On August 9, 2021, Senate Democrats released the text of a budget resolution establishing President Biden's $3.5 trillion economic agenda. The resolution was passed on August 11, 2021 along party lines.
The budget resolution allows about half of the $3.5 trillion to be debt-financed, which would require Congress to raise the federal debt limit by the end of the government's fiscal year on September 30.
The resolution gives the Senate Finance Committee broad authority to craft legislation that would increase taxes on corporations and on households earning more than $400,000 per year, and instructs Congress to reduce the tax burden on other taxpayers. The resolution directs the Committee to generate additional revenue from health care savings and fees on carbon polluters.
Notably, the resolution directs lawmakers to expand the deduction for state and local taxes (SALT). Several House Democrats have threatened to withhold their support for President Biden's agenda unless the SALT tax break is expanded.
It remains to be seen whether the resolution will lead to a viable legislative package. Both Joe Manchin of West Virginia and Kyrsten Sinema of Arizona have expressed concern about the cost of Biden's agenda, and Senate Republicans opposed the resolution.
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