House and Senate committees would be directed to produce legislation providing $3.5 trillion of spending to enact the bulk of President Joe Biden’s economic agenda under S. Con. Res. 14, the Senate’s fiscal 2022 budget resolution.
The resolution would tee up the budget reconciliation process that would allow Democrats to pass Biden’s plan without Republican support, including provisions to address climate change, expand health-care coverage, and increase taxes on business and high-income individuals.
“The $3.5 trillion Budget Resolution that I am introducing today will allow the Senate to move forward on a reconciliation bill that will be the most consequential piece of legislation for working people, the elderly, the children, the sick and the poor since FDR and the New Deal of the 1930s,” said Senate Budget Committee Chair Bernie Sanders (I-Vt.), the sponsor of the resolution, in an Aug. 9 news release.
Committee ranking member Lindsey Graham (R-S.C.) said in a July 14 news release after the framework was first announced that the “$3.5 trillion tax and spend package being proposed by Senator Schumer and other Democrats is using infrastructure as an excuse to raise taxes and expand government.”
The $3.5 trillion topline would be in addition to the Senate’s infrastructure package (H.R. 3684; see BGOV Bill Summary) that its supporters said would increase spending by $550 billion over five years.
Reconciliation Instructions
The resolution would direct 12 Senate committees to report legislation by Sept. 15 that would make the following changes to the deficit:
It would direct 13 House committees to report legislation by the same date with the following deficit effects:
The Senate and House Budget panels would then package the reconciliation legislation and send it to the full chambers without substantive revision.
The instructions for the Senate Finance and House Ways and Means committees would be a “nominal” $1 billion over ten years to give the panels flexibility to draft various tax and health-care changes, including offsets for the reconciliation package, according to a document from Senate Democrats.
While lawmakers have discussed offsetting the entire $3.5 trillion cost of their upcoming bill with revenue increases, the instructions give the House and Senate tax-writing committees more flexibility by only requiring a partial offset. In total, the instructions would allow the Senate committees to advance measures that would add nearly $1.75 trillion to the debt and the House committees to advance measures that would add nearly $2 trillion. Those numbers reflect differences in committee juris diction.
Though the resolution doesn’t specify what the resulting reconciliation bill would contain, the document highlighted initiatives including:
- Expanding Medicare coverage to include dental, vision, and hearing benefits, and lowering the program’s eligibility age.
- Lowering the price of prescription drugs.
- Extending child tax credits.
- Providing paid family and medical leave.
- Providing universal pre-kindergarten and tuition-free community college.
- Expanding tax incentives for clean energy, manufacturing, and transportation.
- Establishing a Civilian Climate Corps.
- Providing lawful permanent status for qualified immigrants.
- Providing pro-worker incentives and worker support.
- Hiking taxes on corporations and high-income individuals.
- Expanding the state and local tax (SALT) break.
- Imposing tariffs on carbon-intensive imports.
The resolution includes reserve funds that would allow the Senate and House Budget chairs to adjust budgetary levels to accommodate subsequent action on reconciliation legislation, including legislation that doesn’t raise taxes on individuals making less than $400,000. A covered reconciliation bill would also be exempt from certain points of order—requiring 60 votes to waive in the Senate—against legislation with short-term or long-term deficit increases.
It would also allow allocations in the resolution to be adjusted to reflect changes from enacting an infrastructure bill.
Byrd Rule
Bills produced under reconciliation instructions can be passed in the Senate with a simple majority instead of 60 votes, though they’re subject to restrictions.
The Byrd rule, named after former Sen. Robert Byrd (D-W.Va.), limits what can be included in a reconciliation bill. For example, provisions must have actual, or non-incidental, budgetary effects and can’t affect Social Security. Provisions that don’t comply can be removed through points of order that take 60 votes to overcome in the Senate.
For more on the reconciliation process, see the BGOV OnPoint and Cheat Sheet.
Budget Targets
The nonbinding budget blueprint includes spending, revenue, and deficit targets for fiscal 2022 through fiscal 2031.
It would specify outlays of $4.7 trillion in fiscal 2022 and revenue of $3.4 trillion, for a net deficit of $1.3 trillion. It also projects deficits for the rest of the decade, including $1.82 trillion by fiscal 2031.
The budget panels could allocate additional funds to House and Senate appropriators for “program integrity” and other spending, including disability reviews, tax enforcement, programs to curb health-care abuse, reemployment services, wildfire suppression, disaster relief, and veterans’ medical care.
The measure would modify emergency provisions from the fiscal 2018 budget resolution (H. Con. Res. 71) and remove a point of order against emergency designations. It also would restore a point of order against advance discretionary appropriations, with exceptions for certain accounts such as Veterans Affairs Department medical programs.
The measure’s budgetary targets generally would be exempt from adjustments to discretionary spending limits.
Debt Limit
The resolution doesn’t include instructions to increase or suspend the debt limit, which went back into effect Aug. 1 following a two-year suspension (see BGOV OnPoint).
Republicans had called on Democrats to address the debt limit through budget reconciliation and many said they won’t support raising it in a continuing resolution to fund the government past Sept. 30, when the current fiscal year ends.
The Treasury Department is using “extraordinary measures” to juggle cash flow and stay below the renewed debt ceiling, but Treasury Secretary Janet Yellen warned of default risks soon after the August recess. She also called on lawmakers to address the debt limit on a bipartisan basis.
Group Positions
Groups that SUPPORT provisions in the budget resolution include the Center on Budget and Policy Priorities (CBPP), The Nature Conservancy, and OxFam America.
The resolution “takes an important first step toward enacting groundbreaking legislation with long overdue investments to address problems that have plagued the United States for generations,” CBPP President Sharon Parrott said in an Aug. 9 statement.
Groups that OPPOSE the measure include Americans for Tax Reform, the Committee for a Responsible Federal Budget, and the U.S. Chamber of Commerce.
The resolution “would enable a $3.5 trillion reconciliation bill that would dramatically expand the size and scope of government through record levels of inflationary spending, impose massive tax increases, and halt America’s economic recovery,” wrote Jack Howard, the U.S. Chamber of Commerce’s senior vice president of government affairs, in an Aug. 10 key vote alert.
Previous Action & Prospects
Sanders unveiled the resolution with Majority Leader Chuck Schumer (D-N.Y.) on Aug. 9.
The Senate voted 50-49 to proceed to the measure on Aug. 10, after passing its infrastructure package by a vote of 69-30. Debate on a budget resolution is limited to 50 hours in the Senate, and typically includes a vote-a-rama with multiple back-to-back votes on amendments.
House Democrats haven’t unveiled a budget resolution or announced plans to take up the Senate measure. Both chambers must agree to the same text under the same resolution number for the reconciliation process to move forward.
With assistance from Jack Fitzpatrick
To contact the analyst: Michael Smallberg in Washington at msmallberg@bgov.com
To contact the editors responsible: Danielle Parnass at dparnass@bgov.com; Heather Rothman at hrothman@bgov.com
Bill Summary: S. Con. Res. 14, FY22 Budget Resolution
Bloomberg
August 10, 2021 9:33 am
House and Senate committees would be directed to produce legislation providing $3.5 trillion of spending to enact the bulk of President Joe Biden’s economic agenda under S. Con. Res. 14, the Senate’s fiscal 2022 budget resolution.
The resolution would tee up the budget reconciliation process that would allow Democrats to pass Biden’s plan without Republican support, including provisions to address climate change, expand health-care coverage, and increase taxes on business and high-income individuals.
“The $3.5 trillion Budget Resolution that I am introducing today will allow the Senate to move forward on a reconciliation bill that will be the most consequential piece of legislation for working people, the elderly, the children, the sick and the poor since FDR and the New Deal of the 1930s,” said Senate Budget Committee Chair Bernie Sanders (I-Vt.), the sponsor of the resolution, in an Aug. 9 news release.
Committee ranking member Lindsey Graham (R-S.C.) said in a July 14 news release after the framework was first announced that the “$3.5 trillion tax and spend package being proposed by Senator Schumer and other Democrats is using infrastructure as an excuse to raise taxes and expand government.”
The $3.5 trillion topline would be in addition to the Senate’s infrastructure package (H.R. 3684; see BGOV Bill Summary) that its supporters said would increase spending by $550 billion over five years.
Reconciliation Instructions
The resolution would direct 12 Senate committees to report legislation by Sept. 15 that would make the following changes to the deficit:
It would direct 13 House committees to report legislation by the same date with the following deficit effects:
The Senate and House Budget panels would then package the reconciliation legislation and send it to the full chambers without substantive revision.
The instructions for the Senate Finance and House Ways and Means committees would be a “nominal” $1 billion over ten years to give the panels flexibility to draft various tax and health-care changes, including offsets for the reconciliation package, according to a document from Senate Democrats.
While lawmakers have discussed offsetting the entire $3.5 trillion cost of their upcoming bill with revenue increases, the instructions give the House and Senate tax-writing committees more flexibility by only requiring a partial offset. In total, the instructions would allow the Senate committees to advance measures that would add nearly $1.75 trillion to the debt and the House committees to advance measures that would add nearly $2 trillion. Those numbers reflect differences in committee juris diction.
Though the resolution doesn’t specify what the resulting reconciliation bill would contain, the document highlighted initiatives including:
- Expanding Medicare coverage to include dental, vision, and hearing benefits, and lowering the program’s eligibility age.
- Lowering the price of prescription drugs.
- Extending child tax credits.
- Providing paid family and medical leave.
- Providing universal pre-kindergarten and tuition-free community college.
- Expanding tax incentives for clean energy, manufacturing, and transportation.
- Establishing a Civilian Climate Corps.
- Providing lawful permanent status for qualified immigrants.
- Providing pro-worker incentives and worker support.
- Hiking taxes on corporations and high-income individuals.
- Expanding the state and local tax (SALT) break.
- Imposing tariffs on carbon-intensive imports.
The resolution includes reserve funds that would allow the Senate and House Budget chairs to adjust budgetary levels to accommodate subsequent action on reconciliation legislation, including legislation that doesn’t raise taxes on individuals making less than $400,000. A covered reconciliation bill would also be exempt from certain points of order—requiring 60 votes to waive in the Senate—against legislation with short-term or long-term deficit increases.
It would also allow allocations in the resolution to be adjusted to reflect changes from enacting an infrastructure bill.
Byrd Rule
Bills produced under reconciliation instructions can be passed in the Senate with a simple majority instead of 60 votes, though they’re subject to restrictions.
The Byrd rule, named after former Sen. Robert Byrd (D-W.Va.), limits what can be included in a reconciliation bill. For example, provisions must have actual, or non-incidental, budgetary effects and can’t affect Social Security. Provisions that don’t comply can be removed through points of order that take 60 votes to overcome in the Senate.
For more on the reconciliation process, see the BGOV OnPoint and Cheat Sheet.
Budget Targets
The nonbinding budget blueprint includes spending, revenue, and deficit targets for fiscal 2022 through fiscal 2031.
It would specify outlays of $4.7 trillion in fiscal 2022 and revenue of $3.4 trillion, for a net deficit of $1.3 trillion. It also projects deficits for the rest of the decade, including $1.82 trillion by fiscal 2031.
The budget panels could allocate additional funds to House and Senate appropriators for “program integrity” and other spending, including disability reviews, tax enforcement, programs to curb health-care abuse, reemployment services, wildfire suppression, disaster relief, and veterans’ medical care.
The measure would modify emergency provisions from the fiscal 2018 budget resolution (H. Con. Res. 71) and remove a point of order against emergency designations. It also would restore a point of order against advance discretionary appropriations, with exceptions for certain accounts such as Veterans Affairs Department medical programs.
The measure’s budgetary targets generally would be exempt from adjustments to discretionary spending limits.
Debt Limit
The resolution doesn’t include instructions to increase or suspend the debt limit, which went back into effect Aug. 1 following a two-year suspension (see BGOV OnPoint).
Republicans had called on Democrats to address the debt limit through budget reconciliation and many said they won’t support raising it in a continuing resolution to fund the government past Sept. 30, when the current fiscal year ends.
The Treasury Department is using “extraordinary measures” to juggle cash flow and stay below the renewed debt ceiling, but Treasury Secretary Janet Yellen warned of default risks soon after the August recess. She also called on lawmakers to address the debt limit on a bipartisan basis.
Group Positions
Groups that SUPPORT provisions in the budget resolution include the Center on Budget and Policy Priorities (CBPP), The Nature Conservancy, and OxFam America.
The resolution “takes an important first step toward enacting groundbreaking legislation with long overdue investments to address problems that have plagued the United States for generations,” CBPP President Sharon Parrott said in an Aug. 9 statement.
Groups that OPPOSE the measure include Americans for Tax Reform, the Committee for a Responsible Federal Budget, and the U.S. Chamber of Commerce.
The resolution “would enable a $3.5 trillion reconciliation bill that would dramatically expand the size and scope of government through record levels of inflationary spending, impose massive tax increases, and halt America’s economic recovery,” wrote Jack Howard, the U.S. Chamber of Commerce’s senior vice president of government affairs, in an Aug. 10 key vote alert.
Previous Action & Prospects
Sanders unveiled the resolution with Majority Leader Chuck Schumer (D-N.Y.) on Aug. 9.
The Senate voted 50-49 to proceed to the measure on Aug. 10, after passing its infrastructure package by a vote of 69-30. Debate on a budget resolution is limited to 50 hours in the Senate, and typically includes a vote-a-rama with multiple back-to-back votes on amendments.
House Democrats haven’t unveiled a budget resolution or announced plans to take up the Senate measure. Both chambers must agree to the same text under the same resolution number for the reconciliation process to move forward.
With assistance from Jack Fitzpatrick
To contact the analyst: Michael Smallberg in Washington at msmallberg@bgov.com
To contact the editors responsible: Danielle Parnass at dparnass@bgov.com; Heather Rothman at hrothman@bgov.com