How Democrats could shrink their $3.5 trillion spending plan

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But that’s still too little for Washington state’s House Progressive Caucus Chair Pramila Jayapal, who wants a price tag in the range of $2.5 trillion to $2.9 trillion.
Whatever the top-line figure, there are three main ways Democrats can reduce the cost of the package: remove items from their huge wish list, delay the start date of measures, or end them after only a few years. do, or the eligibility or leniency of narrow programs.

“I don’t think it’s viable to choose either of these options,” said Mark Goldwyn, senior policy director for the nonprofit’s Committee for a Responsible Federal Budget, which argues that the actual cost of the package is closer to $6 trillion. Is. “They have to make all these choices.”

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jettisoning provision

One way to reduce the cost of the package is to drop some provisions altogether — but that won’t be easy to meet, as most of them have long been on Democrats’ to-do lists.

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While the Congressional Budget Office has yet to release an assessment of the House bill, the White House has incorporated a number of similar measures into its US Family Plan proposal that it released in April.

In it, the president called for $200 billion for Universal Pre-K and $109 billion for two years of free community college. Biden is looking to invest $225 billion in child care and the same amount in the national paid family and medical leave program — although some experts say paid leave could cost double that.

The House bill also includes a bevy of tax breaks that would help advance Democrats’ equity, health care and climate agendas. According to the Committee for a Responsible Federal Budget, it will extend the increased child tax credit through 2025 and make it permanently refundable at an estimated cost of $556 billion.
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Climate-related tax breaks, in large part for renewable energy, amount to up to $273 billion, the watchdog group says.

Meanwhile, according to the White House, making the Enhanced Affordable Care Act premium subsidy permanent would cost $200 billion.

Jason Fichner, chief economist for bipartisan policy, said that when it comes to deciding what to do differently, lawmakers may want to consider which programs are more viable to implement and administer and Which ones have some bipartisan support so that they can avoid changes in administration. Center.

timing adjustment

Another method lawmakers use to reduce the size of the law is to make measures temporary – that’s why all Individual Tax Deductions in Republicans’ 2017 Act For example, expiring after 2025.
Democrats can use the same trick in a budget reconciliation bill — which they did last spring in a $1.9 trillion US rescue plan that extended the child tax credit for one year and the Affordable Care Act premium subsidy for two years.

Already, in a budget reconciliation package, lawmakers are only extending the increased child tax credit through 2025, even though many want it to be permanent.

The hope is that the temporary provisions will become so popular that eventually they will be difficult not to expand, said Don Schneider, an economist at Cornerstone Macro, an investment research firm and former chief economist on the House Ways and Means Committee when Republicans controlled Congress.

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This is Jaipal’s favorite method. She said on a call with members on Tuesday that if the top-line figure needs to be cut, lawmakers should reduce years of funding for some programs rather than cut entire policies or base eligibility on income. Should consider doing so, according to a familiar source. Call.

Congress can also lower the price tag by delaying the start of benefits. For example, under the House bill, dental benefits will not be added to Medicare until 2028, to reduce the financial impact of the provision. Vision coverage will begin next October and hearing services a year later.

The Congressional Budget Office estimated in 2019 that dental coverage would cost $238 billion over 10 years, compared with $89 billion for hearing services and $30 billion for vision.

narrow the range

One reason the reconciliation bill is so expensive is that it would expand the nation’s safety net to a wider swath of Americans.

Some moderates don’t want it to be liberal enough.

For example, ManChain is pushing to base eligibility for some programs on income. They have discussed lowering the threshold for the increased child tax credit, but also requiring that parents work and earn an income to qualify.

Independent Senator Angus King from Maine, who is aligned with the Democrats, told Granthshala he supports the child tax credit, but “has some reservations about what the income levels are and who it goes to. “

Manchin and other moderate Democrats have also limited new Medicare benefits to people below a certain income threshold — which would be the first time that coverage in the program would be linked to income.

RELATED: Expanding the Child Tax Credit Was a Democratic Dream Come True — But It Might Be on the Chopping Block

The White House has not ruled out reducing eligibility.

“Some programs in the Build Back Better plan have income limits, as you know, for eligibility, such as the Child Tax Credit and Child Care,” Deputy Press Secretary Karine Jean-Pierre said Tuesday. “We are ready to target other programs as well.”

The amount of benefit may also be deducted or other types of restrictions may be added. For example, Democrats could provide a child tax credit of up to $1,800 for children under age 6, instead of continuing the $3,600 credit for this year. They can reduce the maximum monthly paid vacation benefit in line with Social Security.

In addition, Medicare may charge a premium for its new coverage, which would reduce annual costs from $81 billion to $63 billion, according to the Committee for a Responsible Federal Budget.

“The bottom line is they’re going to dig stuff up, they’re going to have to have means-testing policies, they’re going to have to find ways to make things cheaper — and they’re still probably not going to satisfy their numbers,” Goldwyn said.

Granthshala’s Annie Grier, Manu Raju and Kate Sullivan contributed to this report.

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