How Democrats Can Shrink the $3.5 Trillion Budget Bill

[ad_1]

WASHINGTON — As Democratic leaders seek to unite their factions behind an expanding domestic policy package, increasingly clear The $3.5 trillion in spending and tax increases will likely have to be cut by a lot before it gets to President Biden’s desk.

This will involve difficult choices for a party torn by insecurity and competing priorities. But there’s room for agreement, even in a thinly divided Congress, in a package that aims to shape every aspect of American life, including public education, health care, and the environment.

Here are three possible scenarios on how to structure a final deal.

Senator Bernie Sanders, an independent from Vermont and chairman of the Senate Budget Committee, initially urged his colleagues to embrace spending as much as $6 trillion over 10 years as he began drafting the bill.

To narrow the scope to the current price tag of $3.5 trillion over 10 years, his aides said, Sanders and his colleagues used budget tricks, such as setting programs with earlier end dates or narrowing their recommended sizes to cut costs.

In essence, instead of sacrificing all programs, Democrats have chosen to reduce the amount of money allocated to some. It’s a tactic they can use again to shrink the pack even further.

Democrats have said they want to extend the deadline. refundable child tax creditExpanded as part of the $1.9 trillion pandemic relief bill that went into effect in March, it now benefits more than 93 percent of children — 69 million — by sending families monthly checks for up to $300 per child. They can lower the total cost of the package by extending it to 2024 instead of 2025.

Similarly, expanding Medicare benefits to cover dental, vision, and hearing conditions could be phased out more slowly, reducing the cost of the bill over the official 10-year timeframe.

House Democrats have proposed providing seniors with access to vision aids immediately, hearing aids in 2023, and a dental program in 2028. Some top Senate Democrats say they want dental aid established sooner. While it will be cheaper to spread it more slowly, Democrats will likely not reap an immediate political benefit.

The easiest turnaround for Democrats might be to extend the generous tax credits and other benefits created for a single year in the $1.9 trillion pandemic relief act known as the American Recovery Plan. According to the Committee for the Responsible Federal Budget, an unbiased financial watchdog group, this skinny option will total $900 billion, still more than the 2009 stimulus plan that was considered huge when President Barack Obama passed.

The expansion of the child tax credit has already been hailed as a major change in anti-poverty policy. Currently, the House plans to extend it by 2025, at a cost of approximately $500 billion to the Treasury.

The law also greatly expanded subsidies for purchasing health insurance through the Affordable Care Act, extending these subsidies to the middle class by 2022. Extending them for 10 years would cost $210 billion.

For workers without children, the pandemic benefit law increased the maximum earned income tax credit supplementing the income of the working poor from about $540 to about $1,500, and raised the income cap from about $16,000 to about $21,000. The 19-year-old is accessing the program for the first time. Expanding it will cost $135 billion. Another popular but temporary provision—a much larger child and dependent care tax credit—can be extended for ten years to $95 billion.

Politically, this skinny option shouldn’t be a heavy burden, as the House and Senate have already passed both programs. Increasing the child tax credit to a full ten years would raise the price tag to $1.5 trillion.

The cost of such a plan could be offset by proposals by the House Ways and Means Committee to raise taxes on the rich and increase the corporate tax rate.

Progressive Democrats have said they will not vote on the $1 trillion infrastructure bill that has already passed the Senate and will fund new roads, bridges and tunnels before the climate change and social welfare bill, which will strain the nation’s auto fleet, is passed. , trucks and buses are turning to more electric power, powered by electric services powered and powered by solar, wind and other renewable sources to drive all these vehicles. Going through the first without the second could make global warming worse, they say.

To answer these concerns, Democrats can incorporate the social welfare components of the lowest common denominator option – by expanding the temporary benefits of the American Recovery Plan – as they take big strides on climate change. According to the Responsible Federal Budget Committee, these climate provisions will cost $585 billion over 10 years.

With the $150 billion Clean Electric Performance Program, they would move utilities away from coal and natural gas-fired power plants, finance renewable energy distribution with more than $100 billion in tax credits, and offer $42 billion in tax credits for electric car purchases. trucks and buses also pump billions of dollars into home and commercial energy efficiency.

With the full 10-year extension of the child loan, these efforts will bring the total to $2.1 trillion.

Adding the rest of the international corporate and business tax changes drafted by the House Ways and Means Committee to the higher corporate tax rate and increased taxes on the rich will pretty much pay for this option.

[ad_2]

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *