Congress

A Compromise Spending Total Takes Shape

SK Ashby
Written by SK Ashby

Centrist Democrats in the Senate have not entirely spelled out exactly what would persuade them to vote for a large spending bill passed through budget reconciliation, but Democrats in the House of Representatives aren't waiting for them to say.

The tax-writing House Ways and Means Committee has released their version of what the tax code will look like after passing a reconciliation bill and it's centered around largely but not completely rolling back Trump's tax cuts.

The key detail in the House Democratic proposal may be the total amount of money that will raise over 10 years.

In an attempt to finance the new spending, the Democratic-led committee will debate a proposal to raise $2.9 trillion in revenue over 10 years, according to a document circulated among members of the panel. [...]

Even if the legislation as proposed passes Congress and is signed by Democratic President Joe Biden, corporate taxes would still be lower than they were before the enactment of the tax cuts pushed through by Republicans in 2017. But the top individual income tax rate would revert to its pre-2017 level.

With some Democrats saying they won't vote for a bill as large as $3.5 trillion and that they want it to be paid for, $2.9 trillion might be the magic number if that's what House Democrats settle on raising through taxes.

Some more liberal Democrats will balk at compromising, but a $2.9 trillion spending bill would still be the largest bill that any of them have or ever will vote for. It would be crazy not to support it.

In addition to raising taxes, Democrats also proposed using the tax code to encourage the construction of more low-income housing, including in rural areas, which could help win the support from some wavering moderate Democrats, including Senator Joe Manchin from West Virginia.