A Senate budget blueprint, which Democrats hope to pass this week, would ease passage of legislation that would mark the biggest expansion of the social safety net in nearly 60 years.,
Senate Democrats Begin $3.5 Trillion Push for ‘Big, Bold’ Social Change
A Senate budget blueprint, which Democrats hope to pass this week, would ease passage of legislation that would mark the biggest expansion of the social safety net in nearly 60 years.
Senator Chuck Schumer, the Democratic leader, right, and Senator Bernie Sanders in the Capitol on Monday. Mr. Sanders was in charge of drafting the resolution with his counterpart in the House.Credit…T.J. Kirkpatrick for The New York Times
WASHINGTON — Democrats formally began their push on Monday for the most significant expansion of the nation’s social safety net since the Great Society of the 1960s, unveiling a budget blueprint that would spend $3.5 trillion on health care, child and elder care, education and climate change.
The budget resolution, which Senate Democrats hope to pass by the end of this week, would allow the caucus to piece together social policy legislation this fall, paid for by raising taxes on the wealthy, large inheritances and corporations. Should all 50 senators who caucus with Democrats hold together, the measure could pass the Senate without a Republican vote, nullifying the filibuster threat.
Democrats plan to take up the measure as soon as the Senate approves a separate $1 trillion bipartisan infrastructure bill as early as Tuesday morning. Together, the measures could secure virtually all of President Biden’s $4 trillion economic agenda, rebuilding the nation’s roads, bridges, rail lines, water systems and electricity grid while expanding public education, social welfare and health care — and remaking the federal tax code.
But the two-pronged effort will test the president’s ability to keep the razor-thin Democratic majorities in both chambers united as his party’s leaders both work with Republicans and maneuver around them.
“It is big, bold change — the kind of change America thirsts for,” said Senator Chuck Schumer of New York, the majority leader, in a speech on the Senate floor. He added, “The American people don’t expect one piece of legislation to solve all our nation’s ills — no single law can do that — but we have to start in a bold, strong way.”
In a show of unity, Speaker Nancy Pelosi praised what she called “a transformative budget resolution that will achieve the vision of President Biden and congressional Democrats.”
Even with the blueprint yet to pass, rank-and-file lawmakers were jockeying to shape the specifics of the legislation it aims to create. The parameters laid out in the resolution and accompanying memos unlock the ability to draft a legislative package, setting the top line spending of $3.5 trillion and dividing it among the dozen committees assigned to hammer out details. With every Republican opposed, Democrats will need to remain virtually united in both chambers — a difficult prospect, given that moderates have already begun to raise concerns about the price tag.
Democrats hope to expand upon a number of provisions in the $1.9 trillion pandemic relief package they muscled past unanimous Republican opposition in March, the last time they used the fast-track budget reconciliation process to avoid the 60-vote filibuster threshold. That includes continuing a temporary expansion of health insurance subsidies offered through the Affordable Care Act and extending the duration of monthly payments now going to most families with children, a provision estimated to cut child poverty by nearly half.
But it is what they intend to create from scratch that would be transformative. The provisions include expanding Medicare to include dental, hearing and vision benefits, and possibly lowering the eligibility age. New funding would be provided for older or disabled Americans who want long-term care in their homes. Preschool and two years of community college tuition would be made free, effectively expanding the nation’s public education system.
Senator Bernie Sanders, the Vermont independent who is chairman of the Budget Committee, and other senior lawmakers want the United States to have an expansive paid family and medical leave system, like many other developed countries.
Pascal Jean Jaques teaching math to students at a prekindergarten program in Queens this year. The resolution includes new funding for universal preschool.Credit…James Estrin/The New York Times
Through the legislation, Democrats will also aim to reduce carbon dioxide emissions and prevent wildfires, fund research on the effects of climate change on agriculture, create a Civilian Climate Corps to carry out climate-related public works and make the nation’s coastlines more resilient to the damage caused by rising seas and stronger storms.
The plan also includes changes to the tax code to promote electric vehicles — including tax credits to consumers for purchasing electric vehicles and to automakers for building and selling them. It includes a plan to finance domestic manufacturing of electric vehicles and parts.
It also calls for provisions to lower the price of prescription drugs, which the Finance Committee chairman, Senator Ron Wyden of Oregon, said would include “making good on Democrats’ promise to allow Medicare to negotiate a fair price with Big Pharma,” a measure sought for years by Democrats, and by former President Donald J. Trump. It could provide what could be the largest one-time infrastructure investment for Native communities, according to summaries circulated by Senate Democrats.
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“We are going to go forward and pass this legislation because the time is long overdue for the U.S. Congress to make sure that we are creating the millions of good-paying jobs that the American people desperately need,” Mr. Sanders said. He drafted the resolution in close coordination with Representative John Yarmuth, Democrat of Kentucky, his House counterpart.
Stymied by Republican opposition, Democrats also aim to push the boundaries of the budget reconciliation process, which has strict rules about what can and cannot by shielded from the filibuster. It calls for a path to citizenship for millions of undocumented immigrants and provisions to beef up enforcement of labor laws and penalties for employers that violate them, although those policies may ultimately be left out for violating those budgetary rules.
Democrats also plan to include a Clean Electricity Payment Program, which would pay electric utilities to reduce their use of planet-warming coal and natural gas over the next decade and replace them with zero-carbon sources of electricity such as wind, solar and nuclear power. Democrats hope that structuring the program to involve federal expenditures will allow it to pass muster with the Senate parliamentarian, who will rule on what measures are acceptable under the Senate’s rules.
Tackling climate change could also help pay for some of the spending: it includes a “carbon polluter import fee” — essentially, a tariff on goods imported from nations that have weak climate change policies.
Paying for the package is not simply an accounting exercise but essential policymaking; Democrats plan to remake the tax code to increase taxes on wealthy people and corporations, vowing to maintain Mr. Biden’s promise to avoid raising taxes on people who make less than $400,000 in a year.
Democrats also plan to include a so-called Clean Electricity Payment Program, which would pay electric utilities to reduce their use of planet-warming coal and natural gas over the next decade.Credit…Erin Schaff/The New York Times
“We’ve got our toes on the line,” said Senator Elizabeth Warren, Democrat of Massachusetts, in an interview. “America has this opportunity to make investments in child care and expanded health care coverage, and fighting back against climate change, and at the same time, to require that everyone who enjoys the benefits this nation has to offer also pays a fair share in keeping the country running.”
Democrats are planning to undo key parts of the 2017 Republican tax law, including aiming to raise the corporate tax rate from 21 percent to at least 25 percent. They also have discussed raising the tax rate on investment gains for those earning more than $1 million a year to 39.6 percent, as well as clamping down on tax benefits that have enriched the private equity industry and its executives by allowing their lucrative fees to be taxed at low capital gains rates rather than as income.
In a memo, senior lawmakers also indicated that they plan to adjust the cap on how much taxpayers can deduct in state and local taxes, a provision that Mr. Biden did not originally include in his proposals, but one that remains a key priority for a number of lawmakers in high-tax states, particularly New York, New Jersey and California. (It will likely be a partial repeal, according to an aide familiar with the ongoing discussions.)
With an ongoing effort to get countries, including the United States, to adopt a global minimum tax of at least 15 percent, Democrats also hope to make significant changes to the international tax system to reduce incentives for companies to move their profits and operations abroad to tax havens. Lawmakers and aides have been discussing doubling the U.S. tax on foreign income to 21 percent.
After Republicans rejected beefing up the I.R.S.’s tax enforcement abilities as part of the bipartisan infrastructure package, Democrats are also likely to substantially bolster the tax collection agency’s staff and enforcement resources to help narrow the gap between what the federal government is owed in taxes and what it actually collects, which has reached an estimated $1 trillion per year.
Notably, Democrats declined to address the approaching statutory limit on the federal government’s ability to finance the country’s debt in the budget blueprint. It is a risky decision, given that Senator Mitch McConnell of Kentucky, the Republican leader, has said Republicans will not vote to raise the borrowing limit. A failure to raise the limit could prompt a default on the nation’s debt and a global economic crisis.
Democrats would like to use separate, bipartisan legislation to raise or suspend the debt limit, a strategic decision made in part because of the budget rules. Janet Yellen, the Treasury secretary, endorsed that approach in a statement on Monday, after employing “extraordinary measures” earlier this month to delay the official deadline to extend the Treasury’s borrowing authority.
But Republicans have warned that on the brink of being cut out of both the $1.9 trillion pandemic bill and the $3.5 trillion package they have branded “a reckless tax and spending spree,” they have little will to address the debt ceiling, which allows the government to pay debts already incurred. Their debt ceiling threat is potent in a chamber that normally requires at least 10 votes from their side to advance legislation.
“Democrats want Republicans to help them raise the debt limit so they can keep spending historic sums of money with zero Republican input and zero Republican votes,” Mr. McConnell said. He added, “If they want 50 lock-step Democratic votes to spend trillions and trillions more, they can find 50 Democratic votes to finance it.”
The Senate Budget Committee is looking to compile the entire package the week of Sept. 15, Mr. Schumer said in a letter to his caucus. It remains unclear how much the scope of a final package will change in order to win enough votes.
At least one moderate Democratic senator, Kyrsten Sinema of Arizona, has said she will support advancing the budget resolution, but not a final cost of $3.5 trillion. Some House Democrats have expressed reservations about the planned scope and size of the package, as well as a plan to withhold a vote on the bipartisan infrastructure package in their chamber until the social policy package is finished.
Reporting was contributed by Alan Rappeport, Coral Davenport, Margot Sanger-Katz and Nicholas Fandos.