Budget reconciliation instructions likely to incur deficits

By on August 5, 2021 0

This means they wouldn’t have to pass a debt limit increase with only Democratic votes, but it’s risky because it gives the GOP leverage on other issues like appropriation bills for fiscal year 2022 which will have to be negotiated this fall. And that could put more pressure on the interim financing bill needed to get past the Sept. 30 end of the current fiscal year without a partial government shutdown.

Moreover, assuming the budget plan can go through the Senate – as early as next week – House moderates are already backing exemptions from the pay-as-you-go budget rules for climate-related spending. Members of the Blue Dog Coalition and others see climate change as an emergency and argue that failure to address it will hurt the economy in the long run, which will negatively impact the budget.

Biden’s budget plan proposed nearly $ 800 billion in climate-related spending, for example, although some of it is included in the bipartisan infrastructure package. If there is a similarly-sized budget hole in the eventual reconciliation bill, House Democratic leaders could possibly claim that is what party moderates agreed to at the start of the year when the rules of the room have been changed.

The reconciliation plan would include trillions of dollars in spending and tax incentives to replace petroleum-based technology and cut carbon emissions, as well as provide free kindergarten and community college, family and medical leave. government paid, subsidized child care and other benefits.

Pay for itself?

Democrats also want to include government negotiation of Medicare drug prices to lower the cost of prescriptions in public and private health insurance plans, adding Medicare benefits such as dental care, vision and hearing, and a path to citizenship for undocumented migrants.

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