Resurrected budget package no slam dunk as negotiations heat up

Murray, D-Wash., and Sen. Tim Kaine, D-Va., have drafted a scaled-back child care proposal estimated to cost $150 billion to $200 billion, but Manchin’s insistence on permanency hurts that push. That’s because individual committees’ pieces can’t increase deficits beyond the 10-year budget window under the Byrd rule, and the HELP committee doesn’t have offsets available to keep that from happening.

Another provision, estimated at $209 billion to make permanent, would increase Medicaid funding for home and community-based care for the elderly and disabled as an alternative to institutional care. Since that proposal is under the Finance Committee’s jurisdiction, it would likely meet the Byrd test because of the “outyear” savings generated by the tax increases and prescription drug provisions, possibly giving it more life than the child care program.

In a May 24 memo to the Senate Democratic caucus, Bob Casey, D-Pa., wrote that without permanent home care funding “states will need to reverse or significantly scale back the service expansions and workforce improvements they have achieved” through aid provided in last year’s pandemic relief law. On Friday, HHS extended availability of those funds for an extra year, through March 2025.

Closing the health insurance coverage gap in states that did not expand Medicaid, expanding the child tax credit and raising the $10,000 cap on state and local tax deductions also are priorities for Democrats whose votes will be needed.

In the event Democrats can’t agree on a larger package, another option under discussion is to focus it solely on health care: combining the $300 billion in prescription drug savings with the $220 billion cost of making the health care insurance subsidies permanent.

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