• It looks increasingly likely that President Biden will lose his first Cabinet nominee. Senator Joe Manchin (D-WV) announced that he will vote against Office of Management Budget Director-nominee Neera Tanden over her past partisan tweets. Her nomination needs the support of one Republican, and both Republican Senators Susan Collins and Mitt Romney plan to oppose the nominee. Some people believe Neera Tanden could be the proverbial sacrificial lamb who will allow Senators to support other controversial nominees, like those for environmental posts or California Attorney General Xavier Becerra who has been nominated to be the Secretary of Health and Human Services. There are also rumors that Senator Manchin might flex his muscle and oppose more nominees. Ten of the President’s 23 cabinet nominees have been confirmed so far, with more hearings and votes slated this week.

• Senate Majority Leader Chuck Schumer (D-NY) has pledged publicly and in a private event I hosted last week that he will pass the $1.9 trillion COVID relief plan before the extension of enhanced unemployment benefits runs out on March 14. The House is expected to clear their bill this week and then the Senate will take it up under the budget reconciliation process which requires only 50 votes to pass it. Both Senator Kyrsten Sinema (D-AZ) and Senator Manchin have indicated they do not support a $15/hour minimum wage provision that is in this COVID relief bill, but they could be saved from having to play their hand if the Senate Parliamentarian concludes that an increase in the minimum wage does not fit within the arcane Senate budget reconciliation procedures outlined by the Byrd Rule. The Parliamentarian will rule on the minimum wage provision in the very near future.
• Last week, the White House sent its immigration bill to Congress. Senator Bob Menendez (D-NJ) and Rep. Linda Sanchez (D-CA-38) quickly introduced the legislative text to implement the bill in both Houses of Congress. The bill provides for a pathway to citizenship for undocumented immigrants who entered the country before January 1^st of 2021, raises the caps on immigrants from many countries, and provides special treatment for children. It is unlikely the bill will garner enough Republican support to get 60 votes in the Senate and comprehensive immigration reform cannot be accomplished through budget reconciliation where only 51 votes are needed. A bipartisan package is the only path, and that means the President’s bill will be broken into smaller and less sweeping pieces.
• Assuming Senate Democrats stick together and pass the COVID relief package, Leader Schumer has indicated he is looking to move quickly to a second, larger budget reconciliation package that would include infrastructure funding based on the Build Back Better plan from the Biden campaign. Democrats will look to pass a package with traditional infrastructure investment like roads, ports, and airports, new green energy incentives that will work to meet the Administration’s climate goals, tax incentives for infrastructure, and some other economic recovery items. There is a debate about whether to offset this spending or borrow more money which is possible because interest rates are so low. The federal gas tax, which has traditionally provided the money for the Highway Trust Fund, is no longer able to cover the fund so a new financing mechanism must be found. The most aggressive timeline has the House passing its infrastructure bill in March and the Senate doing its work by May. This timetable is unlikely to be met, but it gives a sense of how quickly Democrats would like to move on this issue.
• What about Republicans? Democrats have control of both the Senate and the House, so Republicans have some stark choices. Democrats used reconciliation to pass President Obama’s Affordable Care Act, and Republicans opposed it in lockstep and then used their opposition to their tremendous political advantage in the next midterm election. Will they do the same in 2021? It seems that some Republicans may vote for some of the Biden stimulus plan. But those Republicans who do not vote for the COVID relief bill will have a hard time voting for a larger infrastructure package unless Democrats find a way to pay for it.
• And what about bipartisanship? President Biden campaigned on his ability to work in a bipartisan way, but it appears from his recent statements that he has decided it is not worth waiting for Republicans on his signature priorities. That may change, but for now Democrats appear to be going it alone where they can.

• Would cover state Medicaid and CHIP programs’ COVID-19 vaccine costs for up to a year after the end of the public health emergency. 
• Includes incentives for those states that haven’t done so to expand Medicaid by allowing for a two-year, 5% bump to the federal government’s portion of Medicaid paid for traditional beneficiaries when hold-out states expand program eligibility.
• Cover 85% of COBRA premium costs for people who lost workplace coverage during the pandemic. NOTE: Of all the health care related provisions, this one could be stricken.
• Enhance Affordable Care Act tax credits for people earning below 400% of poverty level and limit premium contribution to 8.5% of income for any eligible exchange consumer. Allow anyone receiving unemployment benefits in 2021 to get the maximum ACA subsidy.
• Remove the cap on inflationary drug rebates in Medicaid. Medicaid requires a minimum 23% rebate on brand drugs. Companies pay an additional inflation rebate when they raise prices faster than inflation. This inflationary rebate is currently capped at 100% of the average manufacturer price.