Biden’s Expansive Economic Agenda Set for Senate Endorsement (1)

President Joe Biden’s big plans for the U.S. economy are on the verge of passing their first major legislative tests in the Senate, leaving their future to intra-party struggles between Democratic progressives and moderates.

A broad group of Democratic and Republican senators is prepared to place a bipartisan stamp of approval on a cornerstone of the Biden agenda -- a $550 billion infrastructure program -- in a vote scheduled to begin late Tuesday morning.

The remainder of Biden’s economic agenda is encompassed in a $3.5 trillion budget resolution the Senate is scheduled to consider next. It allows Democrats to bypass Republicans to expand child care, health coverage and education benefits and address climate change, paid for by raising taxes on the wealthy and corporations.

WATCH: The U.S. Senate is set to vote Tuesday on a $550 billion infrastructure deal that will open the door for a second plan through budget reconciliation.

Source: Bloomberg

The vote on that could drag out late into the night or even into Wednesday morning as Republicans propose multiple amendments to force Democrats into taking politically fraught votes. But both parties expect Democrats will prevail on the simple majority vote required.

“Senate Republicans will be bringing forth common sense amendments on what Americans actually want and actually need,” Mitch McConnell, the chamber’s GOP leader, said. “We’re going to argue this out on the floor at some length.”

With Democratic House Speaker Nancy Pelosi declaring she won’t permit a vote on the infrastructure package until the Senate follows the budget blueprint with legislation delivering on its promises, the fate of the entire agenda depends on maintaining unity among all 50 senators who caucus with Democrats and the party’s thin majority in the House. Pelosi can lose only three Democratic votes and still prevail against unified Republican opposition.

Ideological tensions flared anew on Monday. Six House Democratic moderates wrote Pelosi pressing her to allow a vote on the infrastructure package rather than waiting for the Senate to send over a second bill enacting the rest of the agenda.

LISTEN: Julie Norman, professor at University College London, talks infrastructure with Bloomberg’s John Tucker.

They also raised concerns about the Senate budget plan’s spending levels and tax increases, as well as its effect on already rising inflation, the national debt, and the ability to respond to future COVID emergencies.

Meanwhile, Representative Raul Grijalva, a leading House progressive who chairs the Natural Resources Committee, criticized the Senate budget as inadequate on climate change.

“You can’t spin away the fact that it doesn’t offer the Interior Department enough money to meet some of our critical climate goals,” Grijalva said in a statement.

Senate Majority Leader Chuck Schumer, right, and Senator Bernie Sanders at the U.S. Capitol on Aug. 9.

Photographer: Ting Shen/Bloomberg

The Senate budget blueprint includes universal pre-K for 3- and 4-year-olds, a new child care benefit, a federal family leave benefit, two years of tuition-free community college, and new dental, vision and hearing benefits for Medicare beneficiaries.

“It is big, bold change, the kind of change America thirsts for,” Senate Majority Leader Chuck Schumer said on the Senate floor.

The plan gives broad latitude for policies to raise taxes on corporations and those making more than $400,000 a year, and it instructs lawmakers to provide tax cuts for those making less.

The plan also calls for a more generous federal income tax deduction for payments of state and local taxes, or SALT. More than 20 House Democrats have threatened not to vote for Biden’s economic agenda unless it includes an expansion of the SALT tax break.

U.S. Transportation Secretary Pete Buttigieg aboard the Raritan Valley Line train during a visit to New Jersey on Aug. 9, to highlight the infrastructure program’s investments in passenger and commuter rail.   

Photographer: Mark Kauzlarich/Bloomberg

QuickTake: All About SALT, the Tax Deduction That Divides U.S.

Democrats did not include an increase in the federal debt limit, which will have to be passed soon after Congress returns to work next month, along with a stop-gap spending bill to keep the government open after the fiscal year ends Sept. 30. That means an increase in the debt limit would not be eligible for the lower simple-majority threshold for budget-related legislation and be vulnerable to a filibuster unless at least 10 Republicans and all 50 senators who caucus with Democrats vote to limit debate.

Senate Republican leader Mitch McConnell has vowed that Republicans won’t cooperate in lifting the federal borrowing limit -- potentially setting up a fiscal cliff with the risk of both a government shutdown and a default on its debts -- because Democrats are moving forward on their own with expansions in social benefits.

The budget blueprint would allow about half of the $3.5 trillion plan to be financed with debt.

The separate infrastructure package includes $110 billion in new spending on roads and bridges, $73 billion for electric grid updates and $66 billion for rail and Amtrak. There is also funding for expansion of broadband service in rural areas and upgrades to drinking water systems through replacement of dangerous lead pipes.

(Updates with McConnell remarks in fifth paragraph)

--With assistance from MacKenzie Hawkins and Laura Davison.

To contact the reporters on this story:
Mike Dorning in Washington at mdorning@bloomberg.net;
Steven T. Dennis in Washington at sdennis17@bloomberg.net;
Billy House in Washington at bhouse5@bloomberg.net

To contact the editors responsible for this story:
Joe Sobczyk at jsobczyk@bloomberg.net

Megan Scully

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