House Democrats to skip budget markup, wait for Senate

Strategy acknowledges Senate Democrats will have a tough time with their own budget, the key first step in the reconciliation process

Rep. Stephanie Murphy, D-Fla., attends a news conference Thursday in the Capitol Visitor Center to introduce members of the select committee to investigate the Jan. 6 attack on the Capitol.  (Tom Williams/CQ Roll Call)
Rep. Stephanie Murphy, D-Fla., attends a news conference Thursday in the Capitol Visitor Center to introduce members of the select committee to investigate the Jan. 6 attack on the Capitol. (Tom Williams/CQ Roll Call)
Posted July 1, 2021 at 3:55pm

House Budget Committee Democrats have decided to forgo their own fiscal 2022 budget resolution and wait to see what Senate Democrats can muscle through their 50-50 chamber.

The panel's chairman, John Yarmuth, D-Ky., had hinted as much earlier in the week, noting the split within his party on the subject and uncertainty about whether the Senate would be able to follow through. Those plans solidified after a meeting with Democrats on his committee on Wednesday, he said.

“There was an overwhelming consensus for waiting on the Senate,” Yarmuth said in an interview Thursday.

Yarmuth also separately met Wednesday with leaders of the Congressional Progressive Caucus and the centrist Blue Dog Coalition, who he said are “all on the same page.” 

Budget member Dan Kildee, one of Democrats’ chief deputy whips, agreed that’s the general consensus on sequencing. 

“We really need to get a stronger signal from them before we get too far ahead of ourselves and not be able to actually deliver something. And the Senate is an uncertain question right now,” the Michigan Democrat said.

With buy-in from various party factions, House Democrats will likely end up adopting the Senate budget resolution, Yarmuth said, but he noted the final call will be made by leadership. 

House Majority Leader Steny H. Hoyer, D-Md., said earlier Thursday that a decision hadn't been made. The leadership team has not even fully discussed the strategy yet, a leadership aide added.

“I hope by the time we get back on the 19th of July, we have decided what we're going to do,” Hoyer said, referring to the next week the House is in legislative session after departing for its two-week Independence Day recess. The Senate left last week and returns the week of July 12.  

Both chambers need to adopt the same budget resolution in order to set up the filibuster-proof reconciliation package, and leaders in both chambers are aiming to get it done before the August recess. The budget resolution will provide spending and revenue targets for various committees to meet in drafting a massive economic package that Democrats hope to pass later this fall. 

Those reconciliation instructions could provide for as much as $6 trillion in new spending, although a compromise that can pass both chambers is likely to be somewhere around half of that. The instructions will also tell the tax-writing committees how much revenue to raise for offsetting some of the spending.

'Examined the landscape'

Because of the challenge of uniting Democrats around spending and revenue targets and the policies likely to come with them, the fiscally conscious Blue Dogs, many of whom represent swing districts, have always preferred to let the Senate lead.

But even the most progressive Budget panel members who pushed earlier this year to mark up a House version acknowledge that’s no longer the best strategy, Yarmuth said. 

“They've examined the landscape and said it really makes more sense to see what they come up with [in the Senate] and then not put some of our members in a position where they have to cast a vote that they don't need to cast,” he said. 

House Democrats have a four-vote margin to work with if they stick to their plan to adopt a budget resolution in the latter half of the month. That margin drops to three after a July 27 runoff between two Republicans vying to fill the open seat in Texas’ 6th District.

Oregon Rep. Kurt Schrader said in an interview last week that he’ll be voting against the budget resolution and any resulting reconciliation bill, while another moderate Democrat who wanted to remain anonymous expressed plans to vote against any budget resolution that provides reconciliation instructions for $4 trillion or more in new spending as progressives are pushing.

Senate Budget Chairman Bernie Sanders has been coordinating with Yarmuth as he continues to refine his budget proposal, an early outline of which called for nearly $6 trillion in spending and $2.4 trillion in revenue for a package —plus $600 billion in savings from lower prescription drug costs — that would net $3 trillion in deficit spending over the next decade.

Yarmuth said he expects the Senate panel to provide an updated outline early next week, which will allow House Democrats to judge whether it’s shaping up to be something they can support.

But that timeline could slip as he’s also heard that Sanders is struggling to unify his committee around a proposal. Yarmuth said he was told that Sanders has only locked in support of nine of the 11 Democrats on his panel, although he didn’t know who the two holdouts were. 

Sanders’ office did not return a request for comment, but sources familiar with the Senate’s planning expect the budget to go straight to the floor, skipping a committee markup that would end up in a deadlocked vote anyway. Under budget law, if the Senate Budget panel hasn't marked up a budget by April 1, any senator can introduce a budget on the floor of that chamber.

But even without a committee markup, Sanders needs every Senate Democrat to vote for the budget resolution. On the panel, he has a range of views to accommodate, with progressives like Rhode Island’s Sheldon Whitehouse pushing for significant investments in climate programs and centrist Mark Warner who wants to strike a balance on the reconciliation bill that will prevent a bipartisan infrastructure deal he helped negotiate from stalling.

Debt ceiling debate

Meanwhile, centrist Democrats are also warning House leaders not to try to ram through a debt limit increase in the reconciliation bill, which is allowed under budget rules. One problem with that approach is it requires Democrats to insert a specific, higher dollar amount for the debt limit, which creates an optics issue for some who don't want to be seen as voting for more debt.

An alternative is to "suspend" the debt limit, as Congress has mostly done over the past decade, which allows lawmakers to avoid voting on a specific dollar amount. That's also made easier by the fact that Democrats added a provision to House rules that lets them automatically "deem" a debt limit suspension as having passed that chamber upon adoption of a budget resolution. 

If the House adopts any fiscal 2022 budget resolution, regardless of which chamber originated it, it would suspend the debt limit through Sept. 30, 2022. With the so-called extraordinary measures at Treasury's disposal, lawmakers wouldn't likely need to deal with the debt limit again until after the midterms.

"That's the easiest way to do it," Yarmuth said.

But that's only easier for House Democrats, as their Senate counterparts would still need to round up 60 votes. The easiest option for both chambers is to raise the debt limit in a reconciliation bill, which would also require reconciliation instructions in the budget resolution.

Getting the votes to do so would still be difficult.

“We addressed the debt ceiling during the Trump administration in a bipartisan way. My hope is that we will be able to address the debt ceiling in a bipartisan way this Congress as well,” Blue Dog co-chair Stephanie Murphy, D-Fla., said in an interview Thursday.

Murphy said Blue Dog leadership communicated that message to Yarmuth in their meeting Wednesday, as well as in a Thursday meeting with White House counselor Steve Ricchetti, legislative affairs director Louisa Terrell and her deputy Shuwanza Goff.   

The most recent statutory debt limit suspension expires at the end of July. Yarmuth said Treasury Secretary Janet L. Yellen told him recently it's still too hard to predict when extraordinary measures would run out this time, because of the unusual economic circumstances surrounding the COVID-19 recovery. 

A vote to increase the nation’s borrowing limit, while routine and needed to prevent Treasury from defaulting on its obligations, is a goldmine for Republican attack ads. Thus vulnerable Democrats will likely be reluctant to vote for an increase that Republicans are not also backing.

Key Republicans, like Senate Budget ranking member Lindsey Graham, have said if Democrats want their help in raising or suspending the debt limit that the majority will have to include some provisions that seek to impose spending restraint.  

“We’ll consider all the options,” Speaker Nancy Pelosi told reporters Thursday. 

Paul M. Krawzak and Jennifer Shutt contributed to this report.