Democrats see $3.5T spending goal is slipping away

There’s a growing realization among Democrats that their plans for a $3.5 trillion spending package to reshape the nation’s social safety net and to tackle climate change will have to be slimmed down because of anxious centrists worried about the 2022 midterms.

Democrats by and large feel confident that President Biden’s ambitious “human” infrastructure agenda has strong public support and that a majority of Americans favor raising taxes on corporations and the wealthy to help pay for it.

But there’s also a recognition that moderate Democrats in swing states and districts need to show they’re shaping the emerging reconciliation package.

And a part of that process may be slimming down the package from the $3.5 trillion goal set last month by the Senate- and House-passed budget resolutions.

“Most times when you face these situations there have to be some changes made in order to get the votes, especially when here in the [Senate] chamber it’s tied and only the vice president can break the tie,” said former Sen. Kent Conrad (D-N.D.), who presided over the budget reconciliation process in 2009 and 2010 when Democrats passed sweeping health care reform legislation.

“You probably will have to shave this back some,” he said of the $3.5 trillion proposal outlined in the budget resolutions passed earlier this summer.

“I suspect there are going to have to be some changes in order to get the votes to pass it,” he added. “Biden has himself said that these things should be paid for. He said that very clearly and he said it repeatedly.

“The closer you get to actually paying for it, the better the chance you have of getting the votes.”

Some centrist Democratic strategists are already warning that the size of the human infrastructure bill needs to be substantially curtailed to avoid a political disaster in the 2022 midterm elections.

“You’ve got all these Democrats in the center who are quietly saying ‘I don’t want to support $3.5 trillion because who wants to run on that given the current climate?’ Have you seen some of the recent polls coming out of the states?” said one strategist.

By battling with progressives over the size of the package, moderates can insulate themselves from Republican claims that their party has been taken over by the “far left.”

Another factor is Biden’s declining approval rating.

A Reuters/Ipsos tracking poll Friday showed Biden with a 47 percent national approval rating and a 46 percent national disapproval rate.

A Civiqs tracking poll this week showed Biden’s approval ratings in several battleground states — Arizona, Florida, Georgia and North Carolina — trailing his disapproval ratings by 10 points to 14 points.

Two of the toughest Democratic votes to corral in the Senate belong to Sens. Joe Manchin (W.Va.) and Kyrsten Sinema (Ariz.), who have both said in recent weeks, they will not support a $3.5 trillion package.

Moderate Democrats in the House such as Rep. Stephanie Murphy (D-Fla.) are also threatening to vote “no.”

Former Rep. Ron Klink (Pa.), a centrist Democrat who represented a Republican-leaning district in western Pennsylvania, says there are other moderate Democratic lawmakers besides Manchin and Sinema who are balking at the $3.5 trillion price tag.

“They’re going to go back and forth,” he predicted about the upcoming negotiations over the size of the package. “There are other senators, too, that are just saying, wait, this is too much, this is too big.”

Klink, however, is urging jittery Democrats not to run away from Biden’s infrastructure agenda.

He warns that ducking for political cover was a fatal mistake made by moderates during the 2009 debate over the Affordable Care Act, which was followed by a landslide Republican victory in the 2010 midterm elections.

“You have to sell your constituents on what it is that you’re doing and why you’re doing what you’re doing,” he said.

Faced with mounting Republican criticism over tax increases that will be part of the reconciliation package, the White House is emphasizing the benefits for the middle class, stressing its desire to enact tax cuts for daycare, health care and working families with children.

Klink said Democrats also need to make the case that floods, drought and fires that have devastated the nation show the pressing need for more infrastructure investment.

But Klink acknowledges it’s a safe bet the total size of the spending bill will fall below $3.5 trillion, though likely not as low as the $1.5 trillion or $2 trillion goal that Manchin has floated as alternatives.

“I don’t think it will be $3.5 trillion but I think it will be much closer to that than $1.5 trillion,” he said.

House Ways and Means Committee Chairman Richard Neal (D-Mass.) made an important disclosure Thursday evening when he told reporters that the revenue-raising package coming out his committee will raise well less than what is needed to fully offset Democratic leaders’ official $3.5 trillion spending goal.

Asked if his package of revenue raisers would reach $3.5 trillion, Neal quickly replied: “Oh, no, no. No, that’s not at the moment what we’re talking about.”

Speaker Nancy Pelosi (D-Calif.) on Wednesday tacitly acknowledged the final package is likely to come in under $3.5 trillion by characterizing that number as a ceiling.

“I don’t know what the number will be. We are marking at $3.5 trillion. We’re not going above that,” she told reporters.

Some Democrats now say it was inevitable that the $3.5 trillion number was going to slip, even though it already represents a major concession by Senate Budget Committee Chairman Bernie Sanders (I-Vt.) and other progressives, who initially pushed for a $6 trillion budget reconciliation spending target.

“I don’t know what the final number’s going to be. I always felt it was going to be less than $3.5 [trillion,]” said Jim Kessler, executive vice president for policy at Third Way, a centrist Democratic think tank, and a former aide to Senate Majority Leader Charles Schumer (D-N.Y.).

But Kessler argued that the top-line revenue number that Neal says he will unveil this weekend won’t necessarily constrain the size of the reconciliation package.

“The budget reconciliation instructions, the budget resolution, basically says Ways and Means has to raise enough money to pay for what Ways and Means is going to spend,” he said, pointing out that offsets can come from other committees.

Even so, the House Ways and Means Committee and the Senate Finance Committee are Congress’s two tax-writing committees and are expected to come up with the bulk of ways to pay for items in the reconciliation package.

Frank Clemente, the executive director for Americans for Tax Fairness, raised concerns earlier this week that the House tax reform bill will wind up raising far less than what’s needed to offset the $3.5 trillion spending goal.

“Based on my back of the envelope estimates of what’s been reported that House Democrats are considering, their revenue target is much too conservative,” he told The Hill.