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What's In the Democrats' $3.5 Trillion Spending Plan

  • Government Affairs

Democrats in Congress are moving ahead with a $3.5 trillion, 10-year spending plan that marks the latest step in their plan to expand education, health care, and childcare support, tackle climate change and make further investments in infrastructure.


Party leaders are hoping to use the annual budget process to push through the massive broadening of the nation's social safety net envisioned in President Joe Biden's jobs and families’ proposals that have been blocked by Republican opposition.


Unlike the Democrats' infrastructure package, which was passed by 69 votes in the Senate and is currently awaiting a vote in the House, the budget plan is unlikely to gain bipartisan backing -- but it can go through reconciliation, which under Senate rules means it can be passed with 50 Democratic votes alone. GOP lawmakers have already disapproved the size of the budget blueprint and multiple provisions the Democrats are considering.


The initial Senate resolution provides recommendations from the Senate Budget Committee to other committees. The bill itself has yet to be written, and the elements of it will likely be modified as it works its way through each committee.


Lawmakers had a target date of September 15 to submit their detailed legislation, according to Senate Majority Leader Chuck Schumer. The House has 13 committees of jurisdiction that have been working behind the scenes to get their portions of the reconciliation package done and ready for a floor vote later this month.


The Senate Budget Committee, which released a framework agreement over the summer, says that the investments will be fully offset by a combination of new tax revenues, health care savings, and long-term economic growth, though the summary doesn't provide details. The instructions also list corporate and international tax reform and Internal Revenue Service tax enforcement as options -- both of which Republicans objected to in the bipartisan infrastructure bill.


However, a memorandum to Democratic senators specifies that new taxes on families making less than $400,000 a year, small businesses, and family farms would be prohibited.


Here's what's in the Budget Committee's resolution summary:


  • Establishing a universal Pre-K program for 3- and 4-year-olds and a new childcare benefit for working families. Under the American Families Plan, the federal government would invest $200 billion in universal preschool for all 3- and 4-year-olds through a national partnership with states. The administration estimates it would benefit 5 million children and save the average family $13,000 when fully implemented. It would be accessible to families of all income levels, but states would be required to foot about 50 percent of the cost when the measure is fully up and running.


  • Enhancing childcare for working families. Under Biden's proposal, low- and middle-income households would pay no more than 7 percent of their income on childcare for kids younger than age 5. Parents earning up to 1.5 times the median income in their state would qualify. The President also wants to invest more in the childcare workforce to bring their wages up to $15 an hour, from the typical $12.24 hourly rate they earned in 2020.


  • Creating the first federal paid and medical leave benefit. The American Families Plan calls for giving workers a total of 12 weeks of guaranteed paid parental, family, and personal illness/safe leave by the 10th year of the program. And the budget resolution seeks to extend the expansions of the child tax credit, the earned income tax credit, and child and dependent care tax credit -- all of which were enhanced as part of the Democrats' $1.9 trillion coronavirus rescue plan but are only in effect for 2021.


  • Investing in home and community-based services to help seniors, the disabled, and home care workers. Biden had included a $400 billion investment in these areas in his original infrastructure proposal, but it did not make the final package.


  • Creating a new federal health program for Americans who live in states that have not expanded Medicaid under the Affordable Care Act. A dozen states have yet to do so, and the voter-approved expansion effort is Missouri is currently in court. More than 2 million low-income adults fall into the coverage gap, according to Kaiser.


  • Lowering the price of prescription drugs, saying it will save hundreds of billions of dollars. Democrats have long pushed to reduce drug costs by allowing Medicare to negotiate prices, though some of their peers in the party, as well as GOP lawmakers and the pharmaceutical industry, have opposed it.


  • Investing in affordable housing, Native American infrastructure, and create what Biden is calling a Civilian Climate Corporations to employ thousands of young people to work conserving public lands and waters, bolstering community resilience, and advancing environmental justice.


Thirteen House committees spent countless hours last week marking up legislation to meet the self-imposed Sep. 15 deadline. The bill language passed by the committees will now be drafted into a final bill that is expected to be married with the Senate’s version of the bill in the coming weeks.