Senate Democrats announce $3.5 trillion budget agreement

WASHINGTON (AP) — Senate Democrats announced Tuesday that they have reached a budget agreement among themselves that envisions spending an enormous $3.5 trillion over the coming decade. The fiscal plan would pave the way for Democrats' drive to direct a huge pool of federal resources at climate change, health care and family-service programs sought by President Joe Biden.

Senate Majority Leader Chuck Schumer, D-N.Y., announced the accord flanked by all 11 Democrats on the chamber’s budget committee after a two-hour evening meeting that capped weeks of bargaining among party leaders, progressives and moderates.

The agreement is a major step in Democrats' drive to turn Biden's effort to bolster an economy that was ravaged by the pandemic and set it on a course for long-term growth. Separately, bipartisan senators have been working toward another measure that would spend around $1 trillion on roads, water systems and other infrastructure projects.

If congressional Democrats rally behind the budget agreement announced Tuesday and push it through Congress in the coming weeks, it would help them enact a subsequent, sweeping bill that would actually fund their priorities.

That’s because the budget resolution contains language that would let Democrats move the follow-up, huge spending bill through the Senate with just a simple majority, not the 60 votes Republicans could demand by using a bill-killing filibuster.

“We are very proud of this plan,” Schumer told reporters. “We know we have a long road to go. We’re going to get this done for the sake of making average Americans lives a whole lot better.”

Schumer said Biden would attend a lunch at the Capitol Wednesday of all Senate Democrats “to lead us on to getting this wonderful plan” enacted. But Schumer and other lawmakers did not respond when asked if they had the support of all 50 senators they will need to push the measure through the evenly divided Senate.

Schumer said the proposal would call for financing Biden's budget priorities “in a robust way.” He also said it would include a priority of Senate Budget Committee Chairman Bernie Sanders, I-Vt., and other progressives: an expansion of Medicare, the federal health insurance program for older people, to cover dental, vision and hearing services.

Sanders called the agreement “a pivotal moment in American history” that would end an era in which, he said, rich people and big companies weren’t bearing enough of the burden of financing government programs.

“Those days are gone,” said Sanders. “The wealthy and large corporations are going to start paying their fair share of taxes, so that we can protect the working families of this country.”

Sen. Mark Warner, D-Va., a leading moderate who helped shape the budget package, said the measure would be fully paid for with offsetting revenue but provided no detail.

The budget will include language stating that there will be no tax increases on people making less than $400,000 a year or on small businesses, according to a Democratic aide familiar with the negotiations granted anonymity to discuss them.

The budget resolution sets only broad spending and revenue parameters, leaving specific decisions about which programs are affected — and by how much — for later.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

WASHINGTON (AP) — A bipartisan group of senators worked swiftly late Tuesday to shore up a $1 trillion infrastructure compromise they struck with President Joe Biden even as momentum shifts to a more robust Democratic proposal that's coming into focus.

Biden’s big infrastructure proposals are moving on parallel tracks in Congress in a race against time and political headwinds to make a once-in-a-generation investment in the nation. Senators from both groups huddled privately again Tuesday evening. The bipartisan deal appeared back on track, with senators upbeat as they aimed for a new Thursday deadline to wrap up the details despite opposition from business leaders, outside activists and some GOP senators over how to pay for it.

“Rolling, rolling, rolling,” said Sen. Lisa Murkowski, R-Alaska, as she exited a nearly three-hour meeting of the more than 20 senators involved in the effort.

A “productive” meeting, said Sen. Krysten Sinema of Arizona, a Democratic leader of the bipartisan effort.

As one meeting was wrapping up, another was being launched down the hall across from Senate Majority Leader Chuck Schumer's office. Schumer convened Democrats on the Budget Committee with White House officials to negotiate a topline framework for Biden's more expansive proposal. It could swell beyond $3.5 trillion.

Biden is proposing a multitrillion-dollar package of investments, among the most substantial undertakings of its kind, some say on par with the New Deal in the 1930s. From building back roads and bridges to investing in the everyday services Americans depend on like child care, elder care and broadband, the proposals reach all corners. Underpinning the investments are efforts to combat climate change with energy efficiency and weather resiliency.

The bipartisan effort was thrown into doubt earlier Tuesday when Republicans said it was unlikely it would be ready for a vote next week, as hoped.

But senators exiting the meeting suggested they hadn't so much resolved the questions over how to pay for the package but moved past them — apparently accepting that some of the proposed revenue streams may not pass muster in formal assessments by the Congressional Budget Office, the lawmakers' main fiscal scorekeeper.

Sen. Joe Manchin, D-W.Va., said he hoped that CBO's score, as it is called, would show that "everything’s paid for. If not, we’ll have to make some adjustments.”

Even if the bipartisan group can meet its new deadline for agreement, it's still a longshot the bill would be ready for a vote next week.

"We hope to get most issues resolved by Thursday, but there will surely be others after that,” said Sen. Mitt Romney, R-Utah.

Paying for the new infrastructure was always going to be a challenge, which is partly why public works investments have lagged over time. Biden has proposed raising taxes on corporations and wealthy Americans earning more than $400,000 a year, which would cover not only the nearly $1 trillion proposal, but also the broader Democratic plan. Republicans reject that approach.

Instead, the bipartisan group of senators racing to salvage its plan strained to come up with other revenue streams to fund the $1 trillion package, which includes about $579 billion in new spending beyond regular expenditures that are funded by gas taxes and other sources.

One proposal to go after taxpayers who skip out on income taxes initially had potential bipartisan appeal, but now is being lambasted by the outside groups as a way to enable the IRS to snoop around Americans' personal finances. It would boost the IRS by $40 billion to bolster staff to audit tax returns, unleashing as much as a $100 billion net increase in revenues to federal coffers.

Sen. Kevin Cramer, R-N.D., said funding the IRS to audit potential tax scofflaws "is just way too undefined and nebulous and frankly eerie-sounding to most Republicans to be serious, in my view.”

Another proposal calls for reinstating fees that chemical companies used to pay for cleaning up the nation’s worst hazardous waste sites, which could bring in about $13 billion over 10 years. Those fees were allowed to expire in 1995, and the cleanup efforts are funded by general revenues. Biden has called for restoring the fees “so that polluting industries help fairly cover the cost of cleanups.”

But the American Chemistry Council called on lawmakers to remove the fees, saying they would likely be paid by consumers in the form of higher costs.

Money could come from $125 billion in COVID-19 relief funds approved in 2020 but not yet spent, as well as untapped unemployment insurance funds, among a hodgepodge of other sources.

Ed Mortimer of the U.S. Chamber of Commerce said some of the group’s members have concerns about some revenue sources in the bipartisan framework, but he added, “This is an investment we believe is worth making.”

Senate Minority Leader Mitch McConnell, R-Ky., said he remained hopeful the bipartisan effort could proceed. But his earlier insistence that it "ought to be credibly paid for” signaled the party’s stance.

Ten Republican senators would be needed to back the bipartisan bill, joining with all 50 Democrats to reach the 60-vote threshold typically required to overcome a filibuster and advance it toward passage.

Meanwhile, the broader Democratic framework being compiled by independent Sen. Bernie Sanders and senators on the Senate Budget Committee he chairs is gaining momentum.

Behind closed doors Tuesday, Sanders made the case for why Democrats should go big. According to a person who spoke on condition of anonymity to discuss the private lunch meeting, Sanders encouraged his colleagues to focus primarily on the needs of America's working people and the climate crisis, rather than a topline budget number.

Sanders met with Biden at the White House on Monday and said they are on the same page in seeking a “transformative” investment for the nation.

Once rivals for the White House, Sanders and Biden are now joining forces to shape the president’s top priority.

“My job is to do everything I can to see that the Senate comes forward with the strongest possible legislation to protect the needs of the working families of this country,” Sanders said.

“The end of the day, we’re going to accomplish something very significant,” he said.

The emerging package would include funds to build child care centers and help families pay for that care, and expanded health care options for older Americans including eye, dental and vision benefits. Public works would be bolstered to remove lead in drinking water pipes, enhance electric vehicle markets and fight climate change.

Under budget rules, Democrats could pass the proposal on their own in the evenly split Senate, without the 60 votes typically required.

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Associated Press writers Lisa Mascaro and Kevin Freking in Washington contributed to this report.