Originally Published: 12 JUL 21 05:05 ET

By Lauren Fox and Clare Foran, CNN

(CNN) -- Democrats will face a critical month on infrastructure in July as they reckon with deep schisms in their ranks and questions over legislative strategy and policy specifics of a bill the party wants to position itself with ahead of the midterm elections.

The busy July will test Democratic congressional leaders -- Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi -- both of whom govern diverse caucuses and control narrow majorities where just a handful of members could bring the President's legislative agenda to a screeching halt.

Schumer and Pelosi are navigating a delicate balancing act over President Joe Biden's agenda amid calls from moderates for quick passage of a bipartisan bill, while progressives are focused on securing a more sweeping measure that can pass the Senate with only Democratic votes under a process known as budget reconciliation.

The infrastructure push is set to kick into high gear in the Senate when the chamber returns to Washington after the July 4 holiday recess.

Schumer has set an ambitious goal during the next session: pass the bipartisan infrastructure bill on the floor -- a product that currently has the backing of 11 Republicans but still faces resistance from liberal members in the Senate -- and advance a massive budget resolution, a blueprint that will guide what gets included in the Democrats' broader infrastructure package.

"My intention for this work period is for the Senate to consider both the bipartisan infrastructure legislation and a budget resolution with reconciliation instructions, which is the first step for passing legislation through the reconciliation process," Schumer wrote in a dear colleague letter on Friday.

Over the recess, aides worked around the clock to turn a legislative framework from the bipartisan infrastructure group into legislative text. Sources tell CNN the work is ongoing, but a source also tells CNN that it's possible Schumer could put the bill on the floor for a vote as soon as the week of July 19.

At the same time, Democrats are still trying to find consensus on a budget resolution, which will set the parameters for how big their own infrastructure and social agenda bill will ultimately be as the White House has been working closely to make it clear what their priorities are for that legislation.

During the recess, Schumer asked Democratic members to come up with a "unity" budget, which would have the backing of all the Democrats on the committee. But those efforts were still underway with little indication the budget would be ready to unveil before lawmakers returned.

As a result, key members of the Senate Budget Committee are set to meet early this week to begin fierce negotiations that will set the stage to begin the reconciliation process. Budget members are expected to complete their work soon on an overall budget resolution that will target the total amount of money Senate Democrats are willing to spend in a broad reconciliation package.

The proposal will then be sent to the House Budget Committee to use as a framework to begin the formal process of drafting the legislation. By law, all budget bills must originate in the House. According to an aide familiar with the process, negotiations this week will be "fast and furious," with the goal of having the proposal ready to go in a matter of days.

What remains an open question is just how much negotiators are willing to spend. Budget committee chairman and Vermont Sen. Bernie Sanders is pushing for a package that could be as big as $6 trillion. However, moderate members of the budget committee are hoping to settle on a number in the $2 to $3 trillion range.

The aide familiar with the negotiations said that while senators are nearing an agreement, they have yet to settle on a deal, and it's expected both sides will give some before the final proposal is revealed. Sanders, meanwhile, continues to publicly push for as big a package as possible.

"Sen. Sanders looks forward to passing the most consequential legislation for working people since the 1930s. A lot of work has gone into the effort and much more work needs to be done," Sanders spokesman Mike Casca said in a statement to CNN.

"Sen. Sanders wrote a $6 trillion dollar proposal to address the desperate needs of working people and the existential threat of climate change, and he's confident that Democrats will come together around a reconciliation bill that does just that."

In the House, Pelosi must also grapple with competing demands from moderates and progressives.

Pelosi has signaled the House will not vote on a bipartisan deal until the Senate first passes a reconciliation bill, saying at the end of last month, "there ain't gonna be no bipartisan bill, unless we have a reconciliation bill."

That stance has won praise from progressives, but some moderate Democrats have called for swift passage in the House of a bipartisan bill as soon as possible. The House Problem Solvers Caucus, a group of Democratic and Republican lawmakers, has endorsed the bipartisan framework and urged "an expeditious, stand-alone vote in the House."

Rep. Pramila Jayapal, a Washington state Democrat and the chairwoman of the Congressional Progressive Caucus, told CNN in an interview, "The reality is these are very slim margins in the House and we don't have the votes for a bipartisan bill as a standalone. That's our message from the progressive caucus. We have been very clear about it for some time that we are not going to do one without the other."

On how Pelosi has handled the process so far, Jayapal said, "We're very appreciative of her taking a strong position on this," and, "I do think she's been doing a really good job of navigating us through this and we hope that we're able to continue to all stay on the same page and that our priorities are included."

Pelosi allies throw cold water on the idea that timing will be an issue for passing a bipartisan bill and a reconciliation package, arguing that it's too early to speculate about when a bipartisan deal could clear the Senate and be ready for action in the House, but that it's unlikely to happen soon.

"There isn't even a Senate bill yet. They don't have a bill. The timeline is in flux," a senior Democratic aide told CNN.

In one sign of where the process stands, Pelosi was asked during a press call on Thursday if she had seen legislative text for a bipartisan infrastructure bill yet and replied, "no we haven't seen text."

In his dear colleague letter Friday, Schumer wrote, "our committees are working tirelessly with the White House and the bipartisan infrastructure group to turn their recent agreement into legislation."

Democrats will also need a critical mass of Republican support for the bipartisan deal to make it to the President's desk. Problems could arise if Republicans who have expressed support take issue in the weeks to come with the legislative text or the process Democrats employ to push forward with the deal and the reconciliation package.

Senate Minority Leader Mitch McConnell has said that Biden "appropriately delinked" the two issues after the President attempted to walk back earlier remarks when he said he wouldn't sign a bipartisan bill unless it came paired with a reconciliation proposal.

But McConnell has said that Biden must ensure that Pelosi and Schumer follow his lead and that if that does not happen then the "walk-back of his veto threat would be a hollow gesture."

McConnell said on Thursday in Kentucky there's "a decent chance" the bipartisan infrastructure package may come together in the weeks ahead but signaled that how it's financed may continue to be a sticking point.

"We've added quite enough to the national debt," he said, "this ought to be credibly paid for. That discussion is underway."

At the same time, McConnell underscored GOP opposition to Democratic efforts to pass a separate plan along party lines.

"This is a fight worth having. This is not the right thing to do for the country," he said of Democrats' plans. "I don't think they have a mandate to do it. And all this is going to unfold here in the next few weeks."