On Monday, August 9, the Senate released the framework for the Fiscal Year 2022 Budget Resolution Agreement, and subsequently passed the resolution in a 50-49 partisan vote on August 10. The resolution now goes to the House, as both chambers of Congress must pass the final reconciliation bill. The framework totals $3.5 trillion in Budget Reconciliation instructions. The instructions aim for “every major program proposed by President Biden to receive robust funding.” While details on the Budget Reconciliation are slim, the framework provides hints at what is to come.
The budget resolution instructions for the Senate Finance Committee nominally require a reduction in the federal deficit by $1 billion over ten years. Among other things, the Finance Committee has been instructed to make investment, revenue and offset decisions consistent with the below policy recommendations:
- Child Tax Credit/EITC/CDCTC extension
- Pro-worker incentives and worker support
- SALT cap relief
- Clean energy, manufacturing, and transportation tax incentives
- Other investments within the jurisdiction of the Finance Committee
Due to a lack of “budget certainty for all of the expected policies prior to locking in the reconciliation instruction to the Finance Committee, the Budget Resolution will not require a specific level of revenue, outlay, or deficit amount on its reconciliation instruction.” However, the Senate recommended several very general offsets in its instructions to the Finance Committee, including:
- Corporate and international tax reform
- Tax fairness for high-income individuals
- IRS enforcement
- Health care savings
- Carbon Polluter Import Fee
Other highlights of the Budget Reconciliation Framework include a resolution prohibiting new taxes on families earning less than $400,000 per year, and the authority to adjust budget levels upon enactment of the infrastructure package.
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