How Democrats Could Cut $ 3.5 Trillion In Budget

WASHINGTON – As Democratic leaders struggle to unite their caucus behind a broad set of domestic policies, it is more and more clear th...

WASHINGTON – As Democratic leaders struggle to unite their caucus behind a broad set of domestic policies, it is more and more clear the $ 3.5 trillion in expenses and the tax increases will have to be cut, perhaps a lot, to get to President Biden’s desk.

This will involve difficult choices for a party fractured by mistrust and competing priorities. But in a package meant to shape all facets of American life, including public education, health care, and the environment, there is room for agreement, even in a barely divided Congress.

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

Senator Bernie Sanders, the Vermont independent and chairman of the Senate Budget Committee, initially urged his colleagues to spend up to $ 6 trillion over 10 years as they begin to draft the bill.

To reduce scope to its current price of $ 3.5 trillion over 10 years, aides said, Sanders and his colleagues have used budget tricks like setting end dates earlier on programs or reducing their proposed size. to reduce their cost.

Essentially, rather than sacrificing entire programs, Democrats have chosen to reduce the amount of money spent on some of them. This is a tactic they could use again to reduce the bundle further.

Democrats have said they want to extend the refundable tax credit for children, which was expanded as part of the $ 1.9 trillion pandemic assistance bill enacted in March and now provides benefits to more than 93% of children – 69 million – by sending monthly checks up to $ 300 per child to families. They could lower the overall cost of the package by extending it until 2024 instead of 2025.

Likewise, a proposal to extend Medicare benefits to cover dental, vision and hearing benefits could be phased in, reducing its cost within the bill’s official 10-year deadline.

House Democrats have proposed giving seniors immediate access to visual benefits, hearing benefits in 2023 and a dental program in 2028. Some senior Senate Democrats say they want dental benefits established sooner . While a slower deployment would cost less, Democrats would likely fail to reap an immediate political advantage.

The simplest fall-back solution 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 law, known as the American rescue plan. According to the Committee for a Responsible Federal Budget, a non-partisan budget watchdog, this meager option would total $ 900 billion, even more than President Barack Obama’s 2009 stimulus package, which, when passed, was considered huge.

The expansion of the child tax credit has already been hailed as a radical change in the policy to fight poverty. Right now, the House plans to extend it until 2025 at a cost of about $ 500 billion to the treasury.

The law also significantly expanded the subsidies for purchasing health insurance through the Affordable Care Act and extended these subsidies to the middle class until 2022. Extending them for 10 years would cost $ 210 billion. dollars.

For childless workers, the Pandemic Relief Act increased the maximum earned income tax credit, which supplements the income of the working poor, from about $ 540 to about $ 1,500 and raised the cap income to qualify from about $ 16,000 to about $ 21,000, while letting adults as young as 19 access the program for the first time. Extending that would cost $ 135 billion. Another popular but temporary provision – a much larger tax credit for child care and dependents – could be extended by a decade for $ 95 billion.

Politically, this meager option should not be a burden, since the House and Senate have already passed both agendas. Extending the child tax credit for a full decade would raise the price to $ 1.5 trillion.

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

Progressive Democrats have indicated they will not vote for the $ 1 trillion infrastructure bill that has already been passed by the Senate and will fund new roads, bridges and tunnels without securing passage of the bill. climate change and social protection law, which would push the country’s fleet of cars, trucks and buses more towards electric power, supported by strengthened electric utilities to manage all these vehicles and powered by the solar, wind and other renewable sources. Skipping the first without the second could actually make global warming worse, they argue.

To address those concerns, Democrats could include the welfare elements of the lowest common denominator option – expanding the temporary benefits of the US bailout – while also tackling climate change. These climate provisions would cost $ 585 billion over 10 years, according to the Committee for a Responsible Federal Budget.

They would move utilities away from coal and natural gas power plants with a $ 150 billion clean electricity performance program, finance the deployment of renewables with tax credits worth more than $ 100 billion. dollars and provide $ 42 billion in tax credits for the purchase of electric cars, trucks and buses, while injecting billions into domestic and commercial energy efficiency.

These efforts, along with a full 10-year extension of children’s credit, would bring the total to $ 2.1 trillion.

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

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Newsrust - US Top News: How Democrats Could Cut $ 3.5 Trillion In Budget
How Democrats Could Cut $ 3.5 Trillion In Budget
Newsrust - US Top News
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