House Will Let Senate Go First on FY22 Budget Blueprint
House Budget Committee chairman John Yarmuth (D-KY) made it official this week: he is calling off his plans to have his panel mark up a fiscal 2022 budget blueprint in mid-July. Instead, the House will wait to see what, if any, budget plan can get 50 Democratic votes in the Senate.
In other words, the House won’t move until the Senate’s most left-wing member (Budget Committee chairman Bernie Sanders (I-VT)) writes a budget blueprint that can get the support of the Senate’s most conservative Democrat (Joe Manchin (D-WV)) but still keeps liberals on board as being the best they can get.
Several weeks ago, Sanders staff had completed a swing-for-the-fences progressive budget that would have funded every single Biden Administration request ($4.45 trillion in gross spending and tax cuts over 10 years) and added another $1.55 trillion in new spending on top of that. This would have been offset by $3.2 trillion in tax increases, for a net $2.8 trillion in deficit increases, but it was the rounded $6 trillion number that made headlines.
|10-Yr. Baseline Deficits (OMB Calculation)||13.18||13.18|
|10-Yr. Deficit Increases from Mandatory Spending & Revenue Proposals (Gross)||+4.45||+6.00|
|10-Yr. Deficit Decreases from Offsetting Revenue Increases||-3.60||-3.22|
|10-Yr. Deficit Increases from Mandatory Spending & Revenue Proposals (Net)||+0.85||+2.78|
|10-Yr. Deficits with Mandatory Spending & Revenue Proposals||14.02||15.96|
President Biden has since agreed to downsize the physical infrastructure parts of his American Jobs Plan by about one-third in order to reach agreement on the bipartisan Senate infrastructure framework (about $275 billion), so whatever budget Sanders proposes will be reduced by at least that amount. But there is no way on earth that the Joe Manchins of the world will vote for a gross spending increase anywhere near $6 trillion, nor will people like Jon Tester (D-MT) vote to run deficits $2.5 trillion higher than the already godawfully high deficits in the baseline.
This process is going to involve endless back-and-forths behind the scenes of Sanders throwing spending and tax increase numbers at the wall and seeing what will stick with 50 votes.
Meanwhile, the House will wait. 28 years on, House leaders still remember “getting BTU’d.” House Democrats voted for an ambitious energy tax as part of President Clinton’s economic plan (taxing all forms of energy based on their British Thermal Unit equivalent). But the White House had no real plan to get the BTU tax through the Senate, which killed it dead (replaced it with, among other things, a 4.3 cent per gallon motor fuels tax), leaving House Democrats in the position of having voted in favor of a broad-based tax that hit the middle class but getting no substantive benefit from the tax actually becoming law.
There is no timeframe for action on a budget. The Budget Act says that after April 1 of each year, a budget resolution is privileged and can go straight to the Senate floor without a committee markup. With equal numbers of Republicans and Democrats on the committee, any markup was always going to end up in a tie vote, which would have required a time-consuming discharge motion on the Senate floor per the power-sharing agreement, so this will save some time.
But both the House and Senate have to agree on a budget resolution before Congress can consider a budget reconciliation bill. The most contentious part of this budget will be the provisions that set the parameters on that reconciliation bill – the instructions telling each committee how much they can increase the deficit.
Delays in Congress passing a budget resolution equal delays in Congress getting started on a budget reconciliation bill. Once the bipartisan infrastructure bill is ready for a vote in the Senate (which could be as soon as mid-July), each day’s delay in getting a budget will make it harder for Democratic leaders to resist putting the bipartisan plan up for a vote.