Democrats begin drag-out budget process to pass COVID-19 relief

House and Senate Democrats on Monday filed their budget resolution, gearing up for a fight with Republicans that could end with a $1.9 trillion COVID-19 relief bill moving through the Senate with only the support of the chamber’s 50 Democrats.

Democrats and the Biden White House have yet to decide whether they’ll use budget reconciliation to eliminate the threat of a Republican filibuster to move their package.

President Biden is engaging with Senate Republicans who are backing a smaller $618 billion package, and he’s made clear he’d like to earn a bipartisan victory.

But the White House has also sent the unmistakable signal that they’re willing to use budget reconciliation to ram legislation through the Senate if they are unsatisfied with GOP concessions in order to get a bigger relief package.

And they’re prepping the budget measure as one alternative to get to the finish line, with the House expected to vote on the budget resolution Wednesday.

The reconciliation instructions follow the outlines of Biden’s proposal. It would provide for $1,400 stimulus checks, extend emergency unemployment benefits through September, give $350 billion in aid to state and local governments squeezed by the pandemic and fund an expanded vaccination and testing effort, among other priorities.

Both parties have used the reconciliation process to sidestep the Senate filibuster and enact legislation. Democrats used it to pass President Obama’s health care law, and the GOP used it to pass President Trump’s 2017 tax cuts.

The resolution is the first step in a long process, setting the overall spending limit and dividing it up among authorizing committees. For example, the Ways and Means Committee, which oversees stimulus checks and unemployment insurance, was instructed to return legislation with up to $941 billion in spending.

Once the House approves the resolution, committees will have until Feb. 16 to write legislation and return it to the Budget Committee before the final reconciliation bill can go to the floor.

The process in the Senate, which will also be busy with Trump’s second impeachment trial starting next week, will be more complicated.

When the resolution comes to the floor, possibly by the end of this week, senators will be allowed to present an unlimited number of amendments, giving Republicans an opening to force tough votes for Democrats. 

Once a resolution passes the Senate, committees will write their reconciliation bills. GOP senators then will get a second shot at making deep changes to the bill by asking the Senate parliamentarian to determine whether any particular section violates the so-called Byrd Rule.

The rule, named after the late West Virginia senator, precludes budget reconciliation legislation from including items that do not have a budgetary impact or are deemed by the Senate parliamentarian to be “merely incidental” to the fiscal impact.

Budget watchers have long thought that the Democratic proposal to increase the minimum wage to $15 per hour would not pass the rule’s muster, though Senate Budget Committee Chairman Bernie Sanders (I-Vt.) has argued otherwise.

“I think we can absolutely make the case to the parliamentarian that what we’re doing is consistent with the Byrd Rule,” he said, arguing that the Congressional Budget Office (CBO), the official scorekeeper, should take into account the savings a higher minimum wage would have on federal welfare programs.

Democrats have also discussed overruling the parliamentarian, a much more controversial step.

Republicans argue that using budget reconciliation undermines chances for collaboration and makes a mockery of Biden’s call for unity.

“Less than two weeks ago, the Biden Administration was calling for unity and bipartisanship in order to bring the country together, however, Democrats are now ignoring that call and are preparing a budget resolution that will set the stage to jam through a partisan COVID relief bill costing nearly $2 trillion and a liberal wish list of provisions unrelated to the ongoing pandemic,” House Republican Whip Steve Scalise (La.) said in an email urging his conference to vote against the resolution on Wednesday.

The slim Democratic majority in the House means Speaker Nancy Pelosi (D-Calif.) can only afford a handful of defections for the bill to pass.

Democrats say reconciliation is merely a backup plan in case they fail to strike a deal with Republicans, with House Budget Committee Chairman John Yarmuth (D-Ky.) referring to the process as merely “another option.”

“We will act expeditiously, using whatever parliamentary procedures necessary, to save lives and our economy,” he said.

Senate Majority Leader Charles Schumer (D-N.Y.) went a step further, suggesting that Republicans could still vote for the reconciliation bill, an unlikely prospect.

“There is nothing in this process that will preclude it from being bipartisan,” he said Monday. “The only thing we cannot accept is a package too small or too narrow to pull our country out of this emergency.”

Republicans argue that the Biden proposal is too large, is poorly targeted and comes on the heels of a $900 billion package that passed in late December. 

A report from the CBO released Monday projected that the economy would only be $808 billion in the hole through 2025, suggesting that a smaller bill could do the trick for setting it back on course.

But congressional Democrats say bigger action is necessary to reduce the economic suffering and damage. They swiftly rejected the GOP proposal, which stripped out state and local aid, reduced the size of stimulus checks to $1,000, scrapped the minimum wage increase and shortened the life of emergency unemployment benefit programs to late June.

“The package outlined by 10 Senate Republicans is far too small to provide the relief the American people need. In particular, a three-month extension of jobless benefits is a non-starter,” said Sen. Ron Wyden (D-Ore.), the incoming Senate Finance Committee chairman.

Democrats are concerned that failure to act expeditiously will allow unemployment benefits set to expire on March 14 to lapse. Staffers say they have been inundated with constituent calls over lapsed benefits from December, when Trump signed the extension just hours after benefits were set to lapse.

Monday’s CBO report found that unemployment was not expected to fully recover until 2024 and even then would remain above 4 percent through the decade, higher than the pre-pandemic low of 3.5 percent.

“We are going to get to full employment much, much later than is necessary if we do not have the $1.9 trillion package that Biden has put forward,” said Gene Sperling, who served as director of the National Economic Council under President Obama.