By Tom Kozlik, Head of Research and Analytics

Both chambers of Congress are back in Washington and a significant legislative to-do list exists for lawmakers to manage. Once-in-a-generation infrastructure legislation is hanging in the balance as well. In meetings this morning, Speaker Nancy Pelosi begged for unity among Democrats in the House. However, political positioning over the recent weeks and months may finally be coming to a head; the Sept. 27 deadline for the House to vote on the over $1 trillion bipartisan plan is looming.

In my Sept. 20 commentary, I noted that the ball is in the Democrats’ court right now. I also indicated that the holdup is from progressive Democrats.

Negotiations are critical to the future of public finance friendly elements that were included in the Ways and Means draft of items, which could be included in the $3.5 trillion infrastructure package. Some of these items include a taxable direct-pay infrastructure bond program and the return of advance refundings with tax-exempts. I explained what they would mean for municipal entities in my Sept. 13 commentary.

I also indicated in my Sept. 20 commentary that even if the amount of allowed spending for the $3.5 trillion is decreased, the adjustment may not be a deal-breaker for the public finance friendly elements. However, I cautioned that much is going to have to fall into place politically for the $3.5 trillion budget reconciliation infrastructure package and the over $1 trillion bipartisan plan to materialize. I believe this scenario, however unlikely it may seem, is going to be the best chance for those public finance friendly elements to emerge.