Senate Democrats announce $3.5 trillion budget agreement

Senate Democrats announced late Tuesday that they’d reached a budget agreement envisioning spending an enormous $3.5 trillion over the coming decade, paving the way for their drive to pour federal resources into climate change, health care and family-service programs sought by President Joe Biden.

The accord marks a major step in the party’s push to meet Biden’s goal of bolstering an economy that was ravaged by the pandemic and setting it on course for long-term growth—and includes a Medicare expansion of vision, hearing and dental benefits for older Americans, a goal of progressives.

But Democrats behind the agreement face possible objections from their rival moderate and progressive factions, and will have to work hard to convert their plans into legislation they can push through the closely divided Congress over what could be unanimous Republican opposition.

“We are very proud of this plan,” Senate Majority Leader Chuck Schumer, D-N.Y., told reporters. “We know we have a long road to go. We’re going to get this done for the sake of making average Americans’ lives a whole lot better.”

Biden was set to attend a closed-door lunch at the Capitol on Wednesday with all Senate Democrats “to lead us on to getting this wonderful plan” enacted, Schumer said.

All told, the ambitious proposal reflects Biden’s vision for making the most substantive potential investments in the nation in years, some say on par with the New Deal of the 1930s. Together with a slimmer, $1 trillion bipartisan effort of traditional road, highway and public works also being negotiated, they represent close to the president’s initial $4 trillion-plus effort that could reach almost every corner of the country.

The Democrats’ goal is to push a budget resolution reflecting Tuesday’s agreement through the House and Senate before lawmakers leave for their August recess. The resolution sets only broad spending and revenue parameters, leaving the actual funding and specific decisions about which programs are affected—and by exactly how much—for later legislation.

Nonetheless, approving a budget will be a major boon for the Democrats’ effort to enact their subsequent funding bill. That’s because the budget contains language that would let Democrats move the follow-up spending measure through the 50-50 Senate with just a simple majority, not the 60 votes Republicans could demand by using a bill-killing filibuster.

The later spending legislation will likely not start moving through Congress until the fall.

Separately Tuesday, a bipartisan group of senators continued working on a third measure that would spend around $1 trillion on roads, water systems and other infrastructure projects, another Biden priority. Biden and 10 senators—five from each party—had agreed to an outline of that compromise measure last month, and bargainers have worked ever since to flesh it out.

In discussing the budget agreement, Schumer and other lawmakers did not respond when asked if they had the support of all 50 Democratic senators, which they will need to succeed. They also have virtually no margin for error in the House, where they will be able to lose no more than three Democratic votes and still prevail.

Moderates like Sens. Joe Manchin, D-W.Va., and Kyrsten Sinema, D-Ariz., might still demand further changes to reduce the plan’s price tag and impact on already huge federal deficits. Progressives in both chambers might insist on beefing it up or other changes.

Sen. Bernie Sanders, I-Vt., the Budget Committee chairman, and other progressives pushed initially for a $6 trillion budget top line while party moderates insisted on a far lower price tag. Biden had proposed around $4.5 trillion.

The Democrats’ announcement Tuesday left many questions about their budget accord unanswered. These included how much it would raise through tax increases on the wealthy and corporations and other revenue to pay for its costs; how much would be spent on specific programs; and how Biden’s proposals would be curtailed or eliminated to fit into the legislation.

Schumer said the proposal would call for financing Biden’s budget priorities “in a robust way.” He also said it would include a priority of Sanders and other progressives: an expansion of Medicare, the federal health insurance program for older people, to cover dental, vision and hearing services.

Sanders said the agreement would end an era in which, he said, rich people and big companies weren’t bearing enough of the burden of financing government programs.

“Those days are gone,” he said. “The wealthy and large corporations are going to start paying their fair share of taxes, so that we can protect the working families of this country.”

Sen. Mark Warner, D-Va., a leading moderate who helped shape the budget package, said the measure would be fully paid for with offsetting revenue but provided no detail. Biden has proposed financing the measure with higher taxes on the wealthy and corporations and beefing up the IRS’s budget so it can collect more revenue from scofflaws.

The budget will include language calling for no tax increases on people making less than $400,000 a year, a Biden demand, or on small businesses. The provision was described by a Democratic aide who requested anonymity to discuss the negotiations.

On infrastructure, senators from both parties met Tuesday evening and their bipartisan deal appeared back on track, after days of disputes. Lawmakers said they were aiming for a new Thursday deadline to wrap up the details despite opposition from business leaders, outside activists and some GOP senators over how to pay for it.

The bipartisan infrastructure effort was thrown into doubt earlier Tuesday when Republicans said it was unlikely it would be ready for a vote next week, as hoped.

But senators exiting the meeting suggested they hadn’t so much resolved the questions over how to pay for the package but moved past theapparently accepting that some of the proposed revenue streams may not pass muster in formal assessments by the Congressional Budget Office, the lawmakers’ nonpartisan fiscal scorekeeper.

Manchin said he hoped that the CBO’s score, as it is called, would show that “everything’s paid for. If not, we’ll have to make some adjustments.”

Even if the bipartisan group can meet its new deadline for agreement, it’s still a long shot the bill would be ready for a vote next week.

Senators have struggled to agree to revenue streams to fund the $1 trillion plan, which includes about $579 billion in new spending beyond regular expenditures already funded by gas taxes and other sources.

At least 10 Republican senators would be needed to back the infrastructure bill, joining with all 50 Democrats to reach the 60-vote threshold because it would still be vulnerable to a filibuster.