MNI EXCLUSIVE: Biden's Relief Plan Likely To Be Slimmed To $1T

U.S. President Joe Biden's fiscal aid proposal will likely be slashed to around USD1 trillion before it stands a chance at becoming law, despite the White House's push for bipartisan support on ambitious Democratic priorities, former officials from both political parties told MNI.

As skepticism rises among GOP moderates and Democrats gird to act quickly, a budget reconciliation process for a slimmed down package looks more viable, sources say.

Senate Republicans have increasingly expressed doubt about the timing and size of Biden's proposal, raising questions over whether the new administration can gather 10 Republican votes to reach the 60 necessary to pass a bipartisan bill under regular order. Using a reconciliation bill would require just 51 votes but comes with its own set of challenges.

Brian Riedl, an outside economic adviser to Senate Republicans now a senior fellow at the Manhattan Institute, said Biden's proposal cannot pass as is, but a "deal can be made" in the coming months, potentially around USD1 trillion.

A package passed via reconciliation may actually be several hundred billion greater than one that proceeded under regular order after it's whittled down by Republicans, he added.

APPETITE FOR COMMON GROUND

Former Democratic aides remain hopeful that Congress can reach a bipartisan agreement, with reconciliation as plan B.

The fiscal proposal was never expected to "bring a kumbaya moment among lawmakers but there is increased appetite for common ground after the January riot at the Capitol," Moe Vela, a former senior adviser to Biden, told MNI.

"That could help lead to the passage of this bill, but I am not sure it will pass as it looked when it was proposed," he said, adding he expects the end product to be "more than half of" the proposed USD1.9 trillion.

Biden's preference is for a bipartisan deal, and the success of that "all depends on how much Biden puts the charm offensive on and whether there is any give from Republican senators beside the usual suspects," said Jim Manley, a former aide to then-Senate Majority Leader Harry Reid. "We are talking about what tradeoffs will happen to get Republicans on board and it doesn't mean adding things -- it means subtracting things."

LENGTHY RECONCILIATION

Members of the Biden administration are expected to meet with a bipartisan group of senators in coming days to appeal for the administration's relief proposal. House Democrats are signaling they will begin work in early February to move Biden's massive Covid relief package but admit it may not pass the House until early March.

Going the reconciliation route would still leave significant hurdles, including a delay while the House to draft and pass a budget resolution and further procedural complications in the Senate. And it likely dooms Democrats' effort to increase the U.S. minimum wage to USD15 per hour from USD7.25 and puts USD350 billion of proposed state and local aid at risk, sources said. Lawmakers have sparred over state aid for months.

"It is President Biden's preference to try to reach a bipartisan deal" that would allow for a larger fiscal package containing more of the components in Biden's initial proposal, said Jorge Castro, a former Congressional tax aide during the Obama administration. "The reconciliation process is an option available to Congressional Democrats but that is a fallback" and an option that "is still no easy feat and is lengthy."