FEDERAL BUDGET INITIATIVES AT LOGGERHEADS

As the month of September drew to a close and October began, efforts continued on Capitol Hill to reach agreement on two key pieces of legislation: (1) an infrastructure bill, and (2) a separate social policy and climate bill. A bipartisan group of 69 senators, all 50 Democrats and 19 Republicans, in August 2021 successfully passed a roughly $1 trillion infrastructure package aimed at improving the nation’s roads, bridges, ports, and also expanding broadband Internet access for the population. For example, the current provision of telehealth services to residents of rural areas is hampered by broadband being too narrow. The larger bill has a much bigger price tag and is proving to be more nettlesome from the standpoint of not only its broad aims, but also whether it should be passed separately or at the same time as infrastructure legislation.

Disagreements are of both an inter-party nature between Democrats and Republicans as well as between competing factions in the Democratic party. The desired amount of spending for a social policy bill that has a focus on expanding Medicare to include vision, hearing, and dental care; universal prekindergarten; two free years of community college; and creation of a program encouraging utilities to reduce carbon emissions is $3.5 trillion. That figure is where Republicans part company with the Democrats, indicating that several initiatives not only are wasteful, but even have the potential through proposed tax increases to do substantial harm to the overall economy. Within the Democratic party, conflicts also exist between progressives who favor the $3.5 trillion package and centrists who believe that the projected amount of spending is too high and who also have concerns about the amount of taxation needed to finance proposed undertakings.

Adding to the complexity of the situation is the composition of Congress. Usually, Democrats cannot afford a single defection in a Senate that is evenly split between Democrats and Republicans. Whereas over on the House side of Capitol Hill, a thin majority of Democrats means that a loss of a mere three votes can sink what they hope to achieve. The Senate is of much less concern because of the availability of a process called reconciliation, which could make it possible to approve the social policy and climate bill. Rather than needing 60 votes to achieve passage, a simple majority is all that is necessary. Timing also plays an important role. Progressives have indicated that they will block the infrastructure bill if it arrives on the floor for a vote before agreement has been reached on the proposed $3.5 trillion bill.

Other remedies continue to be recommended. One example is to include more short-term spending in the domestic policy package, which would reduce the overall size of the legislation without having to choose which cuts to make, an option that would allow the possibility of extending programs into the future. A different approach would be to fund a reduced number of programs for the long-term rather than expecting to have enough votes in the future when programs might be cancelled. Also, Senator Bernie Sanders (I-VT) has suggested that Medicare benefit expansion should be accompanied by $1,000 debit cards for individuals based on low-income to access vision, hearing, and dental services earlier than what would be provided by the reconciliation bill (e.g., vision in 2022, hearing in 2023, and dental in 2028).