Congress

Democrats Release Sprawling Budget Plan as Senate Moves to Pass Bipartisan Infrastructure Bill

Tom Williams | CQ-Roll Call, Inc. | Getty Images
  • Democrats released their $3.5 trillion budget resolution Monday as they prepared to pass the $1 trillion bipartisan infrastructure bill.
  • The chamber will approve the infrastructure plan as soon as Tuesday, and then move "immediately" toward passing the budget measure, Majority Leader Chuck Schumer said.
  • Democrats' spending plan would invest in paid leave, child care, pre-K, community college, green energy and an expansion of Medicare, among a bevy of other programs.

As the Senate was putting the finishing touches on a bipartisan infrastructure bill Monday, Democrats released their $3.5 trillion budget plan that sets the stage for a massive investment in social programs and climate policy.

The plans fit into what Democrats consider a complementary, two-part agenda to boost the economy, strengthen the social safety net and attempt to curb climate change. The party will have to carry out a complicated legislative dance to get both proposals through Congress in the coming months.

First, the Senate could pass the $1 trillion bipartisan infrastructure bill as early as Tuesday morning. The plan, which calls for $550 billion in new spending on transportation, utilities and broadband, is expected to get through the chamber with Democratic and Republican support.

The Senate will then "immediately" move toward passing the budget resolution, Majority Leader Chuck Schumer, D-N.Y., told colleagues in a letter Monday. The measure would allow Democrats to pass up to $3.5 trillion in spending on climate policy, paid leave, child care, education and health care without a Republican vote.

Schumer aims to approve the measure in the coming days before senators leave for their August recess.

The budget plan recommends congressional committees craft the pieces of Democrats' bill by Sept. 15, days before the House returns from its August recess. Speaker Nancy Pelosi, D-Calif., has stressed she will not take up either plan until the Senate passes both of them.

Democrats have a tricky path ahead: They will need to keep every member of their Senate caucus on board with the budget bill and can afford no more than a handful of defections in the House. And they will attempt to pass a mammoth spending plan, paid for by tax increases on corporations and the wealthy, in the face of staunch opposition from Republicans who want to make the vote difficult ahead of next year's midterm elections.

Democrats and Republicans alike have trumpeted the infrastructure bill as an overdue investment to modernize transportation and kick-start the economy as the U.S. emerges from the coronavirus pandemic. It would put new funds into roads, bridges, airports, waterways, railways, public transit, water systems, the power grid and broadband, among other areas.

Still, Democrats see the $3.5 trillion budget plan as the main event. In a statement Monday, Senate Budget Committee Chairman Sen. Bernie Sanders, I-Vt., called it "the most consequential piece of legislation for working people, the elderly, the children, the sick and the poor since FDR and the New Deal of the 1930s."

While the budget resolution does not go into explicit detail about many policies, Democrats say their bill would include:

  • Expansions of paid family and medical leave
  • A buildup of child-care programs
  • Extensions of household tax credits, including the enhanced child tax credit implemented during the pandemic
  • An expansion of Medicare benefits to include dental, vision and hearing, and a reduction in the Medicare eligibility age
  • An extension of increased Affordable Care Act subsidies
  • Universal pre-K
  • Tuition-free community college
  • Tax incentives and grants to encourage adoption of green energy, manufacturing and transportation
  • Polluter fees on methane and carbon
  • Consumer rebates to encourage clean energy and weatherization in homes
  • Funding to increase the number of electric vehicles in the federal fleet

The proposal would not raise the federal debt ceiling. The Treasury started using so-called extraordinary measures this month to prevent the U.S. from defaulting on its obligations.

Democrats aim to pay for their spending plan through corporate and individual tax reform, along with increased IRS enforcement of existing rates. In a statement, Senate Finance Committee Chairman Sen. Ron Wyden, D-Ore., said revenue raising plans "will fall into four categories: multi-national corporations, the wealthiest individuals, enforcement against wealthy tax cheats and savings from other programs."

Sen. Elizabeth Warren, D-Mass., and Sen. Angus King, a Maine independent who caucuses with Democrats, are set to unveil a proposal to tax corporations at 7% on profits over $100 million they report to investors. A Warren aide tweeted that it would raise $700 billion from about 1,300 companies.

King preemptively defended the proposal against GOP opposition in a New York Times interview. "It's not socialism — it's an attempt to have a fair tax at a pretty low level for companies that would otherwise pay zero," he said.

Democrats have previously raised the prospect of hiking the corporate tax rate to 28% and increasing the top individual bracket to 39.6%.

The 2017 Republican tax law slashed the corporate rate to 21% from 35%, and cut the top individual rate to 37% from 39.6%. GOP senators opposed any tax increases as part of the bipartisan infrastructure bill.

Senate Minority Leader Mitch McConnell, R-Ky., has repeatedly called Democrats' $3.5 trillion budget plan "reckless."

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