hesitant Democrats and possibly some of the patient groups that otherwise would take the drug industry’s side.

Doctors, hospitals, and other health-care providers will now have 90 days to report payments received from the government’s coronavirus relief fund after the HHS extended the deadline from 30 days, the agency announcedFriday.

The congressionally approved provider relief fund (PRF), administered by the Health and Human Services Department, is designed to help health-care entities that have financially struggled during the pandemic. At least $117.7 billion has been paid out to providers.

The change will apply to any provider who received at least $10,000 in each payment period. The requirements don’t apply to the rural health clinic Covid-19 testing program, the Health Resources and Services Administration uninsured reimbursement fund, or the HRSA Covid-19 coverage assistance fund.

Nursing homes and other skilled nursing facilities that received funds also now have to report the payments to the HHS under the change.

“These updated requirements reflect our focus on giving providers equitable amounts of time for use of these funds, maintaining effective safeguards for taxpayer dollars, and incorporating feedback from providers requesting more flexibility and clarity about PRF reporting,” HRSA Acting Administrator Diana Espinosa said in a statement.

The deadline to use the funds will be based on when they were received by the provider, rather than a set date.