Dems Face Time Crunch To Pass Budget Bill By Year's End

Dems Face Time Crunch To Pass Budget Bill By Year's End

Congressional Democrats will likely face delays as they try to meet President Joe Biden's goal of completing a $3.5 trillion budget reconciliation bill by December that includes family incentives and tax hikes on corporations and wealthy individuals.

The House Budget Committee cleared the way Saturday for possible floor action as early as this week by voting to advance the Build Back Better Act to the full House of Representatives. But several senior Democrats said a floor vote likely would be delayed as party leaders try to develop an amended version that can pass the chamber with a minimum 217-vote majority. There are 220 Democrats in the 435-seat House, with three vacancies.

Sen. Chris Coons, D-Del., a Biden ally, said the complexity of tax-related disputes and a separate, partisan faceoff over a renewal of the debt limit suspension, which ended Aug. 1, could delay completion of the reconciliation bill for Biden's recovery agenda.

"We need to give relief to the American people that they can feel and see within the next few months, at the most," Coons told Law360. "It's clear the finished product will be less than $3.5 trillion."

In line with Biden's call Friday to finish the bill and put the country in "a very different place" by the end of the year, Coons said Democrats could "dial up or dial down" the bill's cost by adjusting sunset dates for priorities in the legislation to expedite a final deal.

House Speaker Nancy Pelosi, D-Calif., has signaled plans to try to reduce the overall top-line, or gross, cost of items in the bill to satisfy undecided centrists.

"We'll see how the number comes down and what we need in that regard, but we have agreed on an array of pay-fors in the legislation," Pelosi said Sunday on ABC's "This Week."

Pelosi has said the bill would be financed under a rough bicameral revenue-raising framework backed by top party leaders and Biden. She has vowed to pass the reconciliation bill on a separate track from the Senate-passed bipartisan infrastructure deal, which is scheduled to come to the House floor for a vote Thursday.

As Democrats try to expand support for the reconciliation bill, they have examined potential tweaks to a proposed four-year patch for the one-year expanded child tax credit enacted in the American Rescue Plan Act. They also could look to scale back permanent extensions of the credit's refundability and one-year expanded versions of the child and dependent care credit and earned income tax credit for workers without qualifying children.

Other issues on the table include a restructuring of the temporary $10,000 cap on state and local tax deductions, a mandate for bank information reporting on customer accounts, green energy incentives, and higher corporate, capital gains and top individual tax rates.

House Ways and Means Committee Chair Richard Neal, D-Mass., said the reconciliation tax package approved by his panel had gained momentum as a way to reshape the tax code to help working families. But he said he could not predict when the bill would be finished.

"Timing is always speculative at best," he told Law360.

House Rules Committee Chair Jim McGovern, D-Mass., said his panel could take up the bill as early as Tuesday but predicted that significant amendments to the measure would be needed before passage.

"Things are going to have to change for a number of reasons," McGovern told Law360.

If a bicameral deal is cut, he said it could be incorporated into the budget by his panel before the bill goes to the floor.

Rep. Stephanie Murphy, D-Fla., who voted against the reconciliation tax package in the Ways and Means Committee, said she and other uncommitted centrists wanted to reach an informal bicameral deal similar to a formal conference committee's accord to meld competing versions of the bill.

"What we're asking for is that it be pre-conferenced," Murphy told reporters last week.

In the 50-50 Senate, Democrats have bypassed committee markups, for now, and launched talks aimed at pulling together liberals and centrists, including Sens. Joe Manchin, D-W.Va., and Kyrsten Sinema, D-Ariz.

Manchin has urged Biden to broker a pragmatic deal.

"He's the president. He can do anything he wants to do," Manchin told Law360.

Despite Manchin's call for a "strategic pause," Sen. Debbie Stabenow, D-Mich., a member of the Finance Committee, said she hoped for a fast deal.

"There won't be a long pause," Stabenow told Law360.

Sen. Ben Cardin, D-Md., a senior member of the Finance Committee, said many senators probably would support a strategy of trying to cut a bicameral deal before the Senate has any floor votes.

"There's a concern among moderates in the House that they don't want to vote on something that doesn't pass the Senate. So there may be an accommodation to the moderates in the House," Cardin told Law360.

For their part, Republicans have argued the bill would undercut efforts by businesses and families to deal with fallout from the coronavirus pandemic. They have sought to slow down the bill in the hope it will lose traction.

"We're going to fight it at every stage," Sen. Mike Crapo, R-Idaho, ranking member on the Finance Committee, told Law360.

Senate Minority Whip John Thune, R-S.D., said the GOP would continue to insist that Democrats redo the fiscal 2022 budget resolution to allow a debt limit suspension to move in the reconciliation bill rather than in other legislation. Such an approach, which Democrats opposed, could delay action on the reconciliation bill for several weeks.

"If they don't get it done by the end of the year, it starts losing momentum," Thune told Law360. "There's going to be more pressure on their people because this is going to be an unpopular vote in a lot of swing districts."

Rep. Steve Womack, R-Ark., former chair of the Budget Committee, said Democrats technically had ample time to finish the reconciliation bill before its budget framework expires in September 2022. But he said they could face blowback in the coming elections if the reconciliation bill remains unfinished.

"There are two different clocks: the procedural clock and the realistic, political clock," Womack told Law360.

With no deal yet in sight, Kenneth Kies, manager of the Federal Policy Group consulting firm and former chief of staff of the congressional Joint Committee on Taxation, said it was possible that Democrats could go past Biden's year-end target for finishing the bill. He pointed to President Ronald Reagan's signing of the 1986 tax overhaul about two weeks before a general election.

"If they can't get it done by the end of the year, I don't know how they put up a white flag and give up," Kies told Law360.

Dems Face Time Crunch To Pass Budget Bill By Year's Endhttps://www.cbiz.com/Portals/0/Images/Hero-DemsFaceTimeCrunch.jpg?ver=H4gsG8xcd0rty7VN-OZmkA%3d%3dCongressional Democrats will likely face delays as they try to meet President Joe Biden's goal of completing a $3.5 trillion budget reconciliation bill by December that includes family incentives and tax hikes on corporations and wealthy individuals.2021-09-21T17:00:00-05:00Congressional Democrats will likely face delays as they try to meet President Joe Biden's goal of completing a $3.5 trillion budget reconciliation bill by December that includes family incentives and tax hikes on corporations and wealthy individuals.Regulatory, Compliance, & LegislativeFederal TaxYes