Moderate Democrats not monolithic about their budget concerns

Democratic group wary of House reconciliation package has different individual policy priorities

Clockwise from top left, Reps. Ed Case, Jim Costa, Carolyn Bourdeaux, Filemon Vela, Kurt Schrader, Jared Golden, Vicente Gonzalez, Henry Cuellar and Josh Gottheimer supported the budget only after House leaders committed to holding the infrastructure vote by Sept. 27.  (Photos by Bill Clark, Tom Williams and Caroline Brehman/CQ Roll Call)
Clockwise from top left, Reps. Ed Case, Jim Costa, Carolyn Bourdeaux, Filemon Vela, Kurt Schrader, Jared Golden, Vicente Gonzalez, Henry Cuellar and Josh Gottheimer supported the budget only after House leaders committed to holding the infrastructure vote by Sept. 27. (Photos by Bill Clark, Tom Williams and Caroline Brehman/CQ Roll Call)
Posted September 21, 2021 at 3:18pm

A group of centrist House Democrats is united in ensuring the chamber won’t vote on a reconciliation package unless it can pass the Senate. But they have individual policy priorities that could divide them on the final product.

Oregon Rep. Kurt Schrader, for example, is reluctant to support a package that’s even half the size of the $3.5 trillion topline party leaders settled on earlier this summer. “It would have to be way under $1 trillion for me to get remotely interested,” he said.

Hawaii Rep. Ed Case is opposed to another strategy Democrats have deployed in limiting the duration of programs they want to fund to keep the overall price tag down. Hiding the true cost of programs by making them temporary is not wise policy or budgeting, he argued.

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“No fiscal cliffs. No illusions of balance when the practical reality is that it’s unbalanced. No suspensions of any of these programs after three years, and we’re going to have to deal with it then,” Case said. “I’m looking for a package [in which] you’re all in for the budget window on these or not.”

Case and Schrader are part of a group of moderate Democrats who last month threatened to oppose the fiscal 2022 budget resolution needed to kick off the reconciliation process. They first needed to secure a deal decoupling that process from a separate Senate-passed infrastructure bill.

The centrist group supported the budget only after House leaders committed to holding the infrastructure vote by Sept. 27, and promised they wouldn’t bring a reconciliation package to the floor that couldn’t pass the Senate.

“That’s a pretty good deal. And we got nine members to stick together. When does that ever happen?” Schrader said, explaining his decision to support the budget after previously saying he’d oppose it.

Those nine Democrats, which also include Reps. Josh Gottheimer of New Jersey, Carolyn Bourdeaux of Georgia, Jim Costa of California, Jared Golden of Maine, and Henry Cuellar, Filemon Vela and Vicente Gonzalez of Texas, issued a joint statement Friday reiterating the commitments they got from leadership. “We appreciate the significant and patient efforts being devoted to forging a reconciliation measure that can pass both chambers of Congress,” they said.

The group of nine, along with Florida’s Stephanie Murphy, New York’s Kathleen Rice and potentially a few others who have yet to go public with their concerns, are prepared to oppose any House reconciliation package that doesn’t have the support of all 50 members of the Senate Democratic Caucus.

They’ve been in close contact with key Senate centrists, such as Kyrsten Sinema of Arizona and Joe Manchin III of West Virginia, as House leaders prepare to negotiate changes to their committee-approved products before bringing the package to the floor, likely next month.

“I do have some concerns. I know that some other members have concerns,” Cuellar said, declining to get into specifics. “We are working with leadership and the Senate to have a package that, as per our agreement, is to have 50 votes before we vote on anything on the House side.”

Case said moderates can oppose the rule that would be needed to bring the reconciliation package up for debate on the House floor if they don’t “have a very firm understanding that the Senate will actually vote for that bill.”

That unity on process does not mean the moderate Democrats will all agree to the final product or come down on the same side of debates over the inclusion or exclusion of specific policies.

“We’re not pretending to take a common position on the substance of the reconciliation bill,” Case said. “We do have different views on that.”

Spending divisions

One of the different views is over the topline. Sinema and Manchin have been vocal about their opposition to the $3.5 trillion figure the Senate Budget Committee negotiated with the White House earlier this summer. House moderates say the senators’ concerns mean the overall price tag will have to come down, but most aren’t fixated on a specific number.

“I look at what do we want to accomplish and what are the goals ... and how do we get there to make it work,” Cuellar said. “My caveats are: Don’t have duplication and don’t just fixate on ‘A higher number is the best way to go as we develop the safety net.’”

Schrader, however, has his $1 trillion ceiling. While he learned earlier from the budget debate to “never say never,” he said leadership will “have a tough time” getting him to vote for anything above that amount, even if the package is fully offset. He said he’s philosophically opposed to the left’s inclination to keep spending money on programs the federal government can’t afford to sustain.

Case is also concerned about spending, but he’s more focused on net cost rather than the gross price tag. He said that lawmakers have yet to see the House package or cost estimate but that the committee-reported pieces appear to spend far more than they would raise — a gap he wants to see erased in any final package.

“I support a number of the revenue generation measures and believe that that allows for a significant reconciliation bill that is compliant with both my expectation of paid-for, as well as [a bill that] would pass the Senate,” Case said. “And so I believe that the sweet spot is somewhere in the middle.”

Case, Schrader and Cuellar said they’re open to a previously negotiated exception for deficit spending on programs that are primarily designed to combat climate change. Moderates and progressives struck a compromise earlier this year in the House rules package to exempt COVID-19 and climate-related spending from pay-as-you-go rules that normally require deficit-increasing bills to be offset by corresponding spending cuts or revenue increases.

Schrader said that while he’s open to not paying for climate programs in the reconciliation package, the Ways and Means Committee has proposed enough revenue offsets that such an exemption may not be necessary.

Case said he would be comfortable deficit-financing “hundreds of billions” for climate-focused programs so long as Democrats don’t apply that definition too broadly.

“The only area that I can accept some further investment through federal debt or dynamic scoring is in specific climate change initiatives because I do believe that we need to invest in climate change-related initiatives, whether we can pay for them or not,” he said.

Policy disagreements

One costly proposal is the $150 billion the House Energy and Commerce Committee approved for a Clean Electricity Performance Program that would pay utilities if they boost renewable power sources by at least 4 percent over the previous year, or fine them if they don’t.

Case said he’s not studied the details of the program but he generally supports carbon fees or carbon dividend proposals so long as revenues are “plowed back into renewable energy initiatives.”

Schrader voted against the clean electricity program in committee. In an interview, he called it a “travesty” designed to fit within the budget reconciliation rules that require policy changes to have more than a merely incidental impact on the federal budget.

“It penalizes states like Oregon that have already done a lot of good stuff,” he said. “That 4.5 percent increase in renewables becomes harder and harder for states that have already done a lot in that arena.”

The clean electricity program is far from the only policy dividing moderates. Another is prescription drug pricing.

Most Democrats support legislation the House passed in the last Congress that would allow Medicare to negotiate prices on hundreds of prescription drugs and apply those prices to the commercial market.

But at least a handful of moderates, including Schrader, Rice and Murphy, prefer an alternative floated by Rep. Scott Peters, D-Calif., that would significantly limit the number of drugs subject to negotiation amid concerns about stifling innovation.

“I greatly respect my colleagues that have taken another position, but I don’t agree with them on this,” Case said in defense of the House-passed language, which has been estimated to reduce deficits by at least $500 billion over a decade. “If you’re going to water it down, that’s a revenue generation loss, and you then have to reduce your spending. So we’re back to practicalities.”