Democrats can undo GOP tax reform, pass Biden's $6T budget with reconciliation: expert

Democrats are able to use budget reconciliation to amend the GOP tax reform bill to raise taxes as well as pass President Biden's $6 trillion proposed FY2022 budget, according to federal budget expert Marc Goldwein.

Democrats previously used reconciliation to avoid the legislative filibuster and pass Biden's $1.9 trillion American Rescue Plan on a party-line vote. Senate Democrats have a slim 50-50 majority with Vice President Kamala Harris as the tie-breaking vote.

Senate Majority Leader Chuck Schumer has started the reconciliation process for Biden's spending proposals with Vermont Sen. Bernie Sanders, chairman of the Senate Budget Committee. Schumer said on Tuesday that the reconciliation bill will incorporate the elements of Biden's $2.25 trillion American Jobs Plan and $1.8 trillion American Families Plan that are left out of any bipartisan infrastructure framework. 

A recent study concluded that Biden's proposed American Families Plan would cost about $700 billion more than the White House is projecting. 

Biden's $6 trillion FY2022 budget request accounts for new spending that would be created by Biden's jobs and families plan, explained Goldwein, senior vice president and senior policy director at the Committee for a Responsible Federal Budget. He said that all of the tax revenue in the budget proposal would be applied toward new federal spending.

"They definitely have this fiscal year 2022 budget available for reconciliation, so no problem, no difficulty, no obstacles, other than getting, you know, 50 votes to do at least one more reconciliation bill using the upcoming fiscal year's budget," Goldwein told Just the News Wednesday.

There are bipartisan negotiations taking place around infrastructure, and a framework for a potential bill is being reviewed by the White House. Schumer said on Tuesday that the bipartisan framework doesn't go far enough on climate change. Democratic Sen. Edward Markey of Massachusetts, a sponsor of the Green New Deal, has voiced the same concern about the possible bipartisan deal.

"I think there are many people, maybe everybody in our caucus, who believes it's a good start, but it doesn't do enough," Schumer said. "And that's why we need a reconciliation package, a budget resolution, that goes beyond what's in the bill, and I think just about everybody understands that."

Biden's jobs plan contains physical transportation infrastructure improvements and green energy spending, which the president has said is aimed at creating union jobs.

Progressive lawmakers want an infrastructure package to include a significant investment in high-speed rail. On Wednesday, Sen. Kirsten Gillibrand (D-N.Y.), Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Rep. Seth Moulton (D-Mass.) called for federal funding that could pay for the construction of a high-speed train that runs from Albany to New York City.

"High-speed rail connects people to opportunities, creates union jobs, & helps the planet," Ocasio-Cortez wrote on Twitter. "Our infrastructure ask is simple: For every $1 the US puts into car infrastructure, let's put $1 into rail."

Biden's families plan is geared toward what Democratic leaders call "human infrastructure," which includes universal pre-K, paid family leave, tuition-free community college and financial support for childcare.

According to a recent Senate parliamentarian ruling, Democrats have one more shot to use automatic budget reconciliation, meaning that their reconciliation bill would be able to pass out of the Senate Budget Committee with an 11-11 tie.

Reconciliation bills "aren't subject to filibuster and the scope of amendments is limited, giving this process real advantages for enacting controversial budget and tax measures," reads a Center on Budget and Policy Priorities report on the federal budget process. 

The GOP tax reform law in 2017 included across-the-board income tax rate cuts and lowered the corporate tax rate to 21%. Biden is seeking to raise the corporate tax rate as well as the top income tax bracket. If the Democrats pass Biden's proposed tax increases in the reconciliation bill, Goldwein said the revenue would pay for Biden's new spending plans but none of that revenue would reduce the deficit.

"So the debt is actually going to grow faster, not slower," he said.

Biden's budget proposal is estimated to create a $1.8 trillion deficit. Looking beyond Biden's $6 trillion FY2022 budget, Goldwein emphasized that he's worried about the unfunded promised benefits of Social Security and Medicare.

"What I'm more worried about is that the underlying fiscal situation is completely unsustainable with Social Security, Medicare, Medicaid, growing way faster than revenue," Goldwein said. "And the president is taking all the easiest tax increases, you know, all the tax increases on the wealthy and corporations and using them for new spending, which means they're not available to finance, you know, our underlying deficit.

"So it's not so much that I worry that the president's plan is not sustainable. It's that I'm worried that he's layering a new plan on top of an unsustainable fiscal situation and sort of using a lot of potential deficit reduction, instead, to pay for new spending." 

Goldwein outlined what Democratic leaders in Congress are supposed to do under the budget reconciliation rules.

"What they're supposed to do is write a full budget that expresses the full intent of their agenda over the course of the year," he explained. "And then they can have reconciliation instructions to help facilitate that budget. That's what they're supposed to do. But all they have to do, in order to get that fast-tracked, is to have the reconciliation instructions. The rest of that they could choose to skip, and they're violating, effectively, the budget law or the spirit of the budget law, but it really doesn't matter. There's no recourse for them not doing a real budget."

Just the News reached out to Sanders' office with questions about his plans for the budget reconciliation bill but didn't receive a response.

The office of South Carolina Sen. Lindsey Graham, ranking member of Budget Committee, was not available for comment on reconciliation.