Sinema deals blow to Democrats’ budget reconciliation target

Arizona Democrat says $3.5 trillion budget outline is a little too pricey

Sen. Kyrsten Sinema, D-Ariz., leaves a meeting of a bipartisan group of senators and White House aides to negotiate an infrastructure package in the Capitol in June.  (Caroline Brehman/CQ Roll Call file photo)
Sen. Kyrsten Sinema, D-Ariz., leaves a meeting of a bipartisan group of senators and White House aides to negotiate an infrastructure package in the Capitol in June. (Caroline Brehman/CQ Roll Call file photo)
Posted July 28, 2021 at 5:34pm, Updated at 6:19pm

Democratic hopes for a $3.5 trillion reconciliation package this fall dimmed a little Wednesday when Arizona Sen. Kyrsten Sinema said she won't support a price tag that high.

Without any Democratic votes to spare in the evenly divided Senate, Sinema’s statement signaled trouble ahead for a package designed to implement most of President Joe Biden’s domestic agenda.

With Republicans united in opposition, Democrats want to use budget reconciliation to pass the sweeping initiative on education, child care, paid family and medical leave, and climate change measures without the risk of a filibuster.

But that strategy demands party unity, which Sinema threatened to undermine if the cost of the package isn’t lowered.

“While I will support beginning this process, I do not support a bill that costs $3.5 trillion -- and in the coming months, I will work in good faith to develop this legislation with my colleagues and the administration to strengthen Arizona's economy and help Arizona's everyday families get ahead,” Sinema said in her statement.

The objection raised by the first-term centrist Democrat likely won’t disrupt the Senate’s more immediate task of adopting a budget resolution before the August recess. That resolution will contain the instructions needed for a future reconciliation bill, and Sinema said she would support “beginning this process.”

While the resolution could set maximum spending, revenue and deficit targets for various committees of jurisdiction, the actual spending — and offsets which Democrats have promised — would be determined by the reconciliation bill that comes later.

Even so, Sinema’s statement underscored the stakes for Democrats this fall, when just a single defection could derail the mammoth legislative package — and potentially Biden’s domestic legacy in his first term.

Party leaders could be whipsawed between moderates like Sinema, who want to keep spending down, and progressives seeking a more robust package. Senate Budget Chairman Bernie Sanders, a Vermont independent, initially sought a $6 trillion budget target, before agreeing to scale it back to $3.5 trillion.

Democrats have said they intend to find ways to pay for most of the proposed new spending, which would occur over a decade, so as not to dramatically increase deficits. Biden has called for tax increases on corporations and upper-income households, while promising not to raise taxes on anyone making less than $400,000 a year.

Republicans, who have trashed the reconciliation plan as a tax-and-spend folly that would trigger runaway inflation, delighted in Sinema’s public objection.

"I was certainly pleased,” Senate Minority Leader Mitch McConnell, R-Ky., told the Fox Business Network. “She is very courageous."

Infrastructure linkage

Sinema’s warning on reconciliation came on the same day that she and others in a bipartisan Senate group announced agreement on the details of an infrastructure plan that would provide $550 billion in new spending over five years.

Republicans have warned against any attempt by Democrats to link the two packages. And Sinema’s statement could give reassurance to Senate Republicans that passage of an infrastructure bill doesn’t guarantee passage of a reconciliation bill.

"I think any assurances that can be given are helpful," Senate Minority Whip John Thune, R-S.D., said July 13. "You know, if Sinema, for example, or [Joe Manchin III, D-W.Va.] , if they have a hard ceiling on what they would vote for reconciliation-wise or what they would vote for tax increase-wise that they would be willing to make public or something like that, all that helps."

Manchin hasn't really commented since the $3.5 trillion budget target was unveiled. But previously, he'd said he couldn't really see supporting anything north of $2 trillion, given the difficulty of finding acceptable offsets.

In the House, Speaker Nancy Pelosi has said repeatedly that she would not bring a bipartisan infrastructure bill to the floor for a vote until the Senate passes a reconciliation bill.

But if Sinema and perhaps Manchin have their way, the package the Senate presents to the House may be a disappointment to progressives who see perhaps their last chance to "go big" before potential losses in the 2022 midterms.

Rep. Alexandria Ocasio-Cortez warned in a tweet that Sinema was playing with fire — and that the Arizona senator's stance could result in Democrats' entire fiscal agenda going up in flames.

"Good luck tanking your own party’s investment on childcare, climate action, and infrastructure while presuming you’ll survive a 3 vote House margin," the New York Democrat tweeted, "especially after choosing to exclude members of color from negotiations and calling that a 'bipartisan accomplishment.'"

Though less pointed, Sanders had a similar message when he talked to reporters later on Wednesday.

"At the end of the day, two pieces of legislation, the bipartisan bill and the budget reconciliation bill, have got to pass the House and Senate. It is my absolute conviction that you're not going to have a bipartisan bill unless you have a reconciliation bill of $3.5 trillion," Sanders said. "The working families of this country, the children of this country, the elderly people of this country, deserve to have their needs met. And we intend to do just that."

Sanders nonetheless said he was "very happy" that "next week we're gonna have 50 votes in order to pass a $3.5 trillion budget resolution."

Niels Lesniewski, Lindsey McPherson and Joseph Morton contributed to this report.