Senate Democrats say they’ll fully pay for their $3.5 trillion plan for child tax credits, climate measures, education, and other measures, but it’s unclear how many of their proposed pay-fors will actually raise revenue or cut spending.
Democrats plan to adopt a budget resolution with reconciliation instructions for a major legislative package that would include corporate tax hikes and a higher income tax for top earners, according to an outline by a senior Democratic aide. An expansion of Medicare would be funded by cuts to drug prices, while higher emission standards and carbon tariffs would be used to combat climate change, Bloomberg News’ Jordan Fabian and Erik Wasson report.
But the plan also banks on “long-term economic growth” as a pay-for, a reference to dynamic scoring, which could score the bill as less costly due to potential economic growth spurred by its investments.
Sen. Joe Manchin (D-W.Va.), a key moderate, told reporters he’s OK with some reliance on dynamic scoring in the effort to ensure the bill is fully paid for. But Manchin said he raised concerns during a lunchtime meeting between President Joe Biden and Senate Democrats that inflation could be triggered by a flood of spending.
“I said I’m concerned about inflation, and I said I want to see more of the details,” Manchin told reporters yesterday.
Related: Manchin, Tester Hold Back on Budget Deal Awaiting Details
More broadly, though, some fiscal conservatives are wary of the promise that the $3.5 trillion bill’s cost will be fully offset. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said she’s concerned lawmakers won’t rely on entirely legitimate offsets, especially because they relied on gimmicks to agree to pay-fors in infrastructure talks.
“So far, the only real indication we have is the bipartisan infrastructure bill, which is the first piece of all of this, and a lot of the pay-fors unfortunately are either exaggerated or not going to score properly,” MacGuineas said in an interview on Bloomberg Radio’s Balance of Power yesterday. “And they call it fully paid for, but it’s going to come up well short of that promise. That leaves me very concerned that this next bill will also not be really paid for in a meaningful way.”
Read more: Biden Agenda Gains Senate Ground With Big Hurdles Remaining
Bicameral Agreement: Speaker Nancy Pelosi (D-Calif.) praised the Senate Democratic outline yesterday, calling it “a victory for the American people” in a letter to colleagues. “Our House Committees stand ready to work with the Senate, as this topline agreement is turned into legislative text,” Pelosi wrote.
Pay-Fors a Question Mark in Budget Plan
Bloomberg
July 15, 2021 11:05 am
Senate Democrats say they’ll fully pay for their $3.5 trillion plan for child tax credits, climate measures, education, and other measures, but it’s unclear how many of their proposed pay-fors will actually raise revenue or cut spending.
Democrats plan to adopt a budget resolution with reconciliation instructions for a major legislative package that would include corporate tax hikes and a higher income tax for top earners, according to an outline by a senior Democratic aide. An expansion of Medicare would be funded by cuts to drug prices, while higher emission standards and carbon tariffs would be used to combat climate change, Bloomberg News’ Jordan Fabian and Erik Wasson report.
But the plan also banks on “long-term economic growth” as a pay-for, a reference to dynamic scoring, which could score the bill as less costly due to potential economic growth spurred by its investments.
Sen. Joe Manchin (D-W.Va.), a key moderate, told reporters he’s OK with some reliance on dynamic scoring in the effort to ensure the bill is fully paid for. But Manchin said he raised concerns during a lunchtime meeting between President Joe Biden and Senate Democrats that inflation could be triggered by a flood of spending.
“I said I’m concerned about inflation, and I said I want to see more of the details,” Manchin told reporters yesterday.
Related: Manchin, Tester Hold Back on Budget Deal Awaiting Details
More broadly, though, some fiscal conservatives are wary of the promise that the $3.5 trillion bill’s cost will be fully offset. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said she’s concerned lawmakers won’t rely on entirely legitimate offsets, especially because they relied on gimmicks to agree to pay-fors in infrastructure talks.
“So far, the only real indication we have is the bipartisan infrastructure bill, which is the first piece of all of this, and a lot of the pay-fors unfortunately are either exaggerated or not going to score properly,” MacGuineas said in an interview on Bloomberg Radio’s Balance of Power yesterday. “And they call it fully paid for, but it’s going to come up well short of that promise. That leaves me very concerned that this next bill will also not be really paid for in a meaningful way.”
Read more: Biden Agenda Gains Senate Ground With Big Hurdles Remaining
Bicameral Agreement: Speaker Nancy Pelosi (D-Calif.) praised the Senate Democratic outline yesterday, calling it “a victory for the American people” in a letter to colleagues. “Our House Committees stand ready to work with the Senate, as this topline agreement is turned into legislative text,” Pelosi wrote.