The House gave final approval Friday to a budget blueprint that will allow a dozen committees to start writing a massive coronavirus relief package next week. The tally was 219-209, following early morning Senate adoption on a 51-50 vote after Vice President Kamala Harris broke a tie.
The fiscal 2021 budget resolution carves out room for up to $1.9 trillion in deficit spending to respond to the COVID-19 pandemic, in line with President Joe Biden’s request. Adoption of the budget plan gives Democrats the ability to use the reconciliation process, under which legislation can pass the Senate with a simple majority rather than the usual 60-vote threshold to end debate.
The House vote on adoption came as part of the rule for floor debate, which automatically “deemed” the budget approved without a separate vote. The chamber had previously adopted a very similar version, but had to vote again because the Senate added amendments during its “vote-a-rama” process plus some other conforming changes the House needed to also adopt.
The lone “no” vote on the Democratic side Friday was Jared Golden of Maine, a member of the moderate Blue Dog Coalition. No Republicans supported the budget plan.
The House vote Friday was the last preliminary step before multiple authorizing committees in the House take up their portions of the aid package next week.
Democrats in both chambers want to get a bill to Biden’s desk before an unemployment benefit boost lapses March 14. Democrats have also said they want to add airline industry aid before a payroll-support program expires at the end of March.
“On Monday, we will begin working on the specifics on the bills,” Speaker Nancy Pelosi told reporters after a meeting with Biden and Harris on Friday. “Hopefully, in a two-week period of time, we’ll send something over to the Senate and this will be done long before the due date of the expiration of so many initiatives.”
Minimum wage, state and local aid
The wide-ranging Biden proposal includes raising the federal minimum wage to $15 an hour over five years, bumping up enhanced federal unemployment insurance benefits to $400 a week and providing $350 billion in aid to state and local governments.
Ways and Means, with the largest piece of the package at $941 billion, is setting aside next Wednesday through Friday for what is sure to be a contentious markup, though it is possible the committee will not need all three days. Ranking member Kevin Brady, R-Texas, said lawmakers on his side will offer only “substantive” amendments and not intentionally try to drag out the markup beyond Thursday.
The tax-writing panel led by Chairman Richard E. Neal, D-Mass., has jurisdiction over the largest single component in Biden’s plan: $1,400 tax rebates to individuals earning up to $75,000 and married couples making up to $150,000.
That $464 billion cost, plus the prospect of well-to-do households earning almost $300,000 receiving checks — because of generous phaseouts and eligibility for dependents — has Biden and top Democrats talking about narrowing the scope.
Biden and Harris met with Neal and other committee leaders as well as members of the House Democratic leadership on Friday morning. House Majority Whip James E. Clyburn, D-S.C., said he was “getting a little pushback” on the broad sweep of the rebates, and Neal said Biden mentioned discussions with Pelosi about putting a “ceiling” on the benefit.
But getting the budget blueprint done removes a major impediment to Democrats’ agenda.
And so far, they are confident they can resolve intraparty differences over the details and pass the ambitious relief package quickly with a goal of delivering it to Biden for his signature by early March. In a letter to the rank and file on Friday, Pelosi wrote that it was her goal to keep the House on schedule to pass a bill by the end of this month.
Other committees with major pieces of the legislation include Education and Labor, with an instruction to spend no more than $357.9 billion. That panel will share jurisdiction with Ways and Means on funding to shore up cash-strapped union pension plans, and will also oversee minimum wage and school funding parts of the measure. Oversight and Reform, with jurisdiction over state and local aid, got a $350.7 billion allotment.
But now that Democrats are well on their way, concerns are beginning to mount that the level of spending in the package could be dangerous for the economy by triggering inflation.
In a widely circulated Washington Post opinion piece, former Clinton administration Treasury Secretary Larry Summers cautioned that “macroeconomic stimulus on a scale closer to World War II levels than normal recession levels will set off inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability.”
While Summers said the level of stimulus could be “manageable,” he likened the proposed measures to “steps into the unknown.”
In defense of the $1.9 trillion price tag of the proposed package, some Democrats have pointed to the roughly $800 billion stimulus bill passed during the Barack Obama administration and said it was too small, resulting in a slower recovery from the 2009 financial crisis.
But Summers said in his column that while the Obama-era legislation provided about $30 billion to $40 billion of stimulus a month, equal to about half of the fall in economic activity at that time, the Biden plan would provide about $150 billion in stimulus a month, “at least three times the size of the output shortfall.”
Beyond the potential impact on inflation, Summers expressed concern that enacting the package could make it harder to pass longer-term changes including “public investment in everything from infrastructure to preschool education to renewable energy.”
Republicans seized on Summers’ article.
“I clearly do not always agree with everything that former Secretary Summers says, but I think there are some interesting points in the article that he put on the Post,” Michael C. Burgess, R-Texas, said when the Rules Committee approved the rule for budget resolution consideration.
Biden seemed to be aware of concerns about overheating the economy ahead of his meeting with Democrats on Friday. In remarks before reporters, he told the lawmakers that “it’s not just the macroeconomic impact on the economy and our ability to compete internationally; it’s people’s lives,” he said.
“Real, live people are hurting, and we can fix it,” Biden said. “And the irony of all ironies is, when we help them, we are also helping our competitive capacity through the remainder of this decade.”
Republicans have repeatedly faulted Democrats for bringing the House and Senate budget resolutions to the floor without any consideration in the Budget committees.
“I remain concerned about where this process is going,” Tom Cole, ranking Republican on the Rules Committee, said as the committee approved a rule for the budget on a partisan 8-4 vote. “The majority could use these instructions for almost any item.”
Democrats countered they are willing to work with Republicans on a bill that would move through regular order. But the two parties are far apart, with Republicans favoring a more limited, targeted package.
“Nothing we’re doing today prevents there from being a bipartisan bill,” Rules Chairman Jim McGovern, D-Mass., said. “Nothing’s going to be slipped into this bill without everybody knowing about it,” he said of the reconciliation legislation.
Burgess, who led the GOP side of the debate on the House floor, said there is still $1 trillion unspent from previous aid packages and “now is not the time to push through partisan priorities.”
Joseph D. Morelle, D-N.Y., who managed the rule for his side, said the two parties could still reach agreement. But he defended the rapid move on the budget resolution, saying, “Whether we are going to have a bipartisan agreement or not, we are going to move forward.”
David Lerman, Niels Lesniewski, Jennifer Shutt and Doug Sword contributed to this report.