The Democrats’ $3.5 trillion budget reconciliation package, encompassing the bulk of President Joe Biden’s social welfare spending proposals, will likely come to his desk with a significantly reduced price tag, senior Democratic officials say.
Right now, spending concerns raised by centrist Democratic Sens. Joe Manchin of West Virginia and Kyrsten Sinema have prevented leadership from rapidly sending the measure back to Biden, which under Senate reconciliation rules requires “yea” votes from all 50 members of the caucus, plus Vice President Kamala Harris’s tiebreaking vote.
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Manchin has repeatedly called for the proposal to cost roughly the same as the $1.2 trillion bipartisan, physical infrastructure package, which House Speaker Nancy Pelosi will not bring to the floor to a vote until the reconciliation package is also ready for a vote. Multiple senior Democratic officials interviewed by the Washington Examiner on Friday predicted leadership would eventually acquiesce to the fiscal demands of the “mod squad.”
All the officials, granted anonymity to speak freely without influencing the negotiations on the package, said that Pelosi, Senate Majority Leader Chuck Schumer, Biden, and other Democratic leaders recognize that failing to pass the president’s proposals would likely result in the party losing majorities in both chambers of Congress in the midterm elections and that leadership would prioritize reaching a compromise over maintaining that $3.5 trillion figure.
“We’ve got a unique opportunity to tout real, tangible things for voters next year and whack Republicans over the head for opposing really popular programs,” one official said. “I think everyone recognizes that. Maybe the number comes down a bit, but at the end of the day, progressives, the White House, and moderates all know we’ve got to head into ’22 with some tangibles for voters, on top of getting us out of the pandemic.”
Two other officials noted that, unlike Democrats in solidly blue states, Manchin and Sinema’s future election prospects would likely not be affected by the infrastructure bills’ passage. Given Arizona’s decidedly purple status, Sinema’s attempts to tamp down on Democratic spending could actually boost her 2022 bid, and Manchin, who previously claimed his 2018 campaign would be his last, would not even be up for reelection until 2024. West Virginia twice voted for former President Donald Trump by 40 percentage points.
Yet, another official argued that reducing the total cost of the plan would help counter Republican campaign claims that the Democrats’ initiatives and “unchecked spending” would lead to rampant inflation.
“We’ve released ways to pay for nearly everything we want to include in the bill,” that person said of the tax increases on corporations and high-income residents put forward as reconciliation pay-fors by the House Committee on Ways and Means. “Decreasing the total cost only makes full revenue recovery even more manageable.”
As written, the package includes spending tranches for nearly every issue Biden campaigned on, including paid family leave, federally funded healthcare expansion, climate and other scientific investments, and even immigration reform. Democratic officials conceded that the hardest part of setting the final cost of the package wouldn’t necessarily center on deciding what to cut, but determining “what absolutely must be included” to receive the blessing of the progressive wing of the caucus.
“It’s not going to be easy getting … [Vermont Sen.] Bernie Sanders and [New York Rep. Alexandria] Ocasio-Cortez … to sign off on anything below that $3.5 trillion mark, especially when they were originally calling for $6 trillion,” one official said. “In order to do that, we’ve got to include the drug pricing provisions and a pathway to citizenship. If the parliamentarian rules against the immigration aspects, this whole deal could fall apart quickly.”
The White House specifically lobbied on Friday that providing a pathway to citizenship for millions of “Dreamers” and Temporary Protected Status recipients would boost the nation’s economy and drive wages up for all workers.
“Immigrants have made innumerable contributions to American business and society. However, current law confines millions of them to a life in the shadows, without the rights to be fully economically engaged or have access to foundational social protections,” White House Council of Economic Advisers Director Chairwoman Cecilia Rouse wrote in a blog post published Friday. “Such treatment inflicts harms on unauthorized immigrants themselves and their families — many of which include U.S. citizens and non-citizen legal residents — as well as to the broader economy.”
“Though some argue that increased take-up of social programs would generate a substantial fiscal cost to the government, the productivity of the newly-legalized would likely increase, which would benefit all in the United States by expanding economic output,” she continued. “Further, the ensuing increase in wages and compliance with tax requirements would increase their contributions to public sector finances, and their children would benefit as well. Allowing currently unauthorized workers to engage fully in the labor force would not only benefit the immigrants and their families, but society as a whole.”
And while the White House would prefer to leave the negotiations on the specifics of the reconciliation package to lawmakers, Biden himself has recently repeatedly presented the vote on the package as an “inflection point” for the Hill to decide if they will continue the economic status quo of the past 40 years or extend a helping hand to the middle class.
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“Each inflection point in this nation’s history represents a fundamental choice. I believe that America at this moment is facing such a choice, and the choice is this: Are we going to continue with an economy where the overwhelming share of the benefits go to big corporations and the very wealthy, or are we going to take this moment right now to set this country on a new path? One that invests in this nation, creates real sustained economic growth, and that benefits everyone, including working people and middle-class folks?” he said in a televised speech from the White House on Thursday. “That’s something we haven’t realized in this country for decades.”
