Senate Democrats on Wednesday reacted warmly to a broad outline of a $3.5 trillion budget reconciliation plan negotiated by party leaders, although progressives pushed for more spending while moderates offered some cautionary notes.
Initial comments on the nascent agreement suggest the conversations needed to convince all 50 Senate Democratic caucus members to vote for a fiscal 2022 budget resolution, the first step in the filibuster-proof reconciliation process, could take some time.
As a starting pitch Wednesday, President Joe Biden joined Senate Democrats for lunch in the Capitol to help Majority Leader Charles E. Schumer and Budget Committee leaders walk through the plan.
West Virginia Sen. Joe Manchin III, a crucial centrist swing vote, said he talked to Schumer after Biden left the lunch about some concerns he had.
One is whether the $3.5 trillion in spending would exacerbate the recent trend of rising inflation. He said he plans to talk to economists for their views, saying, “I want to make sure we’re not throwing caution to the wind.”
Manchin is also worried that climate provisions would go too far in eliminating fossil fuel energy sources. “I said you move our country away from fossil and there might be another country that will step to the plate and do the research and development that will fix the emissions that are coming from fossil now,” he said.
Progressives, meanwhile, are evaluating whether the $3.5 trillion will be enough to meet Biden’s calls for universal child care, free community college and national paid leave.
Sen. Elizabeth Warren, D-Mass., had been among a group of progressives in both chambers calling for a minimum of $700 billion for child care, but on Wednesday she seemed open to a lower amount. “What I’m pushing for is that we are committed to universal child care. We’re slicing up the money now to figure out the right ways to make that happen,” she said.
The budget resolution will provide reconciliation instructions to committees of jurisdiction divvying up the $3.5 trillion in spending, as well as instructions to the Finance Committee on how to offset that total with a yet unspecified combination of tax increases and health care-related savings.
Democrats also said they’d rely on “long-term economic growth,” or dynamic scoring, to create some offsetting revenue. Committees of jurisdiction would then draft the implementing legislation this fall.
Schumer wants the Senate to adopt the budget resolution, as well as pass a separate bipartisan infrastructure bill that will require 60 votes to move through regular order, before the chamber departs for its August recess. He told reporters Wednesday that he was still confident about that timing, though he conceded there “are a few little glitches.”
Democratic unity on the reconciliation plan will face one of its biggest challenges when the budget resolution comes to the Senate floor.
Adoption of any GOP amendments, particularly those aimed at vulnerable Democrats, could lead to a drawn-out process in which the House and Senate “pingpong” the budget resolution before reaching a consensus.
Senate Budget ranking member Lindsey Graham, R-S.C., who called the Democratic deal “a tax-and-spend plan from hell,” hinted Wednesday that the upcoming marathon voting session known as a “vote-a-rama” could be the longest yet. “I guess records are meant to be broken,” he said.
The Senate’s vote-a-rama on the fiscal 2021 budget resolution, used to pass a COVID-19 relief reconciliation package in March, went through the night and took about 15 hours. Amendment debate on that reconciliation bill was a bit more drawn-out, lasting more than 25 hours, including a lengthy delay for further negotiations with Manchin.
The budget resolution will not provide a detailed breakdown of how the $3.5 trillion would be spent or offset, but Democrats have to have some idea in order to provide individual targets to each committee contributing to the package.
Senate Banking, Housing and Urban Affairs Chairman Sherrod Brown said he doesn’t know what his allocation will be but he believes it’ll be enough to accomplish goals he’s set for affordable housing. That includes funding for public housing units and lead removal and upgrades to existing units, more low-income housing vouchers and new homebuyer downpayment assistance, the Ohio Democrat said.
On climate change, the Senate proposal follows Biden’s calls for investments in clean energy, electric vehicles, environmental resiliency infrastructure and a civilian climate corps. It would also propose new methane reduction and polluter import fees.
On health care, Democrats’ budget plan envisions extending Medicare coverage to dental, vision and hearing benefits, extending the March coronavirus relief package’s expansion of premium tax credits that help subsidize insurance costs for low-income earners, closing the “coverage gap” in states that refused to expand Medicaid and expanding home and community-based services.
The plan also calls for reducing patient spending on prescription drugs, likely by allowing Medicare to negotiate prices, as one of the budgetary offsets. But the outline did not provide a specific policy approach or indicate how much savings would be achieved from drug pricing provisions.
Most of the package will be paid for through tax increases on high-income individuals and corporations, including targeting multinationals’ foreign earnings. The budget resolution will include language prohibiting tax increases on families making under $400,000, small businesses and family farms.
The outline also envisions revenue from increasing IRS tax enforcement, but some of that is already being used as an offset for the bipartisan infrastructure bill.
And it says long-term economic growth will be counted to help get to a total of $3.5 trillion in offsets, although it’s not clear whether dynamic revenue can be counted toward hitting reconciliation targets.
In 2017, the Joint Committee on Taxation said Republicans’ tax overhaul would generate an extra $385 billion in tax receipts, but budget rules precluded them from counting that as an offset for more tax cuts.
House plan uncertain
Senate Budget Chairman Bernie Sanders, I-Vt., initially proposed spending $6 trillion but agreed to $3.5 trillion in a compromise with his colleagues. He spent most of Wednesday touting the agreement as a means to drafting “the most consequential legislation since the 1930s,” but he also suggested the House should shoot higher.
“I would like to see more money in the proposal myself, more money,” Sanders said. “And I hope the House will be able to do that.”
House progressives are likely to advocate for more funding in some areas after seeing the details of the Senate proposal, Congressional Progressive Caucus Chair Pramila Jayapal said on a press call Wednesday.
“We’re going to push as hard as we can to add to particular places where we feel we need to do more in order to deliver on our promises,” the Washington Democrat told reporters.
Jayapal said she spoke with Speaker Nancy Pelosi and told her progressives will communicate “places where we want to do more, and we’ll figure out how that gets done.”
If progressives push for more than $3.5 trillion, it could complicate a decision House Budget Committee Democrats made before departing for the Independence Day recess not to mark up their own budget resolution.
Blue Dog Democrats, many of whom are “Frontline” program members whom the party considers vulnerable for reelection, have said they don’t want the House to vote on something separate that the Senate wouldn’t accept.
House Democratic leaders haven’t made any decisions and are still discussing those process questions, according to a leadership aide. Meanwhile, Pelosi touted the Senate-White House agreement in a letter to colleagues as a “victory for the American people” that House committees would be working to turn into eventual legislation.
Jayapal welcomed the Senate’s plan to add to Biden’s economic proposals in expanding Medicare to provide dental, hearing and vision benefits, as Sanders and House progressives had pushed. She hopes it will also lower the Medicare eligibility age but said no commitment has been made to include that provision.
Progressives will also need to see details on the tax provisions. “That is a very critical piece for us to make the tax system more fair,” Jayapal said.
She was pleased with the inclusion of immigration provisions in the deal, saying the budget resolution will “include the funding that we thought it would take to include a pathway to citizenship for Dreamers” as well as foreign-born individuals who have been granted temporary protected status, farmworkers and “essential” workers.
Jayapal said spending on some programs will be cut back to fewer than 10 years to keep the price of the package down. But she added that the goal is to make new benefits available long enough for Americans to “understand what they are getting” so they insist on extensions or permanency — a strategy she credited Warren for pioneering.
“I think the things that we have identified as our priorities for the Progressive Caucus are broadly popular and populist policies, which is why it makes it very difficult once you’ve given them to Americans to take them away,” Jayapal said.
Jessica Wehrman contributed to this report.