caroline: from bluebird raw headquarters in new york, i am carol -- from bloomberg world headquarters in new york, i am caroline hyde. infrastructure, the major deal pending in the senate. we had to the hill. the passage of a package that has lawmakers. then we dig deeper into the digital space, looking at the crypto compromise that lawmakers actually agree on.

and it would not be bloomberg if we did not hit infrastructure from the economic perspective. how will it be feeding into growth? and how will we pay for it all? romaine: let's get to washington to get an update on where we stand. let's bring it our washington correspondent. are we any closer to getting this done? we are getting headlines across the wire saying there are still concerns. >> it is definitely getting much closer. i just caught up with an aide from one of the senators that tomorrow they will start on the vote, then it goes into vote aroma, which could take as little as a half-hour to hours long depending on senators and how long they want to spend on this. i would say that agreement in terms of the cryptocurrency amendment, they came in together on one, in terms of senator to

me saying it is not as radical, there is nothing radical here. the cryptocurrency investors seem to be ok with it at the moment. that was one of the big hurdles. now it is really just about fine tuning it. this is a bill that is at least going to get past here in the senate. taylor: we know that especially with these bills, the devil is in the details. what fine tuning are you looking for? >> right now, you have senators giving their speeches in terms of what they agree on this when it comes to different amendments. i would say that the one thing we should all be looking out for, especially this cryptocurrency amendment, if it was to go forward, 100 senators all have to vote to take up that vote. if not, you would be stuck with the language in the current text of the bill. this is really about fine turning -- fine tuning who has

one vote and to get it done. then they would go to the resolution which sets up the framework for the budget resolution, the $3.5 trillion package. taylor: let's take a little bit deeper into this infrastructure package. dig. see what i did there? a bipartisan group of senators, that cryptocurrency requirement. it may not get a vote, as we were just hearing. let's get more on the impact on the crypto space with our cross asset reporter katie cry filled. what are you hearing that katie wright felt -- reporter katie greifeld. what are you hearing? katie: it is having a great day, which is kind of amazing because there is actually a real worst-case scenario. you do have this compromise between those two dueling

factions. even janet yellen has endorsed it. but it might not get a vote. if it does not, the original crypto language would be in the bill. that is the language that has the industry up in arms in the first place. there is the optimism, but it's not just going, it is ether as well. there is definitely a risk here. caroline: talk about exactly why they are up in arms. the know your customer, it really would stifle some of the growth in decentralized finance in particular. katie: it is a little in the weeds but if you look at the miles between these amendments, what it really boils down to is what entities qualify as a broker. because this entire language is concerned with what cryptocurrencies have to report

their transactions to the irs. the original language is too broad. it does not capture just brokers. you could have software developers, node operators caught up in that language. this current compromise narrows that a little bit. the crypto industry seems to be very happy with it. but it is unclear if it will be included in the bill. romaine: who is this crypto industry? they have organized into like adult lobbyists? katie: i have spent a lot of time talking to christian smith of the blockchain association. i have talked to asset managers and others. romaine: so they have all centralized? caroline: that is the irony of the whole situation, you have to centralize to support the decentralized. katie: it is really broad strokes, the whole industry, the asset managers, traders too, it

is amazing how much attention this is getting. caroline: katie keeps us across the board in terms of who she is speaking to. coming up, we will be talking more broadly, back to the world of invesco, where he will be talking about elements of the original 3.5 trillion human capital infrastructure package. this is bloomberg. ♪ ♪

>> i know that we are going to get this bill done in the next 24 hours or so and it is going to make a real difference for people in my home state who are looking at roads in deep need of repair, bridges past their useful life, and families literally sitting in mcdonald's parking lots trying to get connected to broadband because they don't have it at home. caroline: senator tina smith speaking earlier. on the senate floor, senators still voting around the infrastructure deal. jack dorsey of twitter, a big proponent of it going in cryptocurrencies, he is tweeting out that the amendment is being killed to get more military spending. there seems to be an argument between certain senators over defense bill spending and whether we will be killing the f that.

romaine: this is all the wrangling over that $550 billion bill. there are still multi trillion dollars package is on the table for the biden administration and the democrats to negotiate assuming they get this done. i want to bring in andy blocker. not only does he understand the government but he understands money and all of this -- and how all of this sort of intersects together. when you look at some of the wrangling going on right now ostensibly over a crypto measure but this is really about broader issues of how you pay for this. i wonder how much potential success there will be for a $3.5 trillion package. >> you hit the nail on the head. but i don't want to move too fast here. we are running into the goal line on this package but we are not there yet. part of it is because the liberals in the house are trying

to leverage this bipartisan bill. they are trying to lock in moderates to say, you need to sign in, blood of, that you will let us spend $3.5 trillion on the second bill. we still think they will pass it without being too tethered. today, i think it has to be in the $2 trillion range. caroline: the senator from vermont, bernie sanders, currently pushing against any bipartisan adoption of the cryptocurrency amendment. it looks as though he is blocking senator pat toomey's request for unanimous consent to adopt that amendment. taylor: this is where i kind of love that our worlds collide. caroline nails it as she does every day on cryptocurrencies. some of the municipal bonds, as we figure out how to build a

road and a bridge. some people were worried that build america bonds were not included. how are you think about the way in which we are doing this? >> this is the sausage making process of legislating. it is not pretty, not orderly, it does not always get the best policy, but overall you get to an outcome. they are still trying to push it in the house. not sure if it will make it in this one but it could make it in the next one. it is an ugly process, not pretty. but we think we will get there on the major things. romaine: the whole idea that the democrats, particularly joe biden, has pitched this idea that this really is not fiscal stimulus, this is more about longer-term investments in the economy. we know that the politics will always sort of pushback on that. but is there some timetable here

for the democrats, given that you have a midterm election next year and in three years time, a presidential election. >> the timetable for any midterm is the first year. they have until december to get the $3.5 trillion package done. if they have to move to the next session, to close. they have some runway. they need to get the first bill done i think in august, right now. once they do the budget for the second bill, they will have time to get the second one done. caroline: i am interested, when it gets done, if it gets done, how it gets done. your perspective on the priorities will get pushed through, whether or not you think that the infrastructure that really should be spent on is appropriately factored in at

the moment? >> if we are talking about the second human capital infrastructure bill, the key thing to get done, child tax credit, pre-k funding, community colleges, that is what biden ran on. expanding medicare. green energy. those are the keys that will have to be in there. some of those are popular even with republicans. a lot those are social spending. i think they can get all of that done. it is when they start to try to push it beyond that. all included in biden's bill. when you put in the congressional option, that is when it gets tough. caroline: the head of u.s. government affairs, really sort of digging into what has been happening across the board in terms of infrastructure spending. we have had some interesting breaking news at the moment,

just to reiterate, everyone focused on -- we understand that the cfo has been having to step down due to inappropriate personal relationships. we will have a kenai on some of the breaking news. romaine: i believe we have some more breaking news here. let's get right back down to capitol hill and our washington correspondent, annmarie hordern. >> just in the last five minutes , when i was previously telling you like things were going in the positive direction, we have seen a snag with senator bernie sanders saying he wants to block that amendment, meaning he is not on board with the fresh amendment we have seen, the bipartisan support of cryptocurrency. what that does mean, if they were to pass that legislation as it is today and vote yes, it would be the same text that has

a scope when it comes to the cryptocurrency industry. that is why you are hearing the likes of jack dorsey from twitter and others in the industry saying it needs to be a little bit more narrow. that is why -- you are seeing better -- you are seeing senator bernie sanders does not support that latest bipartisan debate. given the fact that they were able to come together on this crypto amendment we thought it would be a little bit more smooth sailing. taylor: and we are nearing that finish line, sort of at the 11th hour. so, would there be changes or are you thinking we vote on it as is? >> potentially, we could see a change to that amendment that may be senator sanders or others in his camp are more comfortable with. if that amendment was to get agreed upon. her liver, all 100 senators have to agree to move that forward. -- remember, all 100 senators

have to agree to move that forward. then it would move ahead. if not, you would see senators in washington voting on the text as is. carol: why are there -- caroline: wire the tit for tat's regarding defense spending coming into how one pays overall for the infrastructure bill? >> right now, the text is done. so, anything you see in terms of amendments, even the language, the industries are what they are trying to target, they could just be a tool to get their agenda forward. as you say, politicking, that is kind of what you are seeing here. interesting to see what the final text for some of these amendments will be. right now, senator sanders does not agree with that bipartisan

bill that is struck and also having the backing of the treasury secretary. romaine: we know the senate, they were supposed to recess last week, they sort of stayed on to get this thing done. is there any sense about the timetable, that they would actually leave without getting this done, or are they committed here to sticking around? >> it seems like they are committed to sticking around. the last two administrations were not able to get through a massive bipartisan infrastructure agreement. there are some jovial tones in washington, the fact that they were able to get to this point on infrastructure. one senate aide i spoke to said she thinks they're going to start the vote tomorrow at 11:00 a.m., but of course they can debate and each amendment can go on for hours. after that, they are going to move towards the budget resolution. the framework for

reconciliation. the timing could get interesting. the democrats all want to sign up for it but the republicans could drag their feet. all in all, the sense in washington is that they would get both of these measures done, then head out for their recess. taylor: thank you as always for keeping us honest. this really brings up this comedy $550 billion, how you want to pay for it. those questions are coming up because you are taking a look at debt and deficit which many have argued maybe unsustainable if it continues on this trajectory. we are taking a look at the budget deficit, which has been negative. we just came off of conversations with andy blocker, saying mansion, support what we can pay for, which is less than

$3.5 trillion. caroline: let's dig into how we pay for it. the senior economist at the penn wharton budget model. handwringing over how one does indeed pay for such enormous investments in the united states. the cbo not liking the way in which it pays for future earnings on that investment. what do you think about the deficit? >> the latest bill, as compared the compromise, definitely increases deficits and debts a little bit. they are depending a lot on money that is being returned from covid and a number of other programs that would have been returned to the u.s. treasury. but that money will now be spent on infrastructure, so that will raise the debt and deficit in the short and long run. romaine: when we talk about some

of these provisions, some would ask what you have a bill, you have proposals here that some would argue would actually contribute to gdp growth, do you need sort of a pay-in in order to justify that? >> certainly, for the infrastructure is going to be productive and it will help increase gdp. particularly over the long run, it takes a long time for infrastructure to become productive. but, it does matter how we pay for it. deficit spending has a habit of crowding out private capital investment. the factories, computers, the equipment that generate goods and services. so, deficit spending has a habit of offsetting some of the benefits from the public capital investment. different types of revenue sources have different effects. they may be able to find some that have less of an offset

against the productivity benefits from public infrastructure investments. taylor: i spent some time chatting with people on the municipal side. scott minerd, cio of guggenheim, has come out and said that issuing and paying for this, the municipal bonds or build america bonds, to make cities and states partner instead of just passive bystanders to the fed. why aren't we talking more about that? >> i think people have been looking to the federal government for a long time to sort of take an active role in infrastructure, particularly projects that span over multiple jurisdictions that made be difficult to agree on terms and tapes of projects to be billed. i think that is why they are emphasizing federal involvement. it is in some ways easier to get projects across because they are

lending incentives for we disabilities, state and local governments, to work together and build more infrastructure. it might be difficult for them to pursue these projects on their own. caroline: i want to go back to how, in june, the original infrastructure bill, higher gdp, where is now, versus the earlier version. can you remind us exactly what is going on that makes you feel that gdp is not going to be as injected with growth as the first version. >> in the first version, there were more sources of revenue. anticipating about $100 billion, the irs would be able to do more investigations and audits, and that would generate significant amounts of money. that will continue to raise money beyond the 10 year window. so, we anticipated that the debt

would go down in the long run and we would be crowding in private capital. that would lead to a higher gdp. the current bill spends a lot more money on things we think will increase the deficit and debt over the long run. romaine: as you model this, i wonder how you sort of factor in the intangibles, second-order benefits of these bills. you talk about $100 billion-plus for roads, bridges. you talk about public transit. airport facilities. these are all things that at least in the past, we have pointed to and said, this encourages private developments. i am saying, how do you factor that into a model when it is not necessarily a one-to-one equation? >> that is really the core of what we are doing. when we build public infrastructure, we are raising the productivity in our model

and theoretically in real life. you are making people's trucks more effective. they can get goods to where they are going faster. if you build better airports, there is less time waiting on the ground for landing slots times. these are reflected in gdp and in our model as well. some infrastructure may not be as well measured by gdp. they have significant health benefits for the communities that may not be captured by our analysis. caroline: we thank you so much for the analysis you have made. take that step of water. john huntley, we thank. senior economist at the penn wharton budget model, breaking down how complex the drafting of the bills, the fight over the pills, but within the modeling practice, what you can say adds real value in terms of gdp.

does cleaner water add to that? romaine: there is sort of this obsession in washington, for every dollar you spend, you have to have something to justify it. there is this great economic debate right now of whether you need that one-to-one offset. this crypto provision is more about closing that gap with regards to irs funding. taylor: that is certainly a good point to be made. caroline, we think about some of the tangible benefits. the intangible benefits, how do you measure productivity and what productivity is lost given the increasing debt load and debt burden? romaine: what happened to joe? taylor: did we miss joe? romaine: you are doing a great job. caroline: he is coming back tomorrow. we are doing more of a deep dive on crypto. he is going to be there to help

return to that conversation. taylor: can i leave at 4:30 tomorrow? caroline: no. taylor: "bloomberg technology" is next. romaine: this is bloomberg. ♪ ♪ (announcer) back pain hurts,

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>> from the heart of where innovation, money, and power collide in silicon valley and beyond. this is "bloomberg technology" with emily chang. emily: the $550 billion infrastructure plan. but, crypto regulations still he held up. we will get reaction from the circle