Jul 14, 2021 - Politics & Policy

Senate Democrats unveil details of $3.5 trillion budget deal

Bernie Sanders and Chuck Schumer

Photo: Samuel Corum/Getty Images

Senate Democrats revealed on Wednesday key details of their $3.5 trillion budget framework, a starting point for a Democrat-only bill for "human" infrastructure that would enhance federal safety net programs, expand Medicare and tackle climate change.

Why it matters: The release of the FY2022 budget deal formally kicks off the process for getting a pair of infrastructure bills across the finish line.

  • Democratic leaders need to hold all 50 of their senators together to pass this budget framework, which they plan to usher through the budget reconciliation process.


Tax credits:

  • Extend the child tax credit under the American Rescue Plan, the earned income tax credit, and separate child and dependent care tax credits.
  • A senior Senate Democratic aide said the duration of each credit’s enactment will be determined by congressional scoring and committee input.

Climate change:

  • Create 80% clean electricity and 50% economy-wide carbon emissions by 2030.
  • More funding for the clean energy standard, clean energy and vehicle tax incentives, "climate-smart agriculture," wildfire prevention, federal procurement of clean technologies, and the weatherization and electrification of buildings.
  • The resolution will also propose a new methane reduction and polluter import fees "to increase our emissions reductions," per the aide.

Key provisions in the American Families Plan

  • Universal pre-K for 3- and 4-year-old children, child care and community college.
  • Increased funding for historically black colleges and universities (HBCUs), pell grants, paid family and medical leave, nutrition assistance and affordable housing.

Health care costs

  • The package would add a new dental, vision, and hearing benefit to Medicare, extend expansions of the Affordable Care Act, expand home care, reduced prescription drugs costs and expand Medicaid coverage to states that haven't done so yet.

Economic inequality

  • Increased funding for housing investments and manufacturing and supply chains.
  • Improve green cards and pro-worker incentives and penalties.

Pay fors

The plans to offset the package are broken into three separate buckets.

Tax reform

  • Increasing corporate and international taxes, as well as taxes on the wealthy.
  • Increased funding for the IRS to crack down on tax enforcement.

Health savings

  • Through new language on prescription drugs and by repealing the Trump rebate.

Long-term economic growth

  • The framework would prohibit tax increases on families making under $400,000 per year, small businesses and family farms.

The latest: During Senate Democrats' caucus lunch on Wednesday, Majority Leader Chuck Schumer (D-N.Y.), Budget Committee Chair Bernie Sanders (I-Vt.) and Sen. Mark Warner (D-Va.) briefed their colleagues on these top-line details.

  • President Biden also attended the lunch in an attempt to keep Democrats unified in their support for both infrastructure bills.

What to watch: The Senate will continue to work on the massive budget reconciliation package while it takes up a $1.2 trillion bipartisan infrastructure, with a goal of passing both by August recess.

Go deeper