AUGUST 9, 2021
WASHINGTON, D.C. — Senate Democrats released an outline of the $3.5 trillion antipoverty and climate plan on Monday, further detailing their ambitions for a major overhaul of the nation’s education and healthcare systems that they hope to advance alongside a bipartisan infrastructure bill.
The antipoverty plan is set to offer universal prekindergarten, two free years of community college, and expanded Medicare to cover hearing, dental and vision care, among other provisions.
Democrats will turn to it after the roughly $1 trillion infrastructure package, which includes new spending on roads, bridges, transit and broadband internet and is expected to pass the Senate on Tuesday. Lawmakers said they had resolved a dispute over a new cryptocurrency regulation in the public works bill, though the solution may not receive an amendment vote.
The two packages represent almost the entirety of President Biden’s economic agenda, with Democrats shoehorning a variety of policy goals into the $3.5 trillion plan to sidestep Republican opposition in the Senate.
To cover the cost, Democrats are seeking to raise taxes on corporations and high-income households. The plan outlined by Senate Majority Leader Chuck Schumer (D., N.Y.) on Monday also includes offering a pathway to lawful permanent status for certain migrants to the U.S. and lowering the price of prescription drugs. It calls for a federal paid leave benefit, a series of energy tax incentives and a program to push the U.S. to receive 80% of its electricity from clean sources by 2030.
The legislation could “give tens of millions of families a leg up,” Mr. Schumer wrote in a letter to Senate Democrats Monday morning.
Republicans have assailed the proposal, arguing its tax increases and expansive spending would harm the economy. Senate Minority Leader Mitch McConnell (R., Ky.) on Monday decried “trillions more spending when inflation is already sticking American families with higher costs.”
Democrats on the Senate Budget Committee had previously reached an agreement on the $3.5 trillion top-line figure, with the additional materials released Monday providing a broader list of the party’s hopes for the package. The release of the budget outline will also allow Democrats to begin the formal process for writing and approving the bill.
Deciding on the specifics of the tax increases—as well as the duration and design of the spending proposals—will be one of several major choices Democrats will still need to make in the coming weeks as they craft the bill.
Additional provisions included in the blueprint are efforts to create more affordable housing, investments in technology and climate change research and potentially lowering the Medicare eligibility age.
The outline doesn’t include a measure to increase the U.S. government’s borrowing limit. Treasury Secretary Janet Yellen said Monday that Congress should raise the debt limit on a bipartisan basis.
Congress voted in July 2019 to suspend the debt limit until July 31, 2021, as part of a deal brokered by Trump Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi (D., Calif.). The Treasury uses emergency accounting maneuvers to conserve cash so the government can keep paying its obligations to bondholders, Social Security recipients, veterans and others, but those measures are expected to run out some time in the fall.
Republicans have said Democrats shouldn’t expect any GOP help with the debt limit and should raise the debt limit themselves as part of the broader plan.
While Democrats could amend the budget plan to include a debt-limit increase, the more likely path is that the issue is addressed in September, according to a person familiar with the matter. One idea Democrats are considering is a stand-alone vote to suspend the debt limit, the person said, which could put pressure on Republicans to support the measure or risk rattling financial markets if the vote fails. Lawmakers could also attach the measure to another must-pass bill, like government funding, to force the issue.
Mr. Schumer said the Senate will take up the budget plan after it wraps up the infrastructure bill. He has said that the Senate won’t break for its August recess until it has passed both the infrastructure plan and the budget outline for the $3.5 trillion plan.
Approving the outline for the bill, called a budget resolution, will help unlock a special process called reconciliation that will allow Democrats to advance the broad set of party priorities without any Republican support in the Senate. Mr. Schumer set a target of Sept. 15 for committees to submit their pieces of the legislation.
While all 50 Senate Democrats have rallied around approving the budget resolution, keeping them united on the legislation itself will be complicated. Some moderate Democrats have raised concerns about both the potential cost of the legislation and the tax increases proposed to pay for it. Sen. Kyrsten Sinema (D., Ariz.) said last month that she opposed a bill that costs $3.5 trillion.
Those concerns from moderates will contend with demands from progressive Democrats. Some progressives in the House have said that they won’t support the bipartisan infrastructure plan until the Senate also passes the $3.5 trillion bill. House Speaker Nancy Pelosi (D., Calif.) has lent her support to that position, saying she won’t bring up the infrastructure bill until the Senate passes the second package.
Democrats will also face procedural hurdles. Legislation passed through reconciliation must hew to a strict set of rules requiring its measures to directly relate to the budget, meaning some policy provisions, such as immigration reform, could be struck from the bill. Earlier this year, the Senate’s parliamentarian ruled that a push to raise the minimum wage to $15 an hour was inconsistent with reconciliation’s rules.
A large portion of the legislation will come from the Senate Finance Committee, which is tasked with many of the package’s largest priorities as well as raising the revenue to pay for it. It is charged with extending the recently-expanded child tax credit, crafting tax incentives to advantage workers, and providing long-term care for elderly and disabled Americans.
To lower the cost of prescription drugs, Senate Finance Chairman Ron Wyden (D., Ore.) said Democrats will seek to empower Medicare to negotiate drug prices.
Doing so could generate hundreds of billions in savings for the federal government, according to a Congressional Budget Office analysis of previous legislation in the House. Some Democrats have indicated opposition to elements of that House bill.
Savings generated by lowering drug prices is one of several tools Democrats hope to use to cover the cost of the legislation. Another is enhancing tax enforcement efforts at the Internal Revenue Service, a topic of contention in the bipartisan infrastructure talks that Democrats will now pursue along party lines.
The Biden administration has proposed raising the corporate tax rate to 28% from 21%, raising the top capital-gains rate, and adjusting how assets are taxed at death to raise more revenue. Tightening the net on U.S. companies’ foreign earnings and charging importing fees based on carbon emissions are among the measures Democrats are eyeing.
