Senate Democrats released a fiscal 2022 budget resolution on Monday that calls for $3.5 trillion in new spending, including as much as $135 billion for agriculture and child nutrition programs, with the total cost funded at least in part by a border carbon tariff and tax increases on capital gains and high-earning individuals.

The 92-page resolution, which provides minimal detail as to how the money would be spent, is the first step toward moving a partisan budget reconciliation measure that Democrats and President Joe Biden want to use to carry out their climate policy and enact domestic spending priorities.

Biden has proposed to start taxing capital gains at death, which would create a new intergenerational transfer tax and nullify the benefit of stepped-up basis. But there is no detail on that or any other tax and spending proposals in the resolution; budget resolutions provide general instructions to House and Senate committees but no detail on how the money would be spent or how revenue would be raised.

According to a memorandum on the resolution for Democratic senators, the revenue sources would include “tax fairness for high-income individuals” as well as a new tariff that would be tied to the carbon footprint of imported products. Democrats also intend to raise or eliminate the $10,000 annual limit enacted in 2017 on deduction of state and local taxes. 

The resolution also signals that Democrats hope to use the reconciliation package to enact immigration reform, likely including a path to legal status for farmworkers, although it’s far from clear that the Senate parliamentarian would allow the inclusion of immigration provisions.

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The Senate Agriculture Committee, whose oversight includes child nutrition programs as well as agricultural policy, would be assigned under the resolution to spend up to $135 billion. According to the Senate memorandum, that funding would be used for "conservation programs, drought and forestry programs to help reduce carbon emissions and prevent wildfires;" "rural development and rural co-op clean energy investments;" agricultural research; the Civilian Climate Corps; child nutrition; and “debt relief.”

Committee Chairwoman Debbie Stabenow, D-Mich., was seeking $50 billion for conservation programs in order to help farmers address climate change.

The House Agriculture Committee, which doesn’t have authority over child nutrition programs, is assigned a lower amount than Senate Ag, $89.1 billion. In the House, the Education and Labor Committee has oversight for child nutrition policy, including the school lunch program.

In a statement to Agri-Pulse, Stabenow said, "The Build Back Better Budget is focused on keeping historic economic growth going. It will lower costs for Americans, cut taxes for American families, and tackle the climate crisis while creating millions of jobs - and this will be paid for by the wealthy paying their fair share."

The budget reconciliation process would allow Democrats to move the measure through the Senate with no Republican support provided all 50 Democrats vote for it. But Sen. Kyrsten Sinema, D-Ariz., has indicated reservations with the $3.5 trillion price tag, and Sen. Joe Manchin, D-W.Va., has said he is concerned about the impact on the economy and on fossil fuels. Democrats also have a slim, 220-212 majority in the House, and some moderates have signaled they have concerns about the size of the package and its potential revenue sources

"At its core, this legislation is about restoring the middle class in the 21st Century and giving more Americans the opportunity to get there," Senate Majority Leader Charles Schumer, D-N.Y., said in a letter to Senate colleagues

"By making education, health care, child care, and housing more affordable, we can give tens of millions of families a leg up. By making further investments in infrastructure, we can create tens of thousands of good-paying jobs. And by finally tackling climate change, we can spare our country and our planet the most devastating effects of global warming."

Responding on the Senate floor, Senate Minority Leader Mitch McConnell, R-Ky., said that Democrats are "trying to tax and spend our country into oblivion. They have handed the keys to domestic policymaking to Sen. (Bernie) Sanders and some socialist House members." Sanders, I-Vt., chairs the Senate Budget Committee. 

McConnell ruled out assisting Democrats in passing an increase to the federal debt ceiling. "If they don't want Republicans' input, they don't need our help," he said. 

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