Senate Passes Democrats’ $3.5 Trillion Budget Blueprint

Senate Passes Democrats’ $3.5 Trillion Budget Blueprint

Democrats will face difficult choices as they work to transform the budget framework into detailed antipoverty and climate legislation

The Senate passed a $3.5 trillion budget blueprint early Wednesday, the first step in an arduous process designed to allow Democrats to push through a sweeping package of education, healthcare, climate and other provisions without GOP support.

The party line vote, 50-49, came just before 4 a.m., one day after the Senate passed a roughly $1 trillion bipartisan infrastructure package. It is an initial victory for President Biden and congressional Democrats who are seeking to pass as much of their legislative agenda as possible this year, before next year’s midterm elections overtake Capitol Hill.

“Senate Democrats have just took a massive step towards restoring the middle class of the 21st century,” Senate Majority Leader Chuck Schumer (D., N.Y.) said just after the vote. “What we’re doing here is not easy. Democrats have labored for months to reach this point. And there are many labors to come. But I can say with absolute certainty that it will be worth doing.”

Minority Leader Mitch McConnell (R., Ky.) said the blueprint was “full of reckless taxing and spending.”

But Democrats, who have slim margins in both chambers, will face difficult choices and negotiations, as they work to transform the budget framework into detailed legislation.

“Putting all the pieces together will be a challenge, but we’ve got a good place to start in terms of discussions that have already taken place,” said Sen. Chris Van Hollen (D., Md.). Lawmakers are expected to begin those negotiations over Zoom and phone calls during the August recess. Senate Majority Leader Chuck Schumer (D., N.Y.) had set a Sept. 15 target date for committees to submit their pieces of the legislation.

For much of the day Tuesday and into Wednesday morning, the Senate slogged through a raft of largely symbolic amendment votes known as vote-a-rama that precede the final vote on the budget resolution. The exercise gives lawmakers a chance to offer amendments often designed to force lawmakers from the other party to take tough votes or demonstrate their support for an issue.

While the amendments largely don’t shape the final law, they can portend future policy debates. The votes put on display Democratic divisions over raising taxes, which is expected to be one of the most challenging issues to resolve in the bill.

An amendment from Sen. Catherine Cortez Masto (D., Nev.) calling for “protecting family farms, ranches, and small businesses while ensuring the wealthy pay their fair share” failed when Sen. Kyrsten Sinema (D., Ariz.) sided with Republicans in opposition.

The Biden administration is pushing to tax unrealized capital gains upon death, an effort that has raised alarm among Republicans and some Democrats who worry about the potential impact of the changes on family farms. Ms. Sinema’s decision to side with Republicans on the amendment is a sign that Democrats may have difficulty reaching unanimous consensus on changing how unrealized capital gains are taxed.

Another tax amendment from Senate Finance Chairman Ron Wyden (D., Ore.) failed when three Democrats—Ms. Sinema, along with Sens. Jeanne Shaheen and Maggie Hassan, both of New Hampshire—voted against it. Mr. Wyden’s amendment called for raising taxes on the wealthiest 0.1% of Americans.

There was some agreement when senators voted by unanimous consent in favor of an amendment that would ban tax increases on small businesses that was introduced by Sen. Steve Daines (R., Mt.).

Meanwhile, an amendment from Sen. John Boozman (R., Ark.) passed with the support of four Democrats: Sens. Sinema, Joe Manchin of West Virginia, Mark Kelly of Arizona and Jon Tester of Montana. The amendment would prohibit the Agriculture Department from making fossil-fuel burning power plants ineligible for financing.

Democrats also attempted to neutralize a Republican attack when they all voted in support of an amendment by Sen. Tommy Tuberville (R-Ala.) that would cut funds to local governments that defunded police departments.

“There’s some people who said there are members of this deliberative body that want to defund the police, to my horror, and now this senator has given us the gift that finally, once and for all, we can put to bed this scurrilous accusation,” Sen. Cory Booker (D., N.J.) said about the amendment.

Later, all senators except three voted in support of an amendment by Sen. Josh Hawley (D., Mo.) to hire 100,000 law enforcement officers. Sen. Bernie Sanders (I., Vt.), Sens. Pat Toomey (R., Pa.) and Mike Lee (R., Utah) were the holdouts.

Senate Democrats on the Budget Committee agreed last month to spend roughly $3.5 trillion on a package, whose framework was fleshed out Monday. The plan is set to expand the safety net by offering a federal paid-leave benefit, universal prekindergarten, two free years of community college and expanded Medicare to cover hearing, dental and vision care, among other provisions.

It also seeks to combat climate change through a series of energy tax incentives and a program to push the U.S. to receive 80% of its electricity from clean sources by 2030.

Republicans have criticized the budget framework as an unprecedented deluge of spending that could fuel inflation and increase taxes for individuals and corporations.

“If they implement this radical transformation of our energy economy, you’re going to have a dramatic increase of gas prices and heating prices,” Sen. Lindsey Graham of South Carolina, the top Republican on the Budget Committee, said on the Senate floor Tuesday. “This is the worst thought-out idea I’ve ever seen. They’re just throwing every liberal idea and hoping it sticks to the wall.”

Republicans also balked at a component of the Democratic plan to include a pathway to lawful permanent status for certain migrants to the U.S.

To cover the cost of the package, Democrats are seeking to raise taxes on corporations and high-income households. Some moderate Democrats have raised concerns about both the potential cost of the legislation and the tax increases proposed to pay for it.

The House is expected to return to Washington the week of Aug. 23 to vote on the budget resolution, according to a letter from House Majority Leader Steny Hoyer (D., Md.) to House Democrats.

If the House passes a budget resolution identical to the Senate’s, Democrats can unlock a special process known as reconciliation that allows them to pass legislation with a simple majority in the Senate rather than the 60 votes most bills need. Doing so would enable Democrats to pass the $3.5 trillion package without GOP support in the evenly divided Senate, so long as they don’t lose a single member of the Democratic caucus.

Centrist Democrats, chiefly Sens. Manchin and Sinema, have already signaled possible concerns with the legislation. Ms. Sinema said last month she would oppose a bill that cost $3.5 trillion, while Mr. Manchin has indicated he has concerns about how it could affect the fossil fuel industry.

“I’m concerned about the energy and energy for our whole country—how we’re going to be able to maintain a reliable, affordable and dependable energy,” he said Tuesday.

The bill will also have to satisfy liberal Democrats, particularly in the House, where progressives have said they would oppose the infrastructure bill, if the larger budget package falls short of their ambitions.

“The $3.5 trillion in the Democrat-led budget resolution making its way through the Senate right now is much closer to what we need, but it still doesn’t go far enough,” said Rep. Jamaal Bowman (D., N.Y.). He also criticized the bipartisan infrastructure bill as insufficient. “In order to save millions of lives and have a chance at a thriving future economy, Democrats must take advantage of this moment and pass transformative legislation.”