Senate Democrats released their sweeping $3.5 trillion budget resolution on Monday, August 9 – the latest step in their drive to expand education, health care and child care support, tackle the climate crisis and make further investments in infrastructure.
Democratic leaders are hoping to use the budget resolution 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 bipartisan infrastructure package currently working its way through the chamber, the budget resolution would go through reconciliation, which under Senate rules means it can be passed with 50 Democratic votes alone. GOP lawmakers have already lashed out at the size of the budget blueprint and multiple provisions the Democrats are considering.
The 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 have a target date of September 15 to submit their detailed legislation, according to Senate Majority Leader Chuck Schumer.
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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 shot down in the bipartisan infrastructure bill.
However, a memorandum to Democratic senators sent Monday 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:
Broader supports for families
The resolution calls for multiple measures that were contained in the $1.8 trillion American Families Plan proposal Biden unveiled in April.
The budget framework seeks to establish a universal Pre-K program for 3- and 4-year-olds and a new child care 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% of the cost when the measure is fully up and running.
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The framework also calls for enhancing child care for working families. Under Biden’s proposal, low- and middle-income households would pay no more than 7% of their income on child care 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 child care workforce to bring their wages up to $15 an hour, from the typical $12.24 hourly rate they earned in 2020.
The blueprint proposes making community college tuition-free for two years. Under Biden’s plan, the federal government would cover about 75% of the average tuition cost in each state when the program is fully implemented, with states picking up the rest. States would also be expected to maintain their current contributions to their higher education systems.
The resolution calls for increasing the Pell Grant award and making investments in historically Black colleges and universities, as well as other institutions that cater to students of color. The President’s plan would provide up to approximately $1,400 in additional assistance to low-income students by increasing the Pell Grant award.
The blueprint asks to create 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.
Families this year can receive a child tax credit totaling $3,600 for each child under 6 and $3,000 for each one under age 18. The tax credit, half of which is being paid out in advance monthly installments through December, is fully refundable so that more low-income parents can take advantage of it. Families can claim the other half at tax time next year.
Expanded federal health care programs and assistance
The blueprint recommends adding dental, vision and hearing benefits to Medicare, as well as lowering the eligibility age – both longstanding goals of Budget Committee Chairman Bernie Sanders, an independent from Vermont who caucuses with the Democrats.
Nearly half of Medicare beneficiaries, or 24 million people, did not have dental coverage, as of 2019, according to a recent Kaiser Family Foundation report.
The resolution also calls for extending the enhanced Affordable Care Act subsidies contained in the Democrats’ American Rescue Plan, which passed in the spring.
The subsidies reduce the amount Obamacare enrollees have to pay to no more than 8.5% of their income and make assistance available to more Americans. Also, lower-income policyholders can receive subsidies that eliminate their premiums completely. But the boost in aid is only available this year and next.
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In addition, the budget blueprint proposes 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.
And the resolution calls for 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.
The instruction also calls for 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.
In addition, it calls for promoting health equity, particularly investing in maternal, behavioral and racial justice health measures. Health equity has been one of the priorities of the Biden administration.
Combats climate change
The resolution seeks to make investments aiming to meet Biden’s goals of reducing economy-wide carbon emissions by 50% and for the US power grid to get 80% of its power from emissions-free sources before 2030.
It calls for implementing new polluter fees, creating new consumer rebates for home electrification and weatherization, providing clean energy, manufacturing, and transportation tax incentives and grants and electrifying the federal vehicle fleet and buildings.
It would also invest in agriculture conservation, drought and forestry programs to help reduce carbon emissions and prevent wildfires.
Invests more in infrastructure and jobs
The Democrats want to make even more investments in infrastructure projects that would not be funded by the bipartisan infrastructure package.
Biden wanted some of these investments in the infrastructure bill – like improving aging Veterans Administration hospitals, boosting American manufacturing, job training and workforce development programs – but he also wanted bipartisan support and the provisions were cut out during months of negotiations.
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The budget resolution would invest 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.
It also calls for providing green cards to millions of immigrant workers and families.
This story has been updated to reflect the current state of negotiations.