Senate Democrats to Push for $3.5tn Package After Bipartisan Win
11 Aug 2021 · 3rd Party Analysis
- Democratic lawmakers prepare to pass a $3.5tn budget blueprint on Wednesday
- The package, to pass with no GOP support, will be focused on social programs and climate measures
Democrats have set their gaze on passing a partisan bill with the hefty price tag of $3.5tn just moments after they passed a sweeping $1tn bipartisan legislation. Lawmakers in the Senate on Tuesday approved a $1tn infrastructure package with all 50 Democrats, joined by 19 Republicans, voting in favor of the budget. President Joe Biden took to Twitter to celebrate the historical achievement. “Big news, folks: The Bipartisan Infrastructure Deal has officially passed the Senate,” Mr. Biden said. “I hope Congress will send it to my desk as soon as possible so we can continue our work of building back better,” he added.
The stimulus bill intended to provide funding for bridges, transit, roads, and broadband is now being moved to the House of Representatives where it faces a rocky path. Progressive Democrats have yoked its fate to the passage of a broader $3.5tn budget directed toward anti-poverty and climate efforts.
The separate package of Democratic priorities would need to be passed through a process called reconciliation as it will not receive any support from Republicans. The GOP has rejected the additional bill, arguing it will further deepen inflation, while the proposed tax hikes would hurt the US economy. To tackle this hurdle, Democrats would need a simple majority, while vice-president Kamala Harris casts a tie-breaking vote in the 50-50 upper house.
A Flat Opening for European Markets
The budget resolution expected to land for voting today provides the blueprint of the planned spending. It also includes specifics over a wide range of elements, including clean energy tax credits, expanding universal schooling to three and four-year-olds, expanding Medicare, among other priorities.
While the budget resolution on social programs and climate measures could potentially delay or even derail the $1tn infrastructure package, President Biden said on Tuesday he saw himself as a “congenital optimist”. “I think we will get enough Democrats to vote for it, and I think that the House will eventually put two bills on my desk,” he told reporters.
Meanwhile, investors hailed the passing of the sweeping $1tn bill as major indexes ground higher. Setting new record closing levels, the Dow Jones and the S&P500 added 0.46%, and 0.10%, respectively. The Nasdaq Composite slipped nearly half a percent as big tech stocks dragged down the tech-heavy index.
In economic news, the latest consumer price index (CPI) report is expected later today. The reading would provide key insights into how prices for consumer goods and services have changed for July. For the previous month, the indicator showed consumer price inflation spiked 5.4% on an annual basis, the highest in 13 years.
On the other side of the Atlantic, European markets today opened relatively flat as investors remain optimistic the eurozone economy would continue to expand. In quiet trading yesterday, the pan-continental Stoxx 600 pushed to a new all-time high, closing at 472.32.
Cryptocurrencies on Wednesday are moving slightly to the upside, continuing their positive performance for a third straight day. Bitcoin is currently gyrating around the $46,000 level, while ether is closing in on the $3,200 threshold.