Sanders on the Reconciliation Bill _ Why at least 3.5 Trillion is Necessary

 For America's sake, we can't afford to cut $3.5 trillion spending plan

By: Senator Bernie Sanders
September 28, 2021

We live in an unprecedented moment as our country faces enormous crises including COVID, climate change, attacks on democracy, income and wealth inequality and the multi-decade decline of the American middle class. 

As chairman of the Senate Budget Committee I proposed a $6 trillion reconciliation bill which would begin addressing these long-neglected problems. A strong majority of the Democratic caucus supported that proposal, but not all. As a result, we made a major compromise to reduce that budget from $6 trillion down to $3.5 trillion. This entire package will not add to the deficit and be paid for by demanding that the very wealthiest people in our country and large, profitable corporations start paying their fair share of taxes. Poll after poll, especially among working class people, shows overwhelming support for what we are trying to accomplish. 

Now, for whatever reason, there are pundits out there who say we should compromise even more and cut back on addressing the long-neglected problems facing working families as well as climate change. Really? Please tell me where we should cut. 

Should we end the $300 direct payments to working class parents which have cut childhood poverty in our country by half?

Should we continue to ignore the dysfunctionality of our childcare system which forces millions of working families to spend 20-30% of their limited incomes on childcare and keeps over a million women out of the workforce? 

Should we deny low and moderate income young people the opportunity to get the higher education and job skills they need by making community colleges tuition free? 

Should we continue allowing the pharmaceutical industry to charge us, by far, the highest prices in the world for prescription drugs? 

Should we continue a situation where many millions of seniors are unable to afford to go to a dentist to get treatment for their rotting teeth, or buy the hearing aids and eyeglasses they need — or should we expand Medicare to cover those basic health care needs? 

Should we continue being the only major country on earth not to guarantee paid family and medical leave? 

Should we, as an aging society, force older and disabled Americans into expensive nursing home care or should we expand home health care and allow them the opportunity to stay in their own homes?

Should we continue to have 600,000 Americans remain homeless, or should we finally begin building the millions of units of low income and affordable housing that we need? 

And then there is the existential threat of climate change. 

When the planet becomes warmer and warmer, with unprecedented forest fires, drought, floods, extreme weather disturbances and acidification of the oceans are causing mass destruction, and when scientists tell us that we only have a few years to avoid irreparable damage to our country and planet, should we really continue to ignore this global crisis? 

This reconciliation bill is being opposed by every Republican in Congress as well as the drug companies, the insurance companies, the fossil fuel industry and the billionaire class. They want to maintain the status quo in which the very rich get richer while ordinary Americans continue to struggle to make ends meet. Well, I disagree. I believe that now is the time, finally, for Congress to stand up for working families and have the courage to take on the big money interests and wealthy campaign contributors who have so much power over the economic and political life of our country. 

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How Reconciliation Works

 Max Sawicky

 

VIEWPOINT

Democrats Are Wasting Precious Time with a Measly "Bipartisan" Infrastructure Deal

The plan announced at the White House on Thursday is a drop in the bucket. Democrats need to forget Republicans and pass a bold package that makes massive public investments.

 

https://inthesetimes.com/article/bipartisan-deal-biden-democrats-infrastructure-reconciliation-bernie-sanders

 

 

Under budget reconciliation rules, Democrats can pass any tax-spending package they want with 50 votes. For instance, Senator Bernie Sanders (I‑Vt.) who heads the Senate Budget Committee is developing a $6 trillion plan for physical and human infrastructure that would include policies from both American Jobs Plan and American Rescue Plan. The constraint on passing such a plan now is not the Republicans or the filibuster — it’s a handful of nominal Democrats within the Senate caucus. Democratic Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona get all the brickbats, but hiding behind them are a few more laggards. It may not be possible to completely buy out the dismal duo of Sinema and Manchin, but if they can be rented to vote for a Democratic plan, there is nowhere for the backsliders to hide. There is lots of room in a multi-trillion-dollar package for sending some goodies to West Virginia and Arizona.

 

How Budget Reconciliation Works

 

The Chief David Dayen, the American Prospect

Yesterday, ten Republican Senators took their shot at weakening Joe Biden’s American Rescue Plan, proposing a smaller bill and seeking a meeting with the President. The Republican proposal would maintain vaccine funding from Biden’s bill, but reduce eligibility for direct payments, cut the proposed federal boost to unemployment from $400 to $300 and limit the extension to June (from September), remove state and local fiscal aid and a host of other measures, and generally skimp everywhere. It would cost around $600 billion, less than one-third of Biden’s plan. Biden is humoring the Senators by inviting them to the White House for a meeting, but I doubt much comes of it. Senate Democrats are uninterested in negotiating down needed relief, wary of how this played out in 2009, with a too-small stimulus and big midterm losses. Nobody is choking on the $1.9 trillion number thus far, and no fetish is being made of bipartisanship. Bernie Sanders says Democrats have the votes to pass Biden’s bill without Republican support, using a process he would manage called budget reconciliation. Republicans acknowledge that, even if their bill gets passed, Democrats can advance more in reconciliation. The House is kicking off that process today, and the Senate will as early as tomorrow. But there’s one critical element to the reconciliation process that will determine whether millions of Americans will get a raise at work. And that in large part will come down to a group of economists in the Congressional Budget Office.

Briefly, the reconciliation process works this way: both chambers of Congress pass a budget resolution, with instructions to various committees. The committees go back and write a bill, under some broad guidelines in the budget resolution that will match what Biden wants in his American Rescue Plan (namely, a $1.9 trillion bill). Because it’s a budget bill, everything in it has to have a significant budgetary impact. That’s true of almost all of the relief bill, which is largely just spending on various items. However, there’s one element of Biden’s plan that, at first glance, might not seem budgetary. He wants to raise the minimum wage to $15 an hour by 2025, in line with a bill Sanders and others released in January. The bill would increase wages for 32 million Americans. But will it survive the Byrd rule, named for former Democratic Senator Robert Byrd, which dictates whether measures have enough budget impact to make it through reconciliation? The Congressional Budget Office has the role of “scoring” legislation for its budgetary impact. What CBO says doesn’t necessarily dictate to the Senate parliamentarian whether a bill can be accomplished in reconciliation. But it doesn’t hurt to show a big number at CBO. When CBO scored the Raise the Wage Act (the $15/hour minimum wage bill) in 2019, it showed almost no budget impact, with spending over the 10-year budget window of just $76 million. That’s because it only assessed the impact of the federal government having to pay more money to workers and contractors that it directly employs. However there’s a significant ancillary impact on the federal budget from raising the minimum wage, in two ways. First, when people make more money they become less reliant (at least under current eligibility restrictions) on federal safety-net programs, like Medicaid or SNAP (food stamps). Second, higher wages means more tax revenue, both in federal withholding and in payroll taxes that go to Social Security and Medicare.

The combination of these measures make the minimum wage hike not at all incidental to the budget. The Berkeley Labor Center estimates that workers who would receive a wage increase in this bill receive $107 billion per year in safety net support. That wouldn’t be the budget impact—you have to factor in whether some of that spending is state money, and whether some safety net spending would continue, and the impact of tax revenue. There are also other workers not considered in CBO’s initial score, like the 3 million home healthcare workers paid out of Medicaid funds.  But there’s apparently a study coming soon that does all these calculations, finding that there’s a federal budget savings to raising the minimum wage of $65 billion per year. There’s a big difference between spending $76 million over ten years, what CBO found in 2019, and saving $650 billion-plus, the 10-year budget impact of the minimum wage hike. Now, CBO has to provide another score. And they’re being pressured to consider the full budget impact. That score should come out this week. If the score shows the full impact, that will be powerful evidence to give to the Senate parliamentarian to allow the minimum wage hike to stay in the reconciliation bill. So think about it; the salaries of 32 million workers may depend on whether economists in an office in D.C. decide to use a particular economic model to assess legislation. CBO is in a somewhat unique position. The CBO director, Phil Swagel, was hired by Republicans, after they fired his predecessor for not giving them a good enough score on Obamacare repeal. But Democrats are in charge of both houses of Congress. CBO directors serve four-year terms, from midterm to midterm, and it doesn’t happen often—just twice since CBO’s establishment—that party control changes over in the middle of a term. In theory, Democrats could remove the Republican-appointed CBO director and install their own; the budget committees would make that recommendation. In practice that hasn’t happened before, for a new party to sweep out the old party’s CBO director midterm. It’s not likely to happen; Swagel has been a pretty straight shooter. CBO’s score on Medicare for All, showing major savings on national health expenditures, was actually pretty pleasing to progressives. But the minimum wage score provides a test case. Progressive economists disagree with CBO’s model on the subject. CBO has an opportunity to change that. Not only would it allow Democrats to pass a minimum wage increase through reconciliation, it would give them up to $650 billion in headroom to add additional fiscal measures to the bill.  Biden really wants the minimum wage increase. The potential budget savings helps quiet rumblings about “too big” a stimulus, and would offer a lot of flexibility in reconciliation. That makes the CBO decision enormous. We’ll know this week.