Democrats release $3.5 trillion budget blueprint as Senate prepares to finish infrastructure debate

WASHINGTON - Senate Democrats released a sweeping $3.5 trillion budget blueprint on Monday that proposes to expand Medicare, boost federal child care and education programs, and invest new sums to combat climate change, as party lawmakers prepare to take the next step toward advancing central elements of President Joe Biden’s economic agenda.

Democrats view the wide array of proposed spending as historic, and they hope to rely on their narrow but potent majorities in Congress to grow government to a level not seen in decades. The measure also proposes universal pre-kindergarten, reform of federal immigration laws and fresh efforts to lower prescription drug prices, marking fresh attempts on Capitol Hill to adopt long-stalled priorities and campaign promises from the 2020 presidential election.

In releasing the document, Democratic leaders pledged their package would be financed in full, chiefly through tax increases targeting corporations and wealthy families - all the while leaving untouched Americans making less than $400,000 annually in keeping with Biden's pledge. Like much of the budget, however, it ultimately leaves the work to draft those provisions to other lawmakers and committees. They are set to start translating the numbers into policy come September, making the announcement Monday the start of a long, fraught process in the House and the Senate still to come.

Once the package is complete, Democrats plan to shepherd the new spending through Congress using a process known as reconciliation. The maneuver allows them to sidestep what is likely to be unanimous Republican opposition and adopt the legislation in the Senate with a simply majority, rather than the usual 60 votes typically needed. The first step comes this week, when the Senate is expected to approve the overall funding level before departing for the August recess.

"At its core, this legislation is about restoring the middle class in the 21st Century and giving more Americans the opportunity to get there," Senate Majority Leader Charles E. Schumer, D-N.Y., said Monday in a letter to the caucus.

"By making education, health care, child care, and housing more affordable, we can give tens of millions of families a leg up. By making further investments in infrastructure, we can create tens of thousands of good-paying jobs. And by finally tackling climate change, we can spare our country and our planet the most devastating effects of global warming," he said.

The new budget outline complements the roughly $1.2 trillion infrastructure proposal that the chamber is on track to pass by Tuesday morning. That public-works package is bipartisan, but it omits many of Democrats' top priorities, prompting lawmakers to seek the trillions of dollars in additional spending through reconciliation. Some House Democrats say they simply will not vote to approve the public-works package unless they can also vote on a much larger budget deal.

The Senate's outline - chiefly drafted by Sen. Bernie Sanders, I-Vt., the chairman of the Budget Committee - essentially opens the door for Democrats to seek many of the proposals Biden put forward this past spring as part of his families and jobs plans. Republicans had derided many of these initiatives as social spending, which they argued at the time did not belong in an emerging deal over new investments in the country's roads, bridges and pipes.

"For too many decades, Congress has ignored the needs of the working class, the elderly, the children, the sick and the poor," Sanders said Monday in a statement. "Now is the time for bold action. Now is the time to restore faith in ordinary Americans that their government can work for them, and not just wealthy campaign contributors."

The blueprint paves the way for significant new spending on child care and education, as Democrats look to fulfill a promise to make community college free for two years. The budget resolution also opens the door for lawmakers to extend a recent set of expanded federal tax credits that help low-income families with children.

Another bucket of spending aims to target climate, addressing Democrats' concerns that the bipartisan infrastructure deal does not go far enough to address their concerns about a warming planet. On the same day that the United Nations released a new report warning about the grim consequences of sustained carbon emissions, Democrats proposed new investments to crack down on pollution and authorize new clean energy tax policies.

The budget further allows Democrats to pursue significant changes to Medicare, including an expansion to cover dental, vision and health benefits. And Democrats have opted to try to seek lawful permanent residency status for perhaps millions of immigrants as part of the reconciliation process, embarking on a political journey that could find them tangling with the Senate parliamentarian over when the idea is allowable under procedural rules that narrowly restrict them to proposals that affect spending.

And the budget deal puts the onus on the Senate's top tax-writing panel, the Finance Committee led by Sen. Ron Wyden, D-Ore., to cover the costs of the massive package while also reducing the deficit by at least $1 billion. The task sets the stage for thorny fights even within the Democratic Party over the size of the potential tax increases on families, investors and businesses.

"More broadly, the American people are with us on these issues," Wyden said in a statement. "They pay their taxes with every paycheck while the world's wealthiest individuals and most profitable corporations pay little to nothing or cheat by not paying taxes they do owe."

But Democrats opted against including one significant element: an increase in the debt ceiling, the statutory limit the government can borrow to pay its bills. Congress missed a key deadline to raise or suspend the ceiling at the end of July, meaning lawmakers have only a few weeks to avert a potential fiscal crisis that puts the country at risk of default. Democrats instead seek to address the issue outside the context of the budget, an approach backed by the Treasury Department, but the move threatens to put them on a collision course with Republicans threatening to withhold their votes over spending concerns.

The budget resolution arrived Monday as lawmakers lumbered toward a final vote on an infrastructure deal that rounds out a total $4 trillion in economic initiatives sought by the White House.

The Senate started its infrastructure debate in earnest last week, as Democrats and Republicans joined together to advance a public-works package assembled by a bipartisan group of 10 led by Sens. Kyrsten Sinema, D-Ariz., and Rob Portman, R-Ohio. Their support has withstood days of debate and multiple votes, overcoming the potential for a filibuster, in a reflection of Portman's belief that such long-promised upgrades are "overdue."

"People do expect here in America, [with] this great economy we have, we should also be able to lead the world in infrastructure, but we don't," he said in a floor speech Sunday.

The strong bipartisan support initially appeared to open the door for the Senate to adopt the infrastructure bill swiftly, then immediately pivot to the budget debate. But lawmakers were soon stymied as a result of the objections raised by Sen. Bill Hagerty, R-Tenn., who has seized on the proposal's cost. Throughout the weekend, Hagerty pointed to the official analysis from the Congressional Budget Office, which shows that the infrastructure plan could add $250 billion to the deficit, even as its sponsors contend that its costs would be fully funded.

Hagerty's opposition prevented the Senate from adopting the bill over the weekend, requiring the Senate to run its long procedural clock and setting up a vote early Tuesday. But his stance has affected more than just the hour of their work: It has contributed to a standoff between Democrats and Republicans about amendments to the bill as well.

Much like the discussion to speed up voting, which requires the chamber's full backing to occur, so, too, must lawmakers agree in full just to consider potential tweaks to the infrastructure measure at this stage. With no agreement on time, Democrats signaled over the weekend that they would play political hardball on amendments, resulting in a spiraling fight that prevented both parties from trying to make changes.

"I'd repeat that Democrats are ready and willing to vote on additional amendments to the bill before moving to final passage," Schumer said Sunday as the chamber gaveled into session. "Once again, that will require the cooperation of our Republican colleagues."

He continued: "I said yesterday that we could do this the easy way or the hard way. Yesterday, it appeared that some Republicans would like the Senate to do this the hard way. In any case, we'll keep proceeding until we get this bill done."

The standoff has prevented lawmakers from resolving lingering disputes about the proposal, including a fight among members of both parties over its provisions targeting cryptocurrency. The measure seeks to require investors and brokers to disclose more information to the government for tax purposes, but critics say the section has been written so broadly as to be unworkable and damaging to the nascent industry.

Talks have proceeded for days between two camps of lawmakers - one led by Sens. Ron Wyden, D-Ore., Cynthia M. Lummis, R-Wyo., and Patrick J. Toomey, R-Pa., and another with Sen. Mark R. Warner, D-Va., with the backing of Portman. Even as they neared a potential compromise, reconciling their differences, they still did not appear to have an avenue to offer it on the Senate floor - leaving the issue unresolved even as the bill neared final passage.

"We were on track to do it at one point, and we're still pushing," Portman told lawmakers Sunday. He said he did not think lawmakers would lose votes if this amendment or others were not offered, adding that he is optimistic that a deal is still possible.

Speaking to voters Sunday, Sen. John Thune, R-S.D., said both sides have an even wider array of tweaks they would still like to make. But he acknowledged that the odds are diminishing.

“There’s still a chance to get a smaller list of amendments voted on tomorrow, but as you get closer to the witching hour, there’s less incentive” for a deal, he said.