By Kristina Peterson 

WASHINGTON -- Senior Democrats said they hoped to pass budget resolutions by the end of July, teeing up for late summer and early fall a package that could determine the scope of President Biden's legislative ambitions on infrastructure and social programs.

At the same time, Congress will likely have to juggle key spending bills and legislation to raise the country's borrowing limit, aligning must-pass legislation with a period of high-stakes internal negotiations.

In an interview this week, House Budget Committee Chairman John Yarmuth (D., Ky.) said he was working on a fiscal year 2022 budget resolution that he hoped to send to the House floor for a vote by the end of July. Senate Budget Committee Chairman Bernie Sanders (I., Vt.) said he hoped "we can get it done by then" as well.

Although the budget blueprint is typically a largely symbolic document, it holds unusual significance this year. It is the necessary first step if Democrats want to pass all or part of Mr. Biden's infrastructure and anti-poverty proposals without GOP support.

Senate Democrats said this week they were moving forward with a process tied to the budget known as reconciliation that allows them to pass legislation with just a simple majority, rather than the 60 votes most bills require.

Mr. Yarmuth said Thursday that House Democrats were preparing a budget that would enable them to pass Mr. Biden's full infrastructure and anti-poverty proposals along party lines, but could make quick adjustments if a bipartisan deal on infrastructure is reached.

"We're going to act as if it's all done by reconciliation and hope that somewhere along the line there's a bipartisan agreement," he said.

Mr. Biden has said he hopes to reach a bipartisan deal on infrastructure, but he hasn't succeeded so far. Mr. Biden ended talks this week with Republican negotiator Sen. Shelley Moore Capito (R., W.Va.) after they hit an impasse over spending levels and how to pay for the package.

Meanwhile, a bipartisan group of 10 senators announced an agreement Thursday evening to spend $974 billion on infrastructure over five years, of which $579 billion would be above expected future federal spending.

The group, however, hasn't made public how it proposes to pay for its infrastructure package, long the biggest sticking point over years of discussions on the issue. The White House said it appreciated the work and would seek more details on the plan and how it would be paid for.

If no agreement can be reached across the aisle, then Democrats will seek to pass a sweeping package along party lines. But even without Republicans, Democrats could still be thwarted by several internal challenges.

First, in order to unlock the special shortcuts offered by the budget process, they will need to agree on a budget. Mr. Yarmuth said he expected the budget's overall amount of defense spending would be close to the figure recommended by Mr. Biden in his budget request, $753 billion, a 1.7% increase from the last fiscal year, which some liberal Democrats view as too high. Mr. Biden proposed a much larger 16% increase in non-military spending to $769 billion.

"I expect some agonizing over it," Mr. Yarmuth said of the defense spending. "It's going to be hard for a lot of members to swallow that," but he said he hoped the big increase in non-defense spending would ease their concerns. "It allows us to meet so many of our priorities that I think most people in the final analysis will say it's worth voting for a resolution with that number in it."

Democratic Reps. Mark Pocan of Wisconsin and Barbara Lee of California, the co-chairs of the Defense Spending Reduction Caucus, said in a statement after Mr. Biden released his budget last month that the increase in defense spending was misguided.

"Congress must act this year to cut what we spend on war and refocus on the most pressing challenges confronting Americans and the world," the lawmakers said.

Democrats are operating with razor-thin majorities in both chambers. In the House, Democrats can lose no more than three of their own ranks on legislation opposed by all Republicans. And in the 50-50 Senate, Democrats can afford no defections on simple majority votes.

If both chambers are able to pass an identical budget resolution before the August recess, lawmakers are likely to be grappling with a sweeping legislative package in September, when they are also running up against deadlines to reauthorize a highway bill and the annual spending bills before the government's current funding expires Oct. 1.

Congress this year must also tackle the federal borrowing limit, which has been suspended since December 2019 but is set to return Aug. 1. After that, the Treasury Department won't be able to tap bond markets to raise new cash to finance government operations unless Congress either raises or suspends the borrowing limit again.

The agency can take steps to conserve cash, but Treasury Secretary Janet Yellen has warned those extraordinary measures might not last as long as they have in the past -- typically three or four months -- because of the uncertainty around government spending and receipts during the pandemic.

Both Messrs. Yarmuth and Sanders said Democrats were considering whether to try to raise the debt limit with or without the support of Republicans, who have often demanded spending cuts in exchange for their approval on increasing the borrowing limit. Democrats could approve an increase in the debt limit through reconciliation, though it is unclear if they will attempt to do so before the Aug. 1 deadline.

Mr. Yarmuth said his hope would be to avoid brinkmanship that could rattle the markets.

"We have to have a very honest discussion about the debt limit and many -- not all, but many -- of my Democratic colleagues do not believe that debt matters anymore," said Sen. John Kennedy (R., La.), a member of the Senate Budget Committee. "I would like to hear their explanation for that."

--Andrew Duehren contributed to this article.

Write to Kristina Peterson at


(END) Dow Jones Newswires

June 11, 2021 14:50 ET (18:50 GMT)

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