Democrats face tough choices on trimming spending package

Democrats face challenges in reducing the size of their wide-ranging social spending package, a task that will be necessary in order to get key centrists to support a bill.

While lawmakers had been focusing on a top-line number of $3.5 trillion in new spending and tax cuts, Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) are balking at that amount, calling it excessive. Progressives have now started to acknowledge that a final package is likely to be smaller than $3.5 trillion.

There are several ways that Democrats could go about cutting down the size of their plan, from shortening the duration of spending programs and excluding others to cutting back the availability of various priorities and making some less generous. Each approach, however, comes with drawbacks for the party.

Economic policy experts say Democrats are likely to take more than one approach to trimming the size of their spending package.

“I think a combination is likely what we see at the end of the day,” said Zach Moller, director of the economic program at the center-left think tank Third Way.

Democrats are aiming to pass a bill that implements key aspects of President Biden’s economic agenda through the budget reconciliation process, which would allow the measure to pass the Senate with a simple-majority vote and avoid a GOP filibuster. But lawmakers have a long list of priorities they would like to see included, in areas such as child care, education, housing, health care and climate.

No Republicans are expected to vote for the bill, meaning every Democratic senator and nearly every House Democrat will need to vote for the measure to get it to Biden’s desk.

Democrats adopted a budget resolution in August that aimed to facilitate a bill with $3.5 trillion in new spending. But Manchin and Sinema have indicated that they want the final package to come under $3.5 trillion, with Manchin suggesting a top-line number of $1.5 trillion.

Progressives — who initially wanted legislation closer to $6 trillion — have yet to reach an agreement with Manchin and Sinema on the exact bill size. However, supporters of the $3.5 trillion figure have indicated that the eventual amount will be a compromise between what they want and what centrists are seeking.

During a meeting with House Democrats on Friday, Biden suggested lawmakers consider a range between $1.9 trillion and $2.3 trillion. Rep. Pramila Jayapal (D-Wash.), the chairwoman of the Congressional Progressive Caucus (CPC), said on CNN’s “State of the Union” on Sunday that Manchin’s proposed number is “too small to get our priorities in” but said that the final package would total between $1.5 trillion and $3.5 trillion.

The question then becomes how to come down from $3.5 trillion.

Speaker Nancy Pelosi (D-Calif.) said in a letter to colleagues Monday that because Biden has indicated the top-line number will need to be lowered, “decisions must therefore be made regarding the size and scope of the reconciliation bill.”

One option frequently cited by progressives would be to include as many spending priorities as possible but shortening their duration in some cases in an effort to provide assistance to people in multiple ways.

“One of the ideas that’s out there is fully fund what we can fully fund, but maybe instead of doing it for 10 years, you fully fund it for five years,” Rep. Alexandria Ocasio-Cortez (D-N.Y.) said Sunday on CBS News’s “Face the Nation.”

But reducing the size of the spending package through timing changes might not sit well with moderates, who may argue the timing changes obscure the true cost of the legislation.

“The idea that we would enact a whole bunch of programs and sunset them after two years, three years, four years, to me that’s just budget gimmickry,” Rep. Ed Case (D-Hawaii) told The Hill on Monday. “That’s not solid budgeting, that’s not solid policy, that’s deceptive. And it’s basically completely designed to avoid the hard decisions that now face us, which is to choose among an array of worthy initiatives the ones that will truly benefit the people that most need help.”

Manchin told reporters on Thursday that a $3.5 trillion bill could ultimately end up costing even more than that because the spending programs would be continued indefinitely.

“Once you start doing something, it becomes ingrained into it and you don’t end it,” he said.

At least some programs in the final spending package are likely to either be temporary or not begin for several years, because Democrats’ plans for a package with $3.5 trillion in spending and tax cuts included some short-lived provisions. For example, legislation approved by the House Ways and Means Committee last month would only extend much of the expanded child tax credit through 2025, and it would not start Medicare dental benefits until 2028.

Another way Democrats might trim the package is to remove some of their spending and tax agenda items from the package.

Jayapal said on CNN that in addition to looking at shortening the length of spending programs, the CPC is looking at some of the smaller items that are being considered to see if they could be removed or funded instead through the annual appropriations process.

“That right there will probably cut out a decent amount,” she said.

But Jayapal acknowledged that some of those items could be priorities for various lawmakers.

“They might have been put there to keep somebody happy, so we have to be careful as we pull them out,” she said.

Democrats could also reduce the cost of some of the social programs by tightening eligibility requirements or scaling back some benefits.

Manchin has repeatedly expressed a desire to target programs toward lower-income households.

“Throughout September, I have made it clear, to all those who would listen, the need to means test any new social programs so that we are helping those who need it the most, not spend for the sake [of] spending,” he said in a statement on Wednesday.

Critics of means testing say more-targeted programs can often be harder for federal agencies to administer.

“Ultimately, means-tested programs are more bureaucratic, result in complicated eligibility criteria and put recipients through unnecessary hoops, making it hard to get the benefits for folks who need it the most,” said Lindsay Owens, executive director of the progressive economic policy organization Groundwork Collaborative.

Jayapal said means testing is “not what I want to do,” adding that she doesn’t think it’s smart policy. But she also acknowledged that negotiations are in their early stages.

Lawmakers and the White House continue to discuss the parameters of the spending package, and they have a lot of work ahead of them.

Marc Goldwein, senior policy director at the budget watchdog group Committee for a Responsible Federal Budget, said he thinks Democrats can’t “realistically” cut the size of the bill purely through timing changes or tinkering around the edges.

“They’re going to actually have to make some tough choices,” he said. 

Jordain Carney contributed.