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Senate Democrats reach $3.5tn deal on spending

Senate Democrats have agreed to press ahead with legislation worth $3.5tn in new government spending without Republican support in a bid to enact Joe Biden’s economic agenda before next year’s midterm elections.

The intraparty deal was sealed on Wednesday night after negotiations that involved both the most progressive lawmakers, including Bernie Sanders of Vermont, and moderate Democrats such as Mark Warner of Virginia. White House officials including Brian Deese, director of the National Economic Council, also participated in the talks.

The agreement could pave the way for Biden to secure congressional support for many of his multitrillion-dollar spending agenda that have faced Republican resistance, such as new investments in childcare and education, measures to combat climate change and an expansion of some government healthcare benefits for the elderly.

However, the deal on the $3.5tn figure only marked the first step in the congressional process known as budget reconciliation, which allows some fiscal measures to pass the 100-member upper chamber of Congress with 51 votes, rather than the supermajority of 60 votes required for ordinary legislation.

The Senate is evenly split between Democrats and Republicans, with Kamala Harris, US vice-president, casting the tiebreaking vote when needed.

Last month, Biden struck a deal with a group of moderate Democratic and Republican senators to fund $1.2tn in investments in physical infrastructure. But the deal represented only part of the US president’s economic plans, which the opposition has been willing to fathom.

The bipartisan agreement is being turned into legislative text and is moving on a separate track, while the rest of Biden’s plans are being considered only by the Democrats.

But if the infrastructure deal backed by some Republicans were to fall apart or fail to advance in Congress, its provisions could be added to the legislation that Democrats are considering pursuing alone.

The deal reached among Democrats on Wednesday only set a top-line figure for spending. Many of the details, including how the $3.5tn in outlays could be paid for with tax increases, will have to be hammered out and voted on at a later stage.

This process could jeopardise the deal or reduce its final price tag, and will require extremely delicate negotiations between different factions of the Democratic party.

But lawmakers involved in the talks have shown a willingness to compromise in order to achieve legislative progress: Sanders, who chairs the Senate budget committee, was hoping for $6tn in new spending, but settled for a figure below that level.

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