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Democrats release $3.5 trillion budget blueprint as Senate prepares to finish infrastructure debate

The Capitol at dusk. (J. Scott Applewhite/AP)

Senate Democrats on Monday released a sweeping $3.5 trillion budget blueprint that proposes to expand Medicare, combat climate change, and boost federal child care and education programs as lawmakers prepare to take the next step toward advancing the central elements of President Biden’s economic agenda.

The scope of the spending outlined by Democrats is vast, reflecting the party’s grand ambitions to grow the size and reach of the federal government to a level not seen in decades. The measure paves the way for new funding to enroll students in universal prekindergarten, help immigrants obtain legal residency and lower prescription drug prices for seniors, along with a slew of additional efforts that coincide with promises Biden and his allies made during the 2020 election campaign.

In releasing the document, Democrats pledged Monday that their package would be financed in full through proposed tax increases on profitable companies and wealthy families. The resolution, which sets up a process to craft full legislation in the weeks ahead, is expected to gain the support of only the chamber’s 50 Democrats — forcing the party to rely later on a legislative move known as reconciliation to bypass Republican opposition and avert a likely filibuster.

The budget is the second component of Biden’s broader economic ambitions set to come before the Senate this week. Lawmakers also are expected to approve another major element: roughly $1.2 trillion in new investments targeting the nation’s roads, bridges, pipes, ports and Internet connections. Republicans are set to join Democrats overwhelmingly in advancing the infrastructure bill, which the Senate negotiated with the White House.

Despite the rare political accord, however, the GOP has adamantly opposed Democrats’ budget measure and pledged to vehemently fight it, arguing that it would worsen the deficit and wrongly unwind the tax cuts they adopted four years ago. Both proposals face a complex path in the House, where Speaker Nancy Pelosi (D-Calif.) has pledged not to take up one without the other.

For now, Sen. Bernie Sanders (I-Vt.), who led the committee that drafted the resolution, on Monday described the effort as historic. He touted the budget as 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.”

“When we go forward and do that, when we protect our children and the elderly and the environment, we are going to create millions of good-paying jobs, put people to work rebuilding this country in a way that is long, long overdue,” Sanders said.

The two expected votes mark major political milestones for the Senate as well as for Biden, months after he unveiled his jobs- and families-focused plans calling for more than $4 trillion in new spending. The president long has maintained a desire to work with Republicans to pass considerable swaths of his economic agenda — even as he has made clear that Democrats will not squander their narrow majorities in Congress to accomplish their goals.

The budget and infrastructure measures technically are separate, yet they are politically intertwined. In the Senate, Majority Leader Charles E. Schumer (D-N.Y.) has labored to move both proposals in tandem on a tight timeline ahead of lawmakers’ planned August recess.

“Many folks called that two-track process unrealistic; many others said it’s unachievable on such a short timeline and in such a slow-moving chamber,” he said Monday. “But we have managed to steer two trains at the same time. There have been some bumps. There have been some delays. But the Senate is on track to finish both tracks.”

Some liberal-leaning Democrats have insisted that they will not support one tranche of spending without the other, arguing that the bipartisan public-works bill on its own is insufficient. The demands have been especially potent in the House, where Pelosi cannot afford to lose many votes if she hopes to adopt either economic package.

Yet the party’s more centrist wing in recent weeks has expressed its own trepidations, especially around the hefty price tag. For example, Sen. Kyrsten Sinema (D-Ariz.) signaled in late July that she would vote to adopt a budget and begin the work of crafting legislation to carry it out — even as she remains concerned about its overall cost.

“I have also made clear that while I will support beginning this process, I do not support a bill that costs $3.5 trillion — and in the coming months, I will work in good faith to develop this legislation with my colleagues and the administration to strengthen Arizona’s economy and help Arizona’s everyday families get ahead,” she said in a statement at the time.

For now, the Senate’s budget blueprint specifically paves the way for significant new spending on child care and education, as Democrats look to fulfill a promise to make community college free for two years. The budget resolution also opens the door for lawmakers to extend a recent set of expanded federal tax credits that help families with children.

Another bucket of spending would target the environment, addressing Democrats’ concerns that the bipartisan infrastructure deal would not go far enough to address issues related to the warming planet. On the same day that the United Nations released a new report warning about the grim consequences of sustained carbon emissions, Democrats proposed new investments to crack down on pollution and authorize new clean-energy tax policies.

The budget resolution further allows Democrats to pursue significant changes to Medicare, including an expansion to cover dental, vision and health benefits. And Democrats have opted to try to seek “lawful permanent resident” status for perhaps millions of immigrants as part of the reconciliation process, embarking on a political journey that could find them tangling with the Senate parliamentarian over when the idea is allowable under procedural rules that narrowly restrict them to proposals that affect spending and taxes.

The budget deal puts the onus on the Senate’s top tax-writing panel, the Finance Committee, led by Sen. Ron Wyden (D-Ore.), to cover the costs of the massive package. That sets the stage for thorny fights even within the Democratic Party over the size of potential tax increases on families, investors and businesses.

“More broadly, the American people are with us on these issues,” Wyden said in a statement. “They pay their taxes with every paycheck while the world’s wealthiest individuals and most profitable corporations pay little to nothing or cheat by not paying taxes they do owe.”

Democrats opted against including one significant element: an increase in the debt ceiling, the statutory limit on what the government can borrow to pay its bills. Congress missed a key deadline to raise or suspend the ceiling at the end of July, meaning lawmakers have only a few months to avert a potential fiscal crisis that would put the country at risk of default. Democrats instead want to address the issue outside of the context of the budget, an approach backed by the Treasury Department, but doing so could put them on a collision course with Republicans threatening to withhold their votes over spending concerns.

The budget resolution arrived Monday as lawmakers lumbered toward a final vote on the infrastructure deal. The Senate started its infrastructure debate in earnest last week, as Democrats and Republicans joined to advance the public-works package assembled by a bipartisan group of 10, led by Sinema and Sen. Rob Portman (R-Ohio).

“Every president in modern times has proposed a big infrastructure package, and yet we never seem to get it done,” Portman said in a floor speech Monday. “This is going to make a difference.”

The strong bipartisan support initially appeared to pave the way for the Senate to adopt the infrastructure proposal swiftly, then immediately pivot to the budget debate. But lawmakers were soon stymied as a result of objections raised by Sen. Bill Hagerty (R-Tenn.), who has sought to slow the proceeding out of concern about the proposal’s cost. Hagerty has pointed to an official analysis from the Congressional Budget Office, which shows that the infrastructure plan could add $250 billion to the deficit, even as its sponsors contend that its costs would be fully funded.

Hagerty’s opposition prevented the Senate from adopting the bill over the weekend, requiring the Senate to run its long procedural clock and setting up a vote early Tuesday. But his stance affected more than just the hour of lawmakers’ work: It contributed to a standoff between Democrats and Republicans about amendments to the bill as well.

Much like the discussion to speed up voting, which requires the chamber’s full backing to occur, so, too, must lawmakers agree in full just to consider potential tweaks to the infrastructure measure at this stage. With no agreement on time, Democrats played political hardball on amendments, resulting in a spiraling fight that prevented both parties from trying to make changes.

The standoff kept lawmakers from resolving lingering disputes, including a fight among members of both parties over provisions targeting cryptocurrency. The measure seeks to require investors and brokers to disclose more information to the government for tax purposes, but critics say the section has been written so broadly as to be unworkable and damaging to the nascent industry.

Talks proceeded for days between two camps of lawmakers — one led by Sens. Wyden, Cynthia M. Lummis (R-Wyo.) and Patrick J. Toomey (R-Pa.), and another by Sen. Mark R. Warner (D-Va.) with the backing of Portman. Even as they forged a potential compromise, they did not have a viable avenue to offer it on the Senate floor after lawmakers objected to adopting it through unanimous consent Monday.

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