Senate Majority Leader Charles Schumer, DN.Y., right, and Senator Bernie Sanders, I-Vt., Are seen at the U.S. Capitol on Monday, August 9, 2021.
Tom Williams | CQ Roll Call, Inc. | Getty Images
When the Senate was finalizing a bipartisan infrastructure bill on Monday, the Democrats released their $ 3.5 trillion budget, which creates the conditions for massive investment in social programs and climate policy.
The plans fit into what the Democrats believe is a complementary, two-part agenda to stimulate the economy, strengthen the social safety net and curb climate change. The party will have to perform an intricate legislative dance in the coming months to get both proposals through Congress.
First, the Senate could pass the $ 1 trillion bipartisan infrastructure bill as early as Tuesday morning. The plan, which includes $ 550 billion in new spending on transport, utilities, and broadband, is expected to come through the Chamber with support from both Democrats and Republicans.
Majority leader Chuck Schumer, DN.Y., informed his colleagues in a letter on Monday that the Senate will move “immediately” towards the adoption of the budget resolution. The move would allow Democrats to hand over up to $ 3.5 trillion in spending on climate policy, paid vacation, childcare, education and health care without a Republican vote.
Schumer wants to approve the measure in the coming days before the senators go on their August break.
CNBC policy
Read more about CNBC’s political coverage:
The budget recommends congressional committees draft the portions of the Democrats’ bill by September 15, days before the House returns from its August recess. Nancy Pelosi, D-California, spokeswoman has insisted she won’t adopt either of the plans until the Senate passes both of them.
The Democrats have a tricky road ahead of them: they have to keep every member of their Senate faction running on the draft budget and can’t afford more than a handful of defectors in the House of Representatives. And they will seek to get a mammoth spending plan paid for through tax hikes for the business and the rich, amid strong opposition from Republicans who want to make it harder to vote before next year’s midterm elections.
Democrats and Republicans alike have touted the infrastructure bill as an overdue investment to modernize transportation and boost the economy if the US emerges from the coronavirus pandemic. It would put new resources in roads, bridges, airports, waterways, railways, public transportation, water systems, the power grid and broadband, among other things.
Still, Democrats see the $ 3.5 trillion budget as the main event. In a statement Monday, Senate Budget Committee Chairman Senator Bernie Sanders, I-Vt., Called it “the most rigorous law for working people, the elderly, children, the sick and the poor since FDR and the New Deal”. the 1930s. “
While the budget decision does not go into explicit detail on many policy areas, Democrats say their bill would include:
- Extension of paid family and sick leave
- A structure of child care programs
- Expansion of household tax credits, including the improved child tax credit introduced during the pandemic
- An expansion of Medicare benefits to include dental, vision and hearing aids and a reduction in the Medicare age for eligibility
- An expansion of the increased benefits under the Care Allowance Act
- Universal before-K
- Tuition-free adult education center
- Tax incentives and grants to encourage green energy adoption, production and transport
- Methane and carbon polluter charges
- Consumer discounts to promote clean energy and weathering in households
- Funding to increase the number of electric vehicles in the federal vehicle fleet
The proposal would not raise the national debt ceiling. The Treasury Department started taking so-called extraordinary measures this month to prevent the US from failing to meet its commitments.
The Democrats want to pay for their spending plan through corporate and individual tax reform as well as increased enforcement of existing tax rates through the IRS. In a statement, Senate Finance Committee Chairman Senator Ron Wyden, D-Ore. Said the revenue-increasing plans “are divided into four categories: multinational corporations, the richest individuals, enforcement against rich tax evaders, and savings from other programs”.
Senator Elizabeth Warren, D-Mass., And Senator Angus King, an independent Maine sitting down with Democrats, will table a proposal to tax companies 7% on profits over $ 100 million that they report to investors . A Warren employee tweeted that he would raise $ 700 billion from approximately 1,300 companies.
King preventively defended the proposal against GOP opposition in an interview with the New York Times. “It’s not socialism – it’s an attempt to have a fair tax at a fairly low level for companies that would otherwise pay zero,” he said.
The Democrats have previously raised the prospect of raising the corporate tax rate to 28% and raising the top individual to 39.6%.
The 2017 Republican Tax Act lowered the corporate tax rate from 35% to 21% and the top tax rate for individuals from 39.6% to 37%. GOP senators rejected tax increases under the bipartisan infrastructure law.
Senate minority leader Mitch McConnell, R-Ky., Has repeatedly called the Democrats’ $ 3.5 trillion budget plan “ruthless.”
Subscribe to CNBC on YouTube.
