House adopts budget, greenlights reconciliation process

Committees can now get to work on fiscal package worth up to $3.5 trillion that Senate won't be able to filibuster

Ways and Means Chairman Richard E. Neal, D-Mass., said he plans to provide for enough revenue-raising provisions to offset whatever amount of spending the House committees collectively propose.  (Tom Williams/CQ Roll Call file photo)
Ways and Means Chairman Richard E. Neal, D-Mass., said he plans to provide for enough revenue-raising provisions to offset whatever amount of spending the House committees collectively propose.  (Tom Williams/CQ Roll Call file photo)
Posted August 24, 2021 at 4:11pm, Updated at 7:30pm

House Democrats on Tuesday adopted a budget resolution needed to unlock a filibuster-proof $3.5 trillion package of domestic spending and tax breaks and teed up a vote on a separate bipartisan infrastructure bill next month.

The 220-212 vote capped off an eventful 24 hours of negotiating between Democratic leaders and a group of 10 party moderates who had planned to vote against the budget unless the infrastructure vote came first. While they didn’t get that demand met, they did get leadership to agree to holding the infrastructure vote no later than Sept. 27, a few days before surface transportation authorizations are set to expire Oct. 1.

The budget was “deemed” adopted when the House adopted a rule setting debate parameters for the Senate-passed infrastructure bill and voting rights legislation. The rule also included language that ensures the infrastructure bill will be brought to the floor by Sept. 27.

The final rule the House adopted was the third iteration reported out of the Rules Committee during the flurry of negotiations. The chamber passed the voting rights measure later Tuesday before recessing until Sept. 20.

Leadership is hoping to have the reconciliation package, which committees have a Sept. 15 deadline to assemble, ready for floor action around the same time as the infrastructure bill with the goal of passing both by the end of September, House Majority Leader Steny H. Hoyer told reporters on a press call Tuesday afternoon.

How soon the reconciliation package is ready "will dictate to some degree the flow of legislation," the Maryland Democrat said. "We have not got a hard view on sequencing."

Change in strategy

The tight timeline, however, indicates leadership has backed off its previous strategy. Speaker Nancy Pelosi had been saying for months that the House would not vote on the infrastructure bill until the Senate passed the reconciliation package. But the House is expected to vote on reconciliation before the Senate does, and the Senate may not have time to weigh in on reconciliation before the Sept. 27 deadline for the House infrastructure vote.

Hoyer, when asked if that dynamic proves moderates effectively won the negotiations, said he thinks "everybody won." He said he’s talked to both moderates and progressives, and both sides were on board with the new plan.

"I have assured people, in my view, both are going to pass. Whatever the sequence, both are going to pass," Hoyer said.

Pelosi issued a statement committing “to pass the bipartisan infrastructure bill by September 27” and “to rally House Democratic support for its passage.” The statement was part of the agreement with moderates — that leadership would ensure progressives don’t attempt to defeat the infrastructure bill when it comes up for a vote. 

But progressives made no commitments, with several telling reporters they still want to ensure their priorities on “human infrastructure” like child care, education, paid leave, health care and climate are included in the reconciliation package. 

Rep. Ilhan Omar, the Progressive Caucus whip, doesn’t view the rule language setting up a vote on the infrastructure bill by Sept. 27 as guaranteed and said the vote could slip if the reconciliation bill isn’t ready. 

“There's still work that needs to get done and I don't believe that that's actually going to happen,” the Minnesota Democrat said. “If we are able to finish our work by the 27th by all means, let's have the vote. If we are not, we're going to wait until that work gets done." 

Preconference

Congressional leaders and the White House agreed to a $3.5 trillion topline for the reconciliation package in July. It’s expected to include enhanced child care subsidies; a new paid family leave program; clean energy incentives; affordable housing funds; an expansion of Medicare to cover dental, hearing and vision benefits; a pathway to legal status for undocumented immigrants; and more.

Democrats have proposed offsetting some or all of the cost with tax increases on households earning more than $400,000 annually and on corporations, as well as with savings from lower prescription drug costs. Moderates in both chambers have expressed concern with the scope of the package as well as the offsets.

House moderates were concerned their progressive colleagues who demanded the infrastructure bill be linked to the reconciliation package would try to force the House to pass a reconciliation bill that can’t get through the Senate. Sen. Kyrsten Sinema, D-Ariz., has said she won’t support spending $3.5 trillion and Sen. Joe Manchin III, D-W.Va., has expressed “serious concerns” about a package that big.

The House moderates say Pelosi has agreed to have her committee chairs coordinate closely with the Senate to effectively “preconference” the legislation.

“We said that whatever the House votes [on] will be something that the Senate Democrats and the House Democrats can agree [to],” said Rep. Henry Cuellar, D-Texas, who was one of the 10 holdouts. “Will it be 3.5 [trillion]? I don't think so, but we'll see what negotiations will come in.”

Cuellar said that commitment was important to him and other moderates who remember House leadership’s efforts in 2010 to force a vote on climate change legislation expected to raise consumer energy costs, which the Senate never took up.

Pelosi nodded to the preconference agreement in her statement, saying, “We must keep the 51-vote privilege by passing the budget and work with House and Senate Democrats to reach agreement in order for the House to vote on a Build Back Better Act that will pass the Senate.”

Action-packed September

The end of September will be action-packed as Congress will also need to pass appropriations legislation to keep the government funded before the fiscal year ends Sept. 30, as well as a measure to raise or suspend the debt limit.

The statutory debt limit was reinstated Aug. 1 and Treasury has said the extraordinary measures it is using to continue paying government debt obligations will run out this fall, although it’s been difficult to nail down a more exact estimate.

Leaders have signaled they are likely to attach a debt limit suspension to a continuing resolution extending fiscal 2021 funding levels and policy until agreement can be reached on the fiscal 2022 appropriations bills. Both are expected to be short-term measures kicking the deadline for action into December.

The Senate adopted the budget resolution earlier this month, so the House's action Tuesday is the last step before committees in that chamber can start marking up their sections of the reconciliation package.

Committees have a Sept. 15 deadline to have their legislation ready for the Budget Committee to assemble in the reconciliation package. Hoyer said he set aside the first two weeks of September as committee work weeks, which should provide the panels with plenty of time to complete their markups.

The combined instructions to House committees add up to no more than $1.75 trillion in deficit spending, but wiggle room is provided so that the tax-writing Ways and Means panel can include offsets for more if they can agree.

Ways and Means Chairman Richard E. Neal, D-Mass., said he plans to provide for enough revenue-raising provisions to offset whatever amount of spending the House committees collectively propose. 

“I intend, as the president requested, to pay for it,” he said.

Ways and Means will begin marking up its portion of the package the week of Sept. 6, likely starting on Sept. 9 and spilling into the following week. 

“I could see it going four or five days with a weekend interruption,” Neal said. 

Republican opposition

During floor debate on the rule, Republicans attacked the measure as a tax-and-spend budget and accused Democrats of internal disarray.

"What we just witnessed is a circus," Budget ranking member Jason Smith, R-Mo., said during his floor remarks. “This is the people’s house, this is not Pelosi’s palace.”

Smith said Democrats wrote the rule to deem the budget resolution adopted “because they can’t pass [Senate Budget Chairman Bernie Sanders'] budget.”

Bernie Sanders may have lost the presidential primary but his policies have won,” Smith said of the Vermont independent. “Bernie Sanders controls this chamber along with the liberal squad," he added, a reference to a group of Democrats including Omar, Alexandria Ocasio-Cortez of New York, Ayanna S. Pressley of Massachusetts, and Rashida Tlaib of Michigan.

Paul M. Krawzak, Laura Weiss and Jessica Wehrman contributed to this report.