In the News

Washington Post: With bulk of their agenda on the line, Democrats gird for battle over $3.5 trillion budget package

By Tony Romm

f t # e
Washington, D.C., September 7, 2021 | comments

The fate of President Biden’s $3.5 trillion economic agenda hinges on work that’s slated to resume on Capitol Hill this week, as Democrats attempt to overcome their internal divisions and craft what could be the largest spending package in U.S. history.

The next few days could prove daunting for top lawmakers in the party tasked with assembling a bill that can satisfy their past promises to remake broad swaths of the American economy. The work is set to unfold primarily in the House beginning Thursday, when the chamber has scheduled a series of grueling marathon legislative sessions to toil over the finer details of its plans.

Biden and his Democratic allies have pledged to expand Medicare, commit new sums to combat climate change, raise taxes on the wealthy, and boost federal programs that aid low-income families and children. In doing so, they have made grand proclamations about the need for historic investments, especially in the penumbra of a coronavirus pandemic that has left millions of Americans facing financial ruin.

But significant political quarrels already have plagued the party, complicating its attempts to adopt a proposal as large as $3.5 trillion before the end of the month. Chief among their headaches is Sen. Joe Manchin III (D-W.Va.), who said last week that he would not support a package with that price tag and called on Congress to hit “pause” on its breakneck legislative pace.

Manchin’s threat created political complications even beyond the Senate, where Democrats possess only a tiebreaking majority and require his support to proceed. With no room for error, Democrats have been forced to confront the reality that they may have to compromise some of their own ambitions, not to overcome opposition from Republicans but rather to quiet dissent among their own ranks.

“If [Manchin] just wants to tank the whole effort, he just ought to say so,” said Rep. John Yarmuth (D-Ky.), the leader of the House Budget Committee, which oversees the spending process. “He’s playing this game that conceivably gives other members who might be on the fence some cover. That’s not helpful. I’m worried about it.”

But Yarmuth insisted he is optimistic about the road ahead, given polling he cited that shows Democrats’ plans are popular with the public. “It would be the largest single piece of legislation in history,” he said.

The precarious dynamic only underscores a tough political reality in Democrat-dominated Washington: Even with control of Congress and the White House, there are still limits to what the party can accomplish on its own.

Since the 2020 campaign that catapulted Biden and his allies to power, Democrats have rallied behind his oft-repeated promise to “build back better,” hoping to expand government to a level not seen in a generation. Their $3.5 trillion spending plan is a central part of that vision, which also includes a separate roughly $1.2 trillion measure to improve the country’s roads, bridges, pipes, ports and Internet connections.

Republicans joined Democrats in the Senate to adopt the infrastructure proposal in a rare overwhelming bipartisan vote last month. Some Republican lawmakers are expected to do the same when the House takes up the package later in September. But they have rejected the rest of Biden’s agenda, arguing another round of trillion-dollar spending could worsen the country’s fiscal troubles and intensify inflation. GOP leaders also have fought vigorously against its proposed tax increases, which would reverse the cuts they secured four years ago under former president Donald Trump.

To sidestep that Republican opposition, especially in the narrowly divided Senate, Democrats plan to advance their economic package through a legislative move known as reconciliation. Biden has described both spending plans in equally urgent terms, stressing last week they would help ensure future prosperity. “It’s about investing in America’s future, not about short-term stimulus. That’s not what we’re talking about,” the president said in a speech at the White House on the heels of a disappointing jobs report Friday.

First, though, Democrats actually need to agree on a bill.

At the center of the fight is the package’s price tag, since the final figure ultimately determines the policies that lawmakers can adopt. Moderates including Sen. Kyrsten Sinema (D-Ariz.) already have sounded public skepticism about shelling out as much as $3.5 trillion on reconciliation, while others, such as Manchin, have raised fears that too much spending would worsen the deficit at a time when prices are on the rise.

Adding to the trouble, Democrats also remain unsettled over exactly how to pay for the package, no matter its final size. Hoping to cover its costs in full, Biden has proposed a series of tax increases, including raising the corporate rate from 21 percent to 28 percent, while newly seeking to extract more revenue from wealthy families and investments. Senate Democrats have explored additional elements, including new taxes targeting executive compensation and carbon emissions, according a plan circulated among lawmakers last week and obtained by The Washington Post.

Some in the party see in the spoils of the 2020 election a mandate to rethink the tax code so that those who earn more ultimately pay the government more. But Democrats are not united on how to accomplish these aims, creating the potential for public sparring between party members as key legislative committees convene for a series of debates and votes starting Thursday.

One Democratic lawmaker, speaking on the condition of anonymity to describe the party’s internal deliberations, said they are already resigned to a corporate tax increase that is closer to 25 percent — and have yet to build enough support for other tax hikes targeting investments or corporate income earned abroad. “The money is just not there,” the lawmaker said, expressing a belief that the package is likely to come down closer to $2 trillion.

For now, House Speaker Nancy Pelosi (D-Calif.) has tasked each of the key panels to complete its work by Sept. 15, with the hopes of adopting the final reconciliation bill before the end of the month. Hoping to quicken the process, House Democrats also have huddled with their Senate counterparts over video and phone calls in recent days, aiming to try to address potential policy hurdles before they erupt in public view.

“We need 218 votes in the House, and we need a bill that can be passed in the Senate and signed by the president,” said Rep. Suzan DelBene (D-Wash.), the leader of the moderate-leaning New Democrat Coalition. She added that voting on policies that have the support of one chamber, but not the other, “doesn’t help anyone if we don’t get it across the finish line.”

But the tensions around taxes and spending for now have put centrists in direct conflict with Democrats’ more liberal wing, which had spent months encouraging Biden to go bigger. Many of these progressive Democrats see $3.5 trillion as their compromise, especially after recommending as much as double that amount for reconciliation earlier this year.

Click here to read the full article on the Washington Post.
f t # e