Infrastructure Was Just the Easy Part

The bipartisan infrastructure bill passed the House Friday night with enough progressive Democrats voting nay to kill it, but with more than enough Republicans voting yea to save it. Dem progressives in safe districts need to act hyper-partisan to protect themselves in next year’s primaries, while GOP moderates need to show bipartisanship to protect themselves in next year’s generals. The opposite game theory applies to Build Back Better – the tax-hike bill – where Dem moderates facing highly competitive generals don’t dare vote for a bill unpopular in swing districts. Dems unanimously voted to consider, not to pass, BBB on Friday. If they ultimately pass it, which we doubt, it will go to the Senate where, if it can pass at all, it will be substantially changed not just by moderates Manchin and Sinema but also by progressives like Sanders. Then it would have to be negotiated into a single version that the House and Senate could both agree on, including the controversial restoration of deductibility of state and local taxes. That’s too many ways to die. The infrastructure bill involves too little spending to be noticeably stimulative, and there are effectively no new taxes. We predict BBB will continue to shrink and will ultimately fail.