WASHINGTON — Are you confused about what’s going on on Capitol Hill? Can’t distinguish reconciliation from a bipartite agreement? Can’t tell a BIF from a BBB? Wouldn’t you have a debt ceiling if you hit your head on it?
Congressional leaders are trying to pass several tax laws this fall to implement President Biden’s agenda while trying to prevent a default on government debt and a shutdown of federal operations.
The terminology can be confusing, especially when it mixes political branding with Congressional procedures. Here is a glossary of some of the relevant terms, so that you can try to understand it all. Heard another term that you don’t understand? Let us know and we’ll add it.
Sometimes referred to simply as an “infrastructure plan” or “infrastructure bill,” it stands for Bipartisan Infrastructure Framework, and it refers to the deal reached between Democrats and some Republicans in the Senate. The Senate passed it in August with 50 Democratic votes and 19 Republicans. It is currently awaiting a vote in the House.
The compromise legislation includes around $ 1 trillion for rural broadband, public transport, roads, bridges, ports, electric vehicle charging stations and pollution cleanup. The bill does not include tax increases. The fate of the BIF in the House remains uncertain. Taken in isolation, House Democrats would back the BIF, but many progressives want to wait for the other, more partisan side of Mr Biden’s agenda (see reconciliation below) to move forward. They are separate pieces of legislation, but they are politically linked.
It was first a Biden campaign slogan and then it became the catch-all term the administration and Democratic leaders used to describe their various plans to tackle climate change, healthcare, l immigration, tax code, education and child and elderly care.
The term is meant to evoke the idea that restoring pre-pandemic “normal” is not enough and that fundamental aspects of the economy need to be rethought in the future. Often, “build back better” is used to describe a large bill with a wide array of policies Democrats hope to pass in a party line vote, separate from the bipartisan infrastructure bill. This bill is also mentioned by the procedure of Congress that Democrats use to try to pass it, known as reconciliation.
This term technically refers to a Congressional budget procedure, but it has also become a shortcut for the Democrats’ proposed plan for education, health care, child care and climate that they hope to push through. through this process.
The budgetary procedure allows certain legislations to pass by a simple majority in the Senate. It sidesteps the threat of obstruction, which would require 60 votes to overcome and let Republicans block Democratic initiatives. Republicans used reconciliation to pass their 2017 tax law, and Democrats used it in 2010 to complete the health care law.
But the reconciliation process has strict rules, ruling out many policy changes that are not of a budgetary nature. For example, radical changes to immigration law or electoral rules will not progress through reconciliation. Democrats are trying to get the rest of Biden’s economic agenda – the parts not included in the bipartisan infrastructure bill – through this process. This includes tax increases on corporations and high-income individuals, as well as an extension of the expanded child tax credit, climate initiatives and expanded Medicare coverage. No Republican should vote for it.
The Byrd Rule — named after the late Senator Robert Byrd (D., W.Va.) – limits what can be included in reconciliation bills. It excludes non-tax measures from the bill and demands that the bill not increase long-term budget deficits. The Senate parliamentarian advises lawmakers on proposals that comply with the Byrd rule.
$ 3.5 trillion: This is the number most often cited as the overall price of the reconciliation bill that contains all of the spending measures and taxes mentioned above. He was pretty much accepted by many House and Senate Democrats when they voted to begin the reconciliation process.
But the final package, if there is one, won’t end up being as important, since the centrists Sense. Joe Manchin (D., W.Va.) and Kyrsten Sinema (D., Arizona) have ruled out spending that much. . The $ 3.5 trillion figure refers to the amount over the next 10 years, not a single year. It includes spending as well as tax cuts such as the expanded child tax credit and tax breaks for renewable energy.
The $ 3.5 trillion is a gross number, not a net number. This means that it does not take into account the share of the legislation paid by taxes. Democrats have pledged to offset all or at least most of the package with new revenue measures.
A $ 3.5 trillion increase in federal spending over a decade would represent a 5.5% increase over what is currently projected. That’s about 1.2% of the gross domestic product projected during this period.
Some Democrats have pledged to only support a “fully paid” package. This would mean that the projected revenues from the tax measures would correspond to the total projected expenditures. This is why President Biden described the cost of the reconciliation bill as zero, although it is obvious that a paid bill would add costs to the federal government and costs to people paying taxes. higher.
Sometimes these projections and affirmations get a little creative and ultimately don’t satisfy all bean counters. For example, senators negotiating the bipartisan infrastructure deal said the legislation was fully paid for, but the Congressional Budget Office disagreed and said there was a gap of around $ 250 billion. dollars. But he still passed the Senate.
This is a permanent resolution, and it is totally separate from the BIF and the reconciliation bill. A continuing resolution maintains government funding at existing levels for a specified period of time, for core operations that require annual funding. This does not directly affect benefit programs such as Medicare and Social Security which do not require annual credits.
This is typically used as a stopgap when a full year deal cannot be reached, but in recent years the government has often been funded over long periods of time by regularly renewing existing funding levels. Passing a “RC” keeps the government from shutting down while lawmakers work on more sustainable legislation. Lawmakers passed one just before the end of the federal fiscal year on September 30 and will likely consider another later this fall or pass a spending bill for the entire year.
Congress set a total cap on federal borrowing, then periodically increased or suspended it. Unless the debt ceiling is raised around October 18, the Treasury Department will run out of cash to meet all of its obligations, meaning some federal workers, contractors and bondholders may not be paid. on time. Because U.S. government borrowing is such an important part of the global economy, Treasury Secretary Janet Yellen warned that failure to raise the limit could risk economic calamity.
The need to increase the limit stems in large part from past decisions that Congress has made to spend more money than it raises on taxes.
Democrats have tried to craft debt ceiling legislation with CR, but Republicans have blocked it. The legislative path to raising the debt ceiling remains uncertain.
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