Democrats land on $3.5 trillion budget agreement

Senate Democrats said they have reached a $3.5 trillion budget agreement. This is the first step in unlocking a process that Democrats plan to use to pass many of President Joe Biden’s American Families Plan priorities with a simple majority of votes.

Majority Leader Chuck Schumer said this budget package, coupled with the bipartisan infrastructure bill currently being negotiated amongst members, comes “very, very close” to what Biden asked for when he laid out his families plan.

“Every major program that President Biden asked us for is funded in a robust way,” Schumer said. “In addition we are making some additions to that.”

On the heels of this announcement, Schumer said the president will join Senate Democrats for their caucus lunch Wednesday to discuss the plan with lawmakers.

Schumer announced the package alongside members of the Budget Committee, though it’s still not certain that all Democrats will support the measure. Unanimous support will be necessary to pass the bill.

The package will be, according to Sen. Mark Warner, D-Va., fully paid for. He did not give details on how the reconciliation bill will be funded, but Democrats have favored a hike in corporate tax rates, not unlike the one Biden originally proposed.

“There are times for really big things, this is one of those times,” Warner said. “The plan we’ve put together, which is fully paid for, will make the investments in American families, will take on the existential threat of climate change in a way that will meet the needs, leading the world on this critical issue.”

The $3.5 trillion topline still falls short of the $6 trillion that Budget Chairman Bernie Sanders had been hoping for, but Schumer announced Tuesday night that the reconciliation instructions include a “robust expansion” of Medicare, something that has been a longstanding priority for Sanders.

“This is in our a view a pivotal moment in American history,” Sanders said. “For a very long time the American people have seen the very rich getting richer and government developing policies which allow them to pay in some cases not a nickel. What this legislation says among many many other things is that those days are gone. The wealthy and large corporations are going to start paying their fair share of taxes so we can protect the working families of this country.”

Senate Democrats have long said they intend to use a process called reconciliation, which allows them to sidestep the usual 60-vote threshold and pass legislation with a simple majority, to pass parts of Biden’s infrastructure agenda that are not addressed in the separate bipartisan infrastructure deal.

The bipartisan infrastructure plan is also at a critical juncture as that group of senators works to publish the text of their $1.2 trillion legislation — something negotiators do not expect will happen this week. But once that bill is made public, there’s a serious potential obstacle — whether the proposed revenue will actually cover the $600 billion in new spending.

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