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Financial Planning > Tax Planning

Biden Tax, Spending Bill Pushed to 2022

By Laura Litvan and Erik Wasson

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What You Need to Know

  • Senate Democrats are abandoning efforts to pass President Joe Biden’s $2 trillion economic agenda this year amid intraparty discord.

Senate Democrats are abandoning efforts to pass President Joe Biden’s $2 trillion economic agenda this year, delivering a political blow to the White House, which has failed to rally the fractious party around its signature legislation, according to a person familiar with the decision.

The delay risks slowing momentum and solidifying the intra-party divide on the legislation, which many Democrats consider key heading into the 2022 midterm elections.

A spokesman for Senate Majority Leader Chuck Schumer didn’t immediately respond to requests for comment.

“Every day that we delay is a bad day for the American people,” Senate Budget Chair Bernie Sanders said. The Vermont independent vowed any changes to the bill would be to make it more in line with progressive priorities.

Progressives and moderates have disagreed publicly on the size and scope of the package for months, although House Democrats were able to pass its version of the bill last month. But talks this week between Biden and West Virginia Senator Joe Manchin, a key holdout, have gone poorly, people familiar with the negotiations have said.

Most of the benefits in the bill, which has no Republican support, would have taken months or even years to become reality. But expanded child tax credit payments that expired Wednesday are at risk of lapsing. The Internal Revenue Service had sought enactment of the bill before Dec. 28 to ensure Jan. 15 payments go out on time.

“The delay matters,” Ohio Democratic Senator Sherrod Brown said. “If we do it in the first weeks of January it makes it a little more challenging for the secretary of the Treasury to get the checks out by Jan. 15.”

“But it’s going to all happen,” he said.

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