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Why Democrats’ $3.5 trillion reconciliation bill is a losing game

Majority Leader Charles Schumer (D-N.Y.) leads President Biden as he arrives to the Capitol for a luncheon with Senate Democrats to discuss an infrastructure plan on Wednesday, July 14, 2021.
Greg Nash

This week, President Biden and congressional Democrats released their $3.5 trillion budget reconciliation plan. Democrats have lauded this proposal as a progressive bill that would produce change in American society on par with Franklin Roosevelt’s New Deal or Lyndon Johnson’s Great Society.

The progressive budget proposal vastly expands governmental social, environmental, educational, and healthcare programs — including funding for universal pre-K, nutrition assistance, the child tax credit, and clean energy initiatives — all of which would be paid for by tax increases on the wealthiest Americans and American businesses.

Ultimately, regardless of the plan’s outcome — that is, passage or failure — pursuing this proposal will end up being a lose-lose situation for Democrats in the 2022 midterms.

Put another way, it is highly unlikely that Biden will be able to get credit both for this larger $3.5 trillion social reform bill, passage or no passage, and for passing infrastructure in a bipartisan fashion.

I was hired by Bill Clinton in 1994 after the Democrats’ blow-out defeat in that year’s midterm election — so, I well-recall the damaging political impact of government overreach and the then-largest tax increase in history, which the then-Democratic Congress passed without Republican support

Democrats faced a similar fate in 2010 in President Obama’s first midterm election, when the party lost control of Congress once again due in large part to voters’ perception of governmental overreach by the Democrats in power.  

History could very well repeat itself again this year if the Biden administration and the Democratic leadership in Congress seek to pass — intact — this $3.5 trillion-dollar proposal through the reconciliation process.

Looking ahead to the midterms, the Democrats would benefit from approaching the social priorities in this bill — childcare, education, and clean energy investments — on an issue-by-issue basis, rather than ramming through one of the largest government expenditures in history on a simple party line vote.

That being said, this is unlikely to happen. Currently, Democrats are operating under the assumption that the redistribution of wealth by taxing the rich is politically valuable, and will not cause any electoral backlash — even if this is done by eschewing bipartisanship. However, the viability of that approach, based on my own experience along with past history, suggests that their theory could be problematic.

And to be sure, Democrats also face a number of considerable hurdles as they move forward with the proposal. They need 50 votes in the Senate to pass this bill through budget reconciliation, and are banking on the votes of moderate Senate Democrats, including Senators Joe Manchin (W.Va.) and Kyrsten Sinema (Ariz.) — neither of whom has indicated that they are on board with the bill. 

Senate Majority Leader Schumer (N.Y.) scheduled the vote on the bipartisan infrastructure bill for next Wednesday — a tactic that Democrats hope will allow them to pass the reconciliation bill before the August recess. Yet, issues reportedly linger in terms of funding mechanisms and spending priorities. Further, the Democrats’ maneuver could easily fall apart and leave them with nothing — no reconciliation bill and no bipartisan infrastructure deal — ahead of the August Senate recess.

Given the political risks to Democrats associated with this $3.5 trillion proposal — risks with both the bill’s passage and failure — I urge the leaders in my party to reconsider their next steps on this proposal, which could very well put them in the minority in Congress in 2022. 

Douglas E. Schoen is a political consultant who served as an advisor to President Clinton and to the 2020 presidential campaign of Michael Bloomberg. His new book is “The End of Democracy? Russia and China on the Rise and America in Retreat.”

Tags american jobs plan American Rescue Plan Act Bill Clinton Democratic Party Hillary Clinton Joe Biden Joe Biden Joe Manchin Joe Manchin Kyrsten Sinema Michael Bloomberg Reconciliation

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