A Mexican stand-off is considered a movie cliche at this point. Think about the climactic scenes where a bunch of people is pointing guns at each other.
It seems that Democrats in Congress are in the midst of a similar stand-off. The 50/50 split in the Senate has given considerable power to moderate Democrats like West Virginia's Joe Manchin and Arizona's Kyrsten Sinema. And, they have been flexing this power to establish their bipartisan cred by expressing concern about the debt and looking to reduce the size of spending bills.
Of course, this has dismayed more liberal members especially in the House, who believe that the Democrats need to use their majority status to fix the country's "physical" infrastructure and also invest in its "human" infrastructure with the $3.5 trillion reconciliation bill.
Moderate Democrats are on board with the $1.5 trillion infrastructure bill but have balked at the size and necessity of the reconciliation package especially given inflation concerns. However, this has angered liberals in the House who are now threatening to not pass the infrastructure bill until the reconciliation bill passes.
Of course, this is a complication and headache for House Speaker Nancy Pelosi, Senate Majority Leader Chuck Schumer, and President Joe Biden. The infrastructure bill had to get 60 votes which meant it needed Republican support. It's unlikely that they would get this support if they knew the reconciliation bill is linked to the infrastructure bill. The reconciliation bill needs only a simple majority in the Senate so could pass on a party-line vote.
Recently, Senator Manchin penned an op-ed in the Wall Street Journal that further angered Democrats when he said that they might have to push "pause" on the reconciliation bill especially given inflation concerns. House liberals countered by saying that the recent rise in coronavirus cases only adds to the urgency of passing these measures especially as there is no guarantee that they will retain power beyond 2022.
This back-and-forth has also led to an interesting change in dynamic as now House liberals are in favor of Biden's agenda, while moderates are pushing back. This is a 180 from the primaries, where House liberals were opposed to Biden, while his base of support was found with the moderates.
It's also quite possible that this is simply part of the typical, sausage-making process in Washington DC. The White House had to know that some parts of its $3.5 trillion package would be whittled away. The tough talk from moderates is an opportunity for Senators in red or purple states to show that they are not "yes-men" for the White House and willing to oppose the party's left-wing if necessary. House liberals get to show constituents that they are fighting to fulfill their campaign promises.
Failure to pass both bills is not in anyone's interest. What's most likely is that the $1.5 trillion infrastructure bill passes, while the reconciliation bill is reduced in size by 10-20% to give moderates a "win".