Hours after the Senate advanced a bipartisan bill to improve the nation’s infrastructure, Democrats forged ahead independently on a second front — adopting a $3.5 trillion budget that could enable sweeping changes to the nation’s health care, education and tax laws.
“The Democratic budget will bring a generational transformation for how our economy works for average Americans,” Senate Majority Leader Charles E. Schumer (D-N.Y.) said after the vote.
Chiefly written by Sen. Bernie Sanders (I-Vt.), the $3.5 trillion blueprint sets in motion Democrats’ plans to expand Medicare, combat climate change and boost federal safety net programs, including those that target children and low-income parents. It paves the way for universal prekindergarten and new family leave benefits, and it aims to help immigrants obtain legal permanent residency status. Democrats aspire to finance the array of new initiatives through tax increases targeting wealthy families and profitable corporations, undoing the rate cuts imposed under President Donald Trump.
Lawmakers still must translate their newly adopted budget into fuller legislation, meaning the more difficult fights over its exact contours are set to begin in earnest in September. Adding to the challenge, one of the Senate’s most pivotal swing votes, Sen. Joe Manchin III (D-W.Va.), said hours after he voted on the measure that he has “serious concerns” about its price tag.
“Given the current state of the economic recovery, it is simply irresponsible to continue spending at levels more suited to respond to a Great Depression or Great Recession — not an economy that is on the verge of overheating,” he said in a statement.
For now, though, the successful adoption of the budget still unlocks for Democrats the next step in the process: a legislative move known as reconciliation. The maneuver allows the party, once ready, to bypass a Republican filibuster in the narrowly divided Senate — but only if the caucus remains united.
The display offered a political contrast with the bipartisan celebrations that immediately preceded the debate, as Democrats joined with Republicans in approving a roughly $1 trillion package to improve the country’s roads, bridges, pipes, and ports and Internet connections. But the outcome also reflected an important political reality in Democrat-dominated Washington, where lawmakers led by President Biden have made clear they do not plan to squander their narrow yet powerful majorities after promising to address economic inequality on the 2020 campaign trail.
Speaking on the Senate floor as the debate began, Sanders on Tuesday chided Republicans for “finding it hard to believe that the president, the Democratic caucus, are prepared to go forward in addressing the long neglected needs of working families and not just the 1 percent.”
“Today,” Sanders soon added, “we move this country in a very different direction.”
In adopting the budget, Senate Democrats continued inching Biden’s broader agenda one step closer to the president’s desk. Biden this spring unveiled jobs, infrastructure and families-focused spending plans totaling more than $4 trillion, part of his “Build Back Better” approach he adapted from the last election.
Democrats for months had promised to consider the president’s proposals on “two tracks,” in the words of Schumer (D-N.Y.), by seeking a bipartisan solution on infrastructure even as they proceeded on their own to secure Biden’s other priorities through reconciliation. Schumer’s tack essentially helped pressure the often slow-moving chamber into voting on both items in advance of a planned August recess.
But the coupling of the two spending plans also reflected the simmering tensions within the Democratic caucus, since some party lawmakers see the infrastructure deal as insufficient — and say they will only vote for it if they can also advance a robust budget that spends sizable sums on areas including climate change.
House Democrats have drawn the firmest lines in the sand, a position driven by the 96-member Congressional Progressive Caucus, without which House Speaker Nancy Pelosi (D-Calif.) cannot move either proposal through the chamber. The caucus led by Rep. Pramila Jayapal (D-Wash.) reissued its ultimatum on Tuesday, after the Senate adopted the infrastructure bill and began considering the budget.
“Our caucus is clear: the bipartisan bill will only be passed if a package of social, human, and climate infrastructure — reflecting long-standing Democratic priorities — is passed simultaneously through budget reconciliation,” Jayapal said in a statement. “We know that Congressional Democrats are committed to delivering immediate and transformational improvements for the lives of the American people, and will hold firm to meet that promise.”
But Democrats are not entirely in lockstep on the path ahead. Some moderate lawmakers in the House, for example, do not want to wait for reconciliation to advance infrastructure reform. And centrists in both the House and Senate have questioned the budget’s $3.5 trillion price tag — as well as the tax increases that might be required for Democrats to cover its costs. Manchin raised his voice Wednesday, days after a fellow swing vote in the chamber — Sen. Kyrsten Sinema of Arizona — similarly signaled concerns about adding to the deficit. Those battles are set to occur in meetings, hearings and floor debates in the weeks to come, making the vote in the Senate the beginning of a much harder, longer fight.
In doing so, they face an increasing barrage of attacks from Republicans, who say the budget would add to the federal deficit. Taking aim at the proposal in a speech Tuesday, Sen. Lindsey O. Graham (R-S.C.), the top Republican on the Senate Budget Committee, accused Democrats of “putting in motion a government that nobody’s grandchild can ever afford to pay.”
The GOP’s opposition also threatens to spill beyond the budget, as lawmakers led by Senate Minority Leader Mitch McConnell (R-Ky.) have said they are unwilling to supply any votes to address the debt ceiling, the statutory limit on how much money the United States government can borrow. McConnell said an increase or suspension of that borrowing limit should be a part of reconciliation, an approach Democrats have opted not to take, putting the Senate on a potential collision course ahead of a key deadline this fall.
Reaffirming their stance, a group of 46 Republicans late Tuesday published a public letter saying they would “not vote to increase the debt ceiling” in any way. “This is a problem created by Democratic spending,” concluded the letter, whose top signatories included McConnell and Sen. Ron Johnson (R-Wis.). “Democrats will have to accept sole responsibility for facilitating it.”
Senate lawmakers still adopted the budget measure after a lengthy debate that allowed lawmakers to offer unlimited, albeit mostly symbolic, amendments — an inside-Washington process known as a vote-a-rama. The proposals themselves serve as test votes, offering an early gauge for chamber support on key issues — or political cudgels, which Democrats and Republicans can later weaponize against each other during election season.
But some of the battles starting Tuesday afternoon also offered crucial insights about the economic policy debates still to come.
One amendment offered from Sen. Charles E. Grassley (R-Iowa), for example, targeted the state and local tax deduction, known as SALT, which some Democrats have sought to expand since it was reduced under Trump. The idea generally tends to benefit Americans who live in higher-cost cities, and some party lawmakers have demanded its inclusion as part of the upcoming, fuller reconciliation package.
Grassley’s amendment essentially floated the idea of halting changes to the SALT deduction, but the proposal failed, with Sanders and Sen. Elizabeth Warren (D-Mass.) voting against it. The outcome could ease some of the pressure on Democrats as they wade through a series of thorny tax issues later this year.
Democrats saw potential early trouble in an amendment that broadly addressed Biden’s proposal to change how wealthy heirs pay taxes on large inheritances. Currently, heirs only pay capital gains on increases in the value of properties that occur after they are passed down. Under the president’s plan, however, inheritors also would pay capital gains taxes on increases in the value of property from when they were first acquired by the prior owner. Sen. Kyrsten Sinema (D-Ariz.) joined with Republicans in scuttling the Democrat-offered amendment that sought to serve as a high-level gauge for the idea.