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Senate Democrats discussing roughly $6 trillion budget plan

Lawmakers want preliminary deal before July Fourth recess

Senate Majority Leader Charles E. Schumer, D-N.Y., flanked by Sen. Patty Murray, D-Wash., and Sen. Richard J. Durbin, D-Ill., calls on a reporter Tuesday during the first news conference in the Ohio Clock Corridor since March 2020.
Senate Majority Leader Charles E. Schumer, D-N.Y., flanked by Sen. Patty Murray, D-Wash., and Sen. Richard J. Durbin, D-Ill., calls on a reporter Tuesday during the first news conference in the Ohio Clock Corridor since March 2020. (Bill Clark/CQ Roll Call)

A massive filibuster-proof budget reconciliation package worth as much as $6 trillion over a decade — of which half could be deficit-financed — is taking shape within the Senate Democratic caucus, according to a source familiar with the discussions.

Nearly half of the tentative outline, first reported by Politico, would run through the Finance Committee, which has jurisdiction over the tax code and federal health care entitlements, among other things.

Senate Democrats are aiming for a preliminary deal on the budget plan’s outlines before the July Fourth recess, while bipartisan talks on a smaller, infrastructure-only plan continue on a separate track. 

Senate Majority Leader Charles E. Schumer, D-N.Y., met with Budget Committee Democrats on Wednesday and said he’ll meet with Democratic members of the bipartisan infrastructure negotiating team on Thursday.

The $6 trillion total Senate Democrats are floating overshoots President Joe Biden’s infrastructure and other plans by about $2 trillion.

Top Democrats like Budget Chairman Bernie Sanders, I-Vt., have said they plan to use the budget measure to add items not specifically included in Biden’s budget, such as lowering the Medicare eligibility age to 60 and expanding the program’s benefits to dental, vision and hearing coverage.

After the Supreme Court upheld the 2010 health care law on Friday, Senate Health, Education, Labor and Pensions Chair Patty Murray said she was working with House Energy and Commerce Chairman Frank Pallone Jr., D-N.J., on a follow-on health care package to include a public insurance option for the law’s exchanges. Murray, D-Wash., added she’s ready to work with Biden and colleagues on lowering prescription drug costs and expanding Medicare.

Others have suggested proposals like making an expanded child tax credit permanent, and adding an immigration overhaul that could open up a pathway to citizenship for undocumented individuals.

According to another person familiar with the talks, Senate Budget Committee Democrats are aiming to reach a preliminary agreement by June 28 on contours of the fiscal 2022 budget blueprint that will enable the use of reconciliation.

The budget resolution would then likely go straight to the Senate floor at some point after lawmakers return from the July Fourth recess the week of July 12, skipping a markup in the evenly split Budget panel.

House Budget Chairman John Yarmuth, D-Ky., is expected to bring his chamber’s budget blueprint, which could look similar, before his panel in mid-July. There may be some differences the two chambers would need to work out before final adoption of a joint budget blueprint, which Democrats are aiming for before the August recess with an eye toward passing the massive reconciliation measure in the fall.

Bipartisan plan emerging

Meanwhile the bipartisan Senate group, led by Arizona Democrat Kyrsten Sinema and Ohio Republican Rob Portman, released a draft outline of their tentative agreement on infrastructure. The plan included $579 billion in new spending over five years, including $110 billion for roads, bridges and major projects; $66 billion for passenger and freight rail; $48.5 billion for transit and $25 billion for airports. 

The bipartisan plan was still subject to change, emphasized another person who was familiar with the discussions.

While Republicans have stressed that infrastructure should largely be transportation-related, the draft bipartisan negotiations also envision $73 billion for the power grid; $65 billion for broadband; $55 billion for water infrastructure and $47.2 billion to rebuild infrastructure to withstand the impact of severe weather events and other risks related to climate change. 

The group listed 11 potential “pay-fors,” though some would be better characterized as financing mechanisms. That list includes an infrastructure financing authority to leverage private investment; direct-pay municipal bonds for infrastructure investment; public-private partnerships and an annual surcharge on electric vehicles. 

Like Sen. Shelley Moore Capito, R-W.Va., and the five Republicans who earlier unsuccessfully sought a deal with Biden, the group also suggested repurposing unused COVID-19 relief funds for infrastructure.

Biden, who is overseas, said as late as Wednesday he had not seen the details of the deal, but he has rejected many of the suggested offsets. 

For example, he opposes indexing the federal gas tax to inflation — which the bipartisan group listed as a “placeholder” in their draft — and has rejected the idea of repurposing unused pandemic aid funds. Instead, he has insisted on offsets that would raise taxes on the wealthiest Americans and corporations, as well as enhanced IRS tax enforcement initiatives that would target wealthy households, private firms and cryptocurrency assets.

The new, tentative Democratic strategy and more detailed description of the $579 billion bipartisan plan comes as lawmakers are struggling to find common ground on Biden’s $2 trillion-plus infrastructure plan, as well as a second plan that would bring the total cost of his proposals to more than $4 trillion. The second plan includes initiatives such as universal preschool, two years of free community college and a new paid family and medical leave benefit. 

Republicans have balked at both the cost and Biden’s broad definition of infrastructure, which includes roads, bridges, and water projects but also items that haven’t typically been referred to that way in the past, such as $400 billion for home- and community-based care for the elderly.

Biden’s infrastructure plan is more financially ambitious than the framework released by the bipartisan group, calling for $80 billion for Amtrak, $85 billion for transit and $111 billion for water infrastructure. Biden also proposes more than $300 billion in clean energy tax incentives, which aren’t included in the bipartisan plan.

Senate Finance Chair Ron Wyden, D-Ore., has already marked up a roughly $250 billion clean energy package that he’s said is a prime candidate for inclusion in the reconciliation bill. 

Even as the infrastructure negotiations are underway, both chambers are moving forward with surface transportation bills that advance many of the infrastructure provisions Biden is backing.

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