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Senate Democrats just laid out their $3.5 trillion plan to hike taxes on the wealthy and begin fighting the climate crisis - without any Republican votes

Aug 10, 2021, 03:57 IST
Business Insider
Senate Majority Leader Chuck Schumer and Budget Committee Chairman Bernie Sanders hold a meeting with Budget Committee Democrats at the Capitol on June 16, 2021. Samuel Corum/Getty Images
  • Senate Democrats unveiled their $3.5 trillion budget blueprint on Monday.
  • Bernie Sanders called it "the most consequential piece of legislation" since the 1930s' New Deal.
  • It includes a child allowance and Medicare expansion, but Democrats have little margin for error.
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Senate Democrats introduced a $3.5 trillion budget blueprint on Monday that would raise taxes on the wealthiest Americans and large corporations to fund the biggest expansion of the social safety net in generations, in an effort to fulfill a key part of President Joe Biden's economic agenda.

The spending plan would expand Medicare so it covers dental, vision, and hearing. It would also set up a program for paid family and medical leave, tuition-free community college, a child allowance, and clean-energy provisions to combat the climate crisis.

It would also create a pathway to citizenship for some immigrants without authorization to live in the US and lower prescription-drug prices. Democrats are attempting to command their narrow majorities and pass the plan without GOP support.

They want to pay for the plan by increasing taxes on the wealthiest Americans and large firms, while avoiding any tax hikes for people earning under $400,000. Senate Democrats aim to approve the spending amount this week, authorizing committees to begin drafting the massive bill.

The blueprint would be among the largest spending packages ever taken up by Congress, reflecting a decade of pent-up Democratic legislative demands they struggled to achieve under the Obama administration. Much of it is drawn from Biden's two-part infrastructure plans he rolled out in the spring.

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"At its core, this legislation is about restoring the middle class in the 21st Century and giving more Americans the opportunity to get there," Senate Majority Leader Chuck Schumer said in a statement.

Sen. Bernie Sanders of Vermont chairs the Senate Budget Committee overseeing the process. On Monday, he told reporters, "This is the most consequential piece of legislation for working families we've seen since FDR and the New Deal. This is a big deal."

It kicks off what could be a fraught legislative stretch for Democrats as they seek to muscle the spending plan through the House and Senate with little margin for error. They want to approve the bill using reconciliation, which allows the passage of certain bills with a simple majority of 51 votes, instead of the 60 typically required in the Senate.

All 50 Senate Democrats must band together to pass the plan with a tiebreaking vote from Vice President Kamala Harris. Sanders and Schumer said they were hoping to clear the bill sometime in September. Republicans are criticizing the plan as a massive expansion of government with job-killing tax hikes.

Democrats and Republicans are focused on approving Biden's $550 billion infrastructure bill this week, which would send it to the House. But the plan's fate is tied to this reconciliation package that Senate Democrats are starting to assemble.

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House Speaker Nancy Pelosi has repeatedly pledged that House Democrats will not take up the bipartisan infrastructure plan until the Senate clears the reconciliation bill.

The reconciliation bill is focused on what Democrats call "human infrastructure," but it omits an extension of pandemic jobless benefits set to expire shortly after Labor Day, which means at least 7.5 million people could lose all their federal aid. Sen. Joe Manchin of West Virginia on Saturday came out strongly against the renewal of the aid.

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