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Democrats release $3.5T budget bill as infrastructure fight comes to a head

Senate Democrats issued their budget Monday for a $3.5 trillion package that pours funding into social programs, climate change initiatives and free education, queuing up a widely expected maneuver toward passage without GOP support.  

“When we took the majority in the Senate earlier this year, the American people entrusted us with a great responsibility: to make their lives better. I am happy to report that we are making great progress towards that goal,” Senate Majority Leader Chuck Schumer wrote in a letter Monday announcing the much-anticipated budget.

Indeed, the package is rife with priorities President Joe Biden has made planks of his presidency thus far. It funds universal pre-kindergarten, free community college for two years, paid leave, and an expansion of Medicare as well as elder care services and services for the disabled. It also includes investments to reduce prescription drugs.

The package features a raft of climate provisions that the White House said in a summary Monday would put the U.S. on track to meet the administration’s goal of 80% electricity and 50% economy-wide carbon reductions. Those reductions would come by way of new polluter fees for methane and carbon imports, the creation of coastal-resiliency programs, investments in the nation’s Interior Department to fend off drought and wildfire, the “electrifying” of the federal government’s vehicle fleet and buildings, and the first ever “Civilian Climate Corps,” to name a few.

The $3.5 trillion — to be spent over 10 years — would also be invested into public housing, green and sustainable housing, and the revitalization of veterans hospitals and buildings. Native American and American Indian tribes would see the largest single investment ever into infrastructure on their lands, and U.S. small business owners would see a boost in access to capital.

Contentiously for many Republicans in the Senate supporting a more conservative approach to immigration, the framework opens the door to immigrant laborers and their families. If passed as it stands today, the bill provides green cards to millions.

To pay for the package, the Biden administration has suggested raising corporate tax rates on the wealthy while keeping families who earn less than $400,000 annually out of the picture.

Democrats plan on using a legislative process known as budget reconciliation to advance the ambitious agenda. This would mean Democrats must have a simple majority or unanimous support among members of their party to pass the bill without any Republican support.

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That prospect looks close to insurmountable for now given steady opposition expressed by Democrats like Joe Manchin of West Virginia and Kyrsten Sinema of Arizona. Both lawmakers have griped over the package’s price tag, invoking reconciliation to remove the filibuster and how the package would increase the nation’s debt.

Instructions on how to handle the nation’s debt limit is glaringly omitted in the package released by Democrats.

Treasury Secretary Janet Yellen urged Congress in a letter Monday to increase the debt limit through “regular order,” and it was her second warning in as many weeks. The department is already utilizing what it describes as “extraordinary measures” to keep America from defaulting on its $28 trillion in debt. To waylay a possible default, the Treasury has reduced investments into federal retirement programs.

“During the last administration, Democrats and Republicans came together to do their duty three times. Congress should do so again now by increasing or suspending the debt limit,” Yellen wrote.

The Congressional Budget Office said in July it expects the government to run out of funding by October or early November if lawmakers fail to act.

Republicans wanted a debt ceiling included in Monday’s $3.5 trillion budget package, and Senate Minority Leader Mitch McConnell warned repeatedly that the GOP will not increase the debt ceiling.

“I could not be more clear. They have the ability. They control the White House, they control the House, they control the Senate. They can raise the debt ceiling, and if it’s raised, they will do it,” McConnell said last week.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement Monday that there was “no reason to borrow more for new permanent spending programs,” and that budget reconciliation should help the U.S. “reverse course, not leave open the possibility to make a bad situation even worse.”

“While lawmakers claim the $1.75 trillion of authorized borrowing will be covered by offsets largely proposed by the [Senate] Finance Committee and promises of long-term economic growth, they should have required it to be fully paid for in the instructions rather than punting the decision to the committees and hoping for magical economic gains that may never appear,” MacGuineas wrote. “Frankly, Congress has lost so much credibility on the fiscal front that one has to wonder when lawmakers say ‘we will pay for this later — we promise,’ whether they even believe it themselves?”

Over in the House of Representatives, Speaker Nancy Pelosi has vowed for weeks that the House would not vote on the separate $1 trillion infrastructure bill snaking toward passage in the Senate until this one is sorted out.

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A senior aide to Schumer said Monday that Schumer and Pelosi are in talks about how to proceed.

“Please remember that the resolution only includes the ‘top-line’ reconciliation instructions to the committees and that every senator will have opportunities to shape and influence the final reconciliation bill after adoption of the budget resolution,” Schumer wrote Monday.

The target deadline for the dozen congressional committees who will help draft the final iteration of the package is September 15 but that is also flexible.

Weeks of fraught debate are anticipated and not just between Democrats and Republicans. Within the Democratic Party’s wings, the Congressional Progressive Caucus is pushing to see the budget deal approved with all provisions for “human infrastructure” or social welfare services intact that were left out of the separate $1 trillion bipartisan infrastructure package working through the Senate.

For those farther left in the party, maintain improving roads and bridges is simply not enough to boost the U.S. economy and lift millions out of poverty.

The $1 trillion bipartisan infrastructure framework package inched closer to passage over a rare weekend work session.

On Sunday, the Senate voted 68-29 to end debate on a bevy of amendments that took more than a week to consider.

The 2,700-page-plus legislation, known as the Infrastructure Investment and Jobs Act, vows $550 billion in new spending for physical infrastructure, including investments into roads, bridges, railways, waterways and ports. It would increase discretionary spending by $415 billion.  

A final vote on that package is expected late Monday but will more likely fall in the wee hours of Tuesday morning. On Sunday, senators bitterly debated amendments that proposed the retooling of Covid-19 pandemic relief funding for infrastructure expenses and an amendment that focuses on raising funds through enforcing tougher tax regulations for cryptocurrency.

Tennessee Senator Bill Hagerty voted against expediting the amendment process Sunday and tried to have almost two dozen new amendments entered under unanimous consent. His attempt failed.

Fellow Republican Senator Chuck Grassley made his frustrations known.

“We have wasted all day Thursday, Saturday and now through Sunday. That’s enough time to vote on a multitude of amendments and we just sat around those three days, accomplishing nothing,” Grassley said.

Senator Todd Young, an Indiana Republican who helped hash out the bipartisan infrastructure framework to start, threw a new wrench into the works as well: Late Sunday night Young said he was “not yet comfortable” with how the bill was being paid for and even less comfortable with the Congressional Budget Office’s estimate that the bill would increase the nation’s deficit by $256 billion over the next decade.

“Nor am I comfortable with Speaker Pelosi’s continued insistence on tying passage of this bill to the Democrats’ $3.5 trillion reckless tax-and-spend budget proposal,” Young said Sunday.

Schumer has indicated he will launch right into debate over the $3.5 trillion budget resolution as soon as the infrastructure bill passes, kicking off what could be 50 hours of debate split between Democrats and Republicans.

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Federal Reserve

Treasury Secretary Janet Yellen urged Congress in a letter Monday to increase the debt limit through 'regular order,' and it was her second warning in as many weeks.

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