Manchin concerned about “grave consequences” of U.S. Senate’s $3.5 trln spending plan

By Makini Brice and Susan Cornwell

WASHINGTON (Reuters) -U.S. Democratic Senator Joe Manchin on Wednesday said he had serious concerns about Senate Democrats’ planned $3.5 trillion spending plan, potentially gumming up efforts to move ahead with President Joe Biden’s top priorities.

The Democrat-led Senate approved a blueprint for the plan early on Wednesday morning in a 50-49 vote along party lines, after lawmakers sparred over the need for huge spending to fight climate change and poverty.

Now Biden’s Democratic Party embarks on weeks of debates about priorities including universal preschool, affordable housing and climate-friendly technologies, with progressives like Representative Alexandria Ocasio-Cortez seeking robust action on climate change and moderates including Senator Kyrsten Sinema expressing concern about the bill’s price tag.

Manchin, a moderate who often acts as a bridge between his party and the Republicans, said in a statement that he was worried about potentially “grave consequences” for the nation’s debt as well as the country’s ability to respond to other potential crises.

The vote followed about 14-1/2 hours of debate that started right after the Senate on Tuesday passed a $1 trillion infrastructure bill in a bipartisan 69-30 vote, proposing to make the nation’s biggest investment in decades in roads, bridges, airports and waterways.

“It’s been quite a night. We still have a ways to go, but we’ve taken a giant step forward to transforming America. This is the most significant piece of legislation that’s been considered in decades,” Democratic Senate Majority Leader Chuck Schumer told reporters after the budget resolution passed.

The bills have been a top priority for Biden, who has sought to enact sweeping changes during a time when Democrats hold fear loss of legislative control in the looming 2022 elections.

The Democrats plan to push the package through over the next few months, using a process called “budget reconciliation,” which allows them to pass legislation with a simple majority vote.

House Majority Leader Steny Hoyer, a Democrat, said the House would return from its summer break early on Aug. 23 to consider the budget resolution.

Republicans have railed against the $3.5 trillion spending plan. Senate Republican leader Mitch McConnell, who voted for the $1 trillion infrastructure bill, called the larger proposal “radical.”

Energy Secretary Jennifer Granholm told CNN on Wednesday morning that the Biden administration will push for both pieces of legislation and leave Congress to decide the order in which they are considered.

Granholm added that “there’s a lot to like” in the spending bill for Manchin, Sinema and other moderates, saying the hefty cost would be covered with taxes on people earning more than $400,000 a year and on corporations.

DEBT CEILING LOOMS

Dozens of Republican senators also signed a pledge not to vote to raise the nation’s borrowing capability when it is exhausted in the autumn to try to curtail Democrats’ spending plans.

“They (Democrats) shouldn’t be expecting Republicans to raise the debt ceiling to accommodate their deficit spending,” Senator Ron Johnson, a Republican who circulated the pledge, told the Wall Street Journal.

Failure to increase or suspend the statutory debt limit – now at $28.5 trillion – could trigger a federal government shutdown or a debt default.

Treasury Secretary Janet Yellen this week urged Congress to raise the debt limit in a bipartisan vote. On Tuesday, Yellen also endorsed moving forward with the larger spending package, saying the $1 trillion infrastructure plan should have a sequel.

UNCERTAIN FUTURE

On Tuesday, Biden lauded the 19 Republicans who voted for the bipartisan $1 trillion infrastructure measure. “Here on this bill, we’ve proven that we can still come together to do big things – important things – for the American people,” he said.

House Speaker Nancy Pelosi has said her chamber will not vote on the infrastructure bill or the larger spending package until both are delivered, which will require the Democratic leadership to hold its narrow majorities in Congress together to get the legislation to Biden’s desk.

Leading House progressive Democrats said on Tuesday that most progressives would not vote for the bipartisan infrastructure bill until the Senate also passes a “robust” second spending measure. That was in contrast to more moderate House Democrats, who want a quick vote on the infrastructure bill.

Polls show the drive to upgrade America’s infrastructure, hammered out over months by senators from both parties, is broadly popular with the public. The bill includes $550 billion in new spending, as well as $450 billion in previously approved infrastructure investment.

Democrats will begin crafting the reconciliation package for a vote on passage after they return from their summer break in September.

Following the budget resolution vote, Schumer filed a cloture petition on a compromise voting bill for the chamber to vote on upon its return in September. A previous attempt to overhaul electoral laws with sweeping legislation known as the “For the People Act” was blocked in June.

(Reporting by Susan Cornwell and Makini Brice, additional reporting by David Morgan, Susan Heavey and Lisa Lambert; Editing by Scott Malone, Shri Navaratnam, Kim Coghill and Hugh Lawson)

Biden sees U.S. child tax credit as ‘giant step’ to counter poverty

By Andrea Shalal and Trevor Hunnicutt

WASHINGTON (Reuters) -Some 35 million American families have started receiving their first monthly payout from the U.S. government in an expanded income-support program that President Joe Biden said on Thursday could help end child poverty.

Under the Child Tax Credit program that was broadened under Biden’s COVID-19 stimulus, eligible families collect an initial monthly payment of up to $300 for each child under six years old and up to $250 for each older child.

Payouts made to families, covering nearly 60 million eligible children, totaled about $15 billion for July. The payments are automatic for many U.S. taxpayers, while others need to sign up.

Biden wants to extend expanded, monthly benefits for years to come as part of a $3.5 trillion spending plan being considered by Senate Democrats, who expect strong Republican opposition to the full bill.

“It’s our effort to make another giant step toward ending child poverty in America,” Biden said in a speech. “This can be life changing for so many families.”

The Child Tax Credit is being likened to a universal basic income for children, although it has income limits. It is expected to help people meet monthly expenses from rent to food and daycare.

The Center on Poverty and Social Policy at Columbia University estimates the expansion can reduce the U.S. child poverty rate by up to 45%.

Critics say the expanded credit is expensive and may discourage people from working. Some experts say it may not reach some of the poorest Americans who are not in the tax system.

The Democrat-backed $1.9 trillion COVID-19 legislation known as the American Rescue Plan enacted in March increased how much is paid to families under the program.

The law made half of the tax credit for the 2021 tax year payable in advance by the Internal Revenue Service in monthly installments from July through December this year.

Biden proposed making the monthly advance payments permanent and maintaining expanded benefits through 2025 at least.

(Editing by Sonya Hepinstall and Edmund Blair)