# U.S. Senate Democrats unveil details of $3.5 trln follow-up bill
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-08-09
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Democrats Unveil $3.5 Trillion Social Spending Bill Details
Meta Description: Democrats in the U.S. Senate reveal details of a bill including tax incentives for 'clean' manufacturing, free community college, and pathway to
URL: https://financedigest.com/u-s-senate-democrats-unveil-details-of-3-5-trln-follow-up-billhtml

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By Richard Cowan

WASHINGTON (Reuters) -Democrats in the U.S. Senate on Monday released some details of the $3.5 trillion bill addressing social spending and immigration that they aim to [push](https://www.financedigest.com/energy-bill-support-pushes-uk-budget-deficit-to-february-record.html "Energy bill support pushes UK budget deficit to February record") through after passing the bipartisan $1 trillion infrastructure bill.

The first details of the larger bill — a key goal for progressive Democrats — showed that it would provide tax [incentives for “clean”](https://www.financedigest.com/incentive-fm-group-strengthenswindow-cleaning-portfolio-with-acquisition.html "INCENTIVE FM GROUP STRENGTHENSWINDOW CLEANING PORTFOLIO WITH ACQUISITION") manufacturing, make community college free for two years and provide a pathway to citizenship for millions of immigrant workers.

The first bill https://www.reuters.com/world/us/whats-us-senates-bipartisan-1-trillion-infrastructure-bill-2021-08-03, which sits atop Democratic President Joe Biden’s domestic agenda and includes $550 billion in new spending on roads, bridges and [internet access](https://www.financedigest.com/51-of-brits-support-teresa-may-and-would-grant-access-to-their-personal-communication-and-internet-browsing-history-as-part-of-the-snoopers-charter.html "51%* of Brits support Teresa May and would grant access to their personal communication and internet browsing history as part of the Snooper’s Charter "), cleared an important procedural hurdle late on Sunday when the Senate voted 69-28 in support of the provisions contained in the 2,702-page plan.

The Senate also voted 68-29 to limit further debate to a maximum of 30 hours, [setting up a potential vote on passage early on Tuesday on the package](https://www.financedigest.com/pharmaceutical-packaging-equipment-market-set-to-surge-significantly-during-forecast-period-tmr-insights.html "Pharmaceutical Packaging Equipment Market Set to Surge Significantly During Forecast Period – TMR Insights"), the result of months of bipartisan negotiations.

The massive spending bill is [popular among many lawmakers in both parties because of the federal dollars it would deliver to their home](https://www.financedigest.com/august-the-most-popular-month-to-start-a-holiday-home-search-reveals-portal.html "AUGUST THE MOST POPULAR MONTH TO START A HOLIDAY HOME SEARCH REVEALS PORTAL") states. Polls also show that Americans at large are supportive of it.

But the moment of bipartisanship that produced it was likely to be fleeting as Democrats prepare to [turn their attention next](https://www.financedigest.com/setsquared-helps-turn-basingstoke-into-the-souths-next-tech-and-innovation-hub.html "SETsquared helps turn Basingstoke into the South’s next tech and innovation hub") to the larger bill, which they aim to pass over Republican objections using a parliamentary maneuver called “budget reconciliation https://www.reuters.com/world/us/us-senates-reconciliation-process-its-not-way-it-sounds-2021-06-16.

Democrats are aiming to debate and pass this nonbinding resolution in [coming days](https://www.financedigest.com/have-multi-asset-funds-had-their-day-or-is-their-best-yet-to-come-new-whitepaper-from-camradata-explores.html "Have multi-asset funds had their day or is their best yet to come? New whitepaper from CAMRADATA explores"), which would serve as a framework for more detailed, binding legislation later this year. Republicans have strenuously objected to the size and cost of the follow-up package.

PARLIAMENTARIAN’S POWER

The ambitious goals of this [budget plan](https://www.financedigest.com/about-mgo-llp.html "Fast growing Accounting Firm Relies on Budget Maestro for Strategic Financial Planning") will be reviewed by the Senate parliamentarian, who has the power to strip out provisions found to be at odds with Senate rules. The full Senate, however, could vote to over-rule such decisions.

In a letter to senators, Senate Majority Leader Chuck Schumer said the [budget plan](https://www.financedigest.com/planning-your-garden-space-on-a-budget.html "Planning your Garden Space on a Budget") is aimed at “restoring the middle class” by making education, child care and housing more affordable.

A separate Democratic memo says the $3.5 trillion costs would be fully paid for by a combination of tax increases, savings in federal health care programs and projected [long-term economic](https://www.financedigest.com/uae-plans-long-term-economic-ties-with-israel-despite-political-strains.html "UAE plans long-term economic ties with Israel despite political strains") growth.

The latter claim is debated by many economists who often disagree over the accuracy of the [economic impact](https://www.financedigest.com/dollar-skids-after-soft-u-s-economic-data-impact-of-opec-cuts-fades.html "Dollar skids after soft U.S. economic data; impact of OPEC+ cuts fades") stemming from new policies enacted by Washington.

There would be no tax [increases for those making under $400,000 a year](https://www.financedigest.com/food-fiber-market-to-exhibit-increased-demand-in-the-coming-years.html "Food Fiber Market to Exhibit Increased Demand in the Coming Years"), Democrats said.

The [tax increases](https://www.financedigest.com/landlord-tax-changes-predicted-to-increase-uk-rent.html "Landlord Tax Changes Predicted to Increase UK Rent"), which already have been previewed by the Biden administration and Senate Democrats, would hit high-income earners and would be coupled with beefed-up IRS tax enforcement. The measure also calls for a [“carbon polluter](https://www.financedigest.com/ecb-can-cut-carbon-footprint-by-shedding-bonds-of-biggest-polluters.html "ECB can cut carbon footprint by shedding bonds of biggest polluters") import fee.

The plan also called for extending a new, expanded child [tax credit](https://www.financedigest.com/eu-us-working-on-deal-to-make-ev-minerals-eligible-for-tax-credits-eu-official.html "EU, US working on deal to make EV minerals eligible for tax credits -EU official") that progressives wanted to make permanent. And it would [provide “relief”](https://www.financedigest.com/recovery-bus-provides-cool-relief-for-s-koreas-covid-19-testers.html "‘Recovery bus’ provides cool relief for S.Korea’s COVID-19 testers") to tax filers bumping up against a cap on a state and local tax deduction tightened by a 2017 Republican-backed tax law.

Still unclear is whether Democrats will attach a debt limit increase to the reconciliation bill that will be developed in [coming weeks or will seek another way](https://www.financedigest.com/analysis-watch-out-risk-assets-the-rout-in-bonds-is-coming-your-way.html "Analysis-Watch out risk assets, the rout in bonds is coming your way") of raising Washington’s nearly exhausted borrowing authority.

Treasury Secretary Janet Yellen on Monday again urged Congress to take quick action in a bipartisan way.

WEEKEND WORK

The Senate worked for a second straight weekend to advance the infrastructure [bill aimed](https://www.financedigest.com/eus-planned-reforms-aim-to-better-protect-power-bills-from-market-swings.html "EU’s planned reforms aim to better protect power bills from market swings") at repairing, expanding and improving roads, bridges, waterworks and schools, while also expanding high-speed internet service in underserved areas.

During debate on Sunday, Democratic Senator Catherine Cortez Masto of Nevada noted the boost for her state’s mining industry, [saying new money would strengthen “a critical mineral and battery supply](https://www.financedigest.com/ceraweek-europe-gas-supplies-to-stay-tight-2-more-winters-equinor-ceo-says.html "CERAWEEK-Europe gas supplies to stay tight 2 more winters, Equinor CEO says") chain that supplies key components of cellphones and laptops, electric vehicles, solar panels and more.

The Senate had been scheduled to [begin a four-week summer recess](https://www.financedigest.com/oil-climbs-almost-3-as-recession-fears-begin-to-fade.html "Oil climbs almost 3% as recession fears begin to fade"), but instead found itself in session on both Saturday and Sunday, which saw little more than occasional speeches before the procedural votes.

Even with passage of the bill this week, senators will still not be able to go [back to their home states or jump onto foreign trips popular during long recesses](https://www.financedigest.com/oil-prices-edge-down-recession-fears-back-in-focus.html "Oil prices edge down, recession fears back in focus").

That is because Schumer aims to [launch immediately into debate of the budget framework providing the outlines for the $3.5 trillion “human](https://www.financedigest.com/elearningclasses-com-an-online-academy-powered-by-artificial-intelligence-human-instructors-launched.html "eLearningClasses.com An Online Academy Powered by Artificial Intelligence & Human Instructors Launched") infrastructure” bill that Democrats want to begin advancing in September.

Passing any major legislation is difficult given the 50-50 split between Democrats and Republicans in the Senate, with Democrats claiming a majority thanks to [Vice President](https://www.financedigest.com/soldo-welcomes-darren-upson-as-vice-president-of-small-business-europe.html "Soldo Welcomes Darren Upson As Vice President Of Small Business Europe") Kamala Harris’ tie-breaking vote. Democrats hold a razor-thin majority in the House of Representatives.

If the $1 trillion bill is approved by the Senate, as expected, the House would still have to debate and vote on it, sometime after it [returns in late September from its summer](https://www.financedigest.com/mallorca-emerges-as-this-years-summer-hotspot-as-british-buyers-return-to-spain-in-their-masses.html "MALLORCA EMERGES AS THIS YEAR’S SUMMER HOTSPOT AS BRITISH BUYERS RETURN TO SPAIN IN THEIR MASSES") break.

(Reporting by Richard Cowan; Editing by Scott Malone, Jonathan Oatis and Alistair Bell)


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