Budget blueprint for massive spending package starts to take shape

Senate Democrats, White House officials to meet again Tuesday as they seek to make key decisions this week

Sen. Debbie Stabenow, D-Mich., says she and her colleagues are working to get budget outline done "as soon as possible." (Bill Clark/CQ Roll Call file photo)
Sen. Debbie Stabenow, D-Mich., says she and her colleagues are working to get budget outline done "as soon as possible." (Bill Clark/CQ Roll Call file photo)
Posted July 12, 2021 at 11:35pm

Senate Democrats hope to reach agreement as soon as this week on the topline spending and revenue numbers for reconciliation instructions they plan to include in their fiscal 2022 budget resolution.

Budget Committee Democrats huddled late into the night Monday with Senate Majority Leader Charles E. Schumer, D-N.Y., and White House aides Brian Deese, National Economic Council director, and Louisa Terrell, legislative affairs director, to discuss the budget reconciliation package they plan to use to enact most of President Joe Biden's economic proposals.

Senators leaving the meeting just after 9 p.m. Monday said the group plans to meet again Tuesday evening as they work to finalize an agreement on the spending and revenue targets.

“We certainly want to get it done as soon as possible just because it takes time, the whole process of writing things,” Michigan Sen. Debbie Stabenow, a member of the Budget panel and Democratic leadership, told reporters.

Sen. Chris Van Hollen, D-Md., said “there's a very decent chance” the committee and Schumer will reach an agreement in their Tuesday evening meeting that they can present to the broader Democratic caucus later in the week.

Once an agreement is reached on spending and revenue targets, the figures would be turned into instructions to various committees to flesh out into implementing legislation for Biden's climate change and "care economy" plans.

Those directives to the committees will be the central element in the budget resolution, which itself is nonbinding but allows the use of reconciliation, a powerful procedural tool to circumvent a Senate filibuster. That's critical because Democrats want to pass trillions of dollars in new spending on child care, education, paid leave and health care programs that Republicans don't support.

Senators leaving Monday’s meeting said they made progress but have not yet reached agreement on any spending or revenue numbers. They declined to say whether they’ve moved off the $6 trillion, 10-year spending target Budget Chairman Bernie Sanders, I-Vt., previously floated, or narrowed the gap between that and a lower ceiling centrists have posited should be somewhere between $2 trillion and $3.5 trillion.

[Sanders budget plan would spend more, tax less than Biden]

The 11 Budget Committee Democrats -- ranging from progressives like Sanders and Rhode Island’s Sheldon Whitehouse to centrists like Virginia’s Mark Warner -- are looking to reach an agreement among themselves on the budget resolution and reconciliation instructions before pitching it to the entire caucus.

'A happy medium'

Senators left the meeting with different ideas about when an agreement on topline numbers would be reached. But the consensus seemed to be that coalescing around numbers this week would be ideal, as the Senate races to adopt a budget resolution and pass a bipartisan infrastructure bill before departing for August recess.

Sen. Jeff Merkley, D-Ore., said the goal is to have agreement on the topline numbers by Thursday, though Sanders declined to commit to that timing.

Earlier Monday, Sanders met with Biden at the White House to discuss the budget reconciliation process. He emerged from that meeting predicting that Senate Democrats will “reach a happy medium” between progressive and conservative senators’ demands to get the 50 votes needed to advance a budget resolution.

Sanders said after his meeting with Biden that he was still working off the $6 trillion proposal he pitched weeks ago, despite others in his caucus saying they couldn’t vote for that much new spending. “People have their different points of view, and we're going to work it out,” he said.

After the meeting in Schumer’s office Monday night, Sanders declined to offer a specific figure but said there was “widespread agreement” to work toward “a multitrillion-dollar bill” that would be “the most consequential piece of legislation for working families in the modern history of this country.”

“That is not easy to do and we’re working as hard as we can,” he said.

Van Hollen said the Monday discussion focused on various elements of what would go into the reconciliation package, like climate, health care, education and workforce training. The group was “trying to sort through everyone's conception of what it means to actually make significant progress in these issues,” he said.

Merkley said senators discussed “adjustments” they felt needed to be made to Biden’s proposals.

Warner declined to comment on the meeting other than to say the group made “great progress.”

Schumer said he and the Budget panel members had a “great discussion.”

“Everyone’s moving together,” he said.

Schumer said in earlier floor remarks that the committee was "close to finalizing a budget resolution." But after Monday night's meeting, Budget members said they’ve not even reached a final decision on whether the reconciliation package will need to be fully offset with tax increases and other savings.

Sanders, Van Hollen and other Democrats argue that one-time spending on things like infrastructure could be deficit-financed.

“I think that's a really legitimate point,” Stabenow said. “To me, we've just got to put it all together. … These kinds of large negotiations of course are never done, until it's all done.”

To that point, an agreement among the 11 Budget Committee Democrats likely won’t be the final product as other senators not on the panel, like West Virginia’s Joe Manchin III, will want to have a say.

[Democrats mull keeping debt limit out of budget reconciliation]

One thing the group did not discuss was the debt limit, lending further credence to predictions that Democrats would try to tackle that through regular order.

“The debt limit is not part of the overall discussion,” Van Hollen said.

Stabenow also said the debt limit hasn’t been discussed yet but that’s not indicative of a final decision not to try to raise it through reconciliation.

'Two-track' process

Complicating the drafting of a budget resolution is the two-track approach Democrats are taking on infrastructure spending. The first track, a bipartisan framework on so-called “hard infrastructure" -- things like roads, bridges, water and broadband projects -- is not guaranteed to result in legislation that 60 senators can support.

“We're proceeding on the expectation that we'll have a two-track process,” Van Hollen said. But he acknowledged the fate of the bipartisan bill is uncertain, especially as Republicans are raising concerns about the offsets.

Sen. Susan Collins, R-Maine, one the senators that negotiated the framework, said “there are a lot” of issues that remain to be resolved.

One of the revenue raisers in the bipartisan framework some Republicans have taken issue with is increasing the IRS budget by $40 billion over 10 years to step up tax enforcement. The bipartisan group predicted that spending would net $100 billion in revenue over the same period, but that has not materialized in the Congressional Budget Office's analysis of the proposal, according to Sen. Jon Tester, D-Mont.

“They’re charging for the additional IRS [spending] but not the money coming back from the additional enforcement ... at least that’s my understanding,” said Tester, a member of the bipartisan group developing the infrastructure bill. Nonetheless, Tester predicted negotiators would figure that out and work through other issues in time to finalize bill text this week.