Senate Democrats Outline $3.5 Trillion ‘Social Welfare’ Tax Hike and Amnesty Spending Plan

Senate Democrats Outline $3.5 Trillion ‘Social Welfare’ Tax Hike and Amnesty Spending Plan

Mona Salama
Mona Salama
August 9, 2021

Senate Democrats released the full text of the $3.5 trillion budget resolution Monday, in their first significant step to boost social spending by overhauling the nation’s climate, child care, health care laws, as well as immigration reform through the process of reconciliation without garnishing any Republican votes.

The 92-page resolution text does not include instructions to raise the debt ceiling, paving the way for a massive showdown when they return this fall over the nation’s borrowing limit. Treasury Secretary Janet Yellen issued a statement prior to the text release calling on Democrats to seek bipartisan support for lifting the debt limit — or simply suspending it, as has been done frequently in recent years but may not be possible in a reconciliation bill.

The budget resolution provides instructions for the 12 Senate committees to have a hand in crafting out the $3.5 trillion spending plan. It directs multiple House and Senate panels to write legislation to increase the deficit by up to nearly $1.75 trillion while instructing the Senate Finance committee and the House Ways and Means committee solely to find ways to reduce the deficit by at least $1 billion. The instructions also give both committees substantial flexibility to reduce the deficit — raising taxes, creating or extending tax breaks, and initiating new spending programs by cutting spending through other programs.

The massive spending blueprint includes a slew of major progressive social welfare priorities, including funding for universal pre-K for all 3 and 4-year-olds, tuition-free community college, child care for low-income families, and a paid leave program. The resolution price tag, the largest budget target of $726 billion to instruct the Senate Health, Education, Labor, and Pensions Committee in drafting the budget breakdown and other provisions.

It also calls for major tax hikes on the wealthiest Americans and corporations as Democrats’ primary source of funding its resolution spending. Democrats pledged to fulfill President Biden’s campaign promise by prohibit the proposed new taxes hikes on those making less than $400,000 annually and includes plans to extend child tax credit that provides monthly $300 per child checks to families. Details of the tax increases will be worked out by Senate Finance Committee, focusing on crafting a measure previously stripped out of the bipartisan infrastructure bill by increasing funding to the IRS to help boost tax enforcement.

Along with tax hikes, education, and health care expansion, Democrats have laid out plans to provide illegal immigrants a pathway to citizenship in their spending resolution plans. The instruction outlines $107 billion to be allocated to the Senate Judiciary Committee to use the funding on “lawful permanent status for qualified immigrants.” Democrats also recommended funding for “green cards to millions of immigrant workers and families.” The budget framework would also allow Democrats to invest in infrastructure and job programs, adding Medicare benefits, extending enhanced ACA subsidies, and lowering prescription drug costs. 

At the resolution’s core, Democrats imposed spending on several climate and energy, and environmental priorities, including a proposed $67 billion for the Senate Environment and Public Works Committee, $198 billion for the Senate Energy and Natural Resources Committee, and a carbon polluter import fee under the Finance Committee.

Sen. Bernie Sanders (I-VT), the ranking member of the Senate Budget Chairman, said once the simple majority adopts the resolution, the budget plan blueprint will “allow the Senate to move forward on a reconciliation bill that will be the most consequential piece of legislation for working people, the elderly, the children, the sick and the poor since [Franklin Delano Roosevelt] and the New Deal of the 1930s.”

“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,” Sanders added in the statement revealing the resolution text.

The budget blueprint is expected to be voted on as soon as Tuesday following the Senate’s final passage of the $1 Trillion bipartisan infrastructure bill. A vote on final adoption would come 50 hours after adopting the motion to proceed, requiring a simple majority of 50 Senators to pass. Following the 50 hours of debate, a “Vote-a-Rama” on amendments would ensue.

Senate Majority Leader Chuck Schumer (D-NY) said in a letter sent to his caucus early Monday that the budget resolution blueprint is the starting point for Democrats to “shape and influence the final reconciliation bill after the adoption of the Budget Resolution.” Schumer set a target date for committees to submit their reconciliation legislation by Sept. 15.

“By making education, health care, child care, and housing more affordable, we can give tens of millions of families a leg up,” Schumer wrote. “This legislation will provide the largest tax cut for American families in a generation while making the wealthy pay their fair share.”

Republicans have already signaled that they will unanimously oppose the “irresponsible spending.”

Senate Moderate Democrats are already balking at the $3.5 trillion price tag, while some are sounding the alarm over adding to the federal debt. Senate Democrats can’t afford to have any member deflect in their shot to pass.

Meanwhile, House Democrats can only afford to lose 3 members in its slim majority, but a group of a bipartisan group of centrist lawmakers urged Speaker Nancy Pelosi (D-CA) to bring their smaller plan forward quickly, raising concerns regarding the massive spending bill in a sign of the complicated few months ahead.

“This once-in-a-century investment deserves its own consideration,” Reps. Josh Gottheimer (D-NJ), Jared Golden (D-MN), and others in a letter wrote. “We cannot afford unnecessary delays.”

Mona Salama

Mona Salama

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