Dems say they’re ‘very, very close’ to tying $1.1 trillion stimulus package to spending cuts
Democrats have signaled that they will likely tie the $1 trillion federal stimulus package passed in early July to deep spending cuts that they hope to get through Congress before Christmas.
The proposal, which would take $1,400 off the price of a gallon of gas and cut unemployment benefits, was the first of several items on the package to be included in a continuing resolution that funds the government until Jan. 15.
Democrats have already made several promises to cut spending in the spending bill, including spending cuts for Social Security and Medicare.
But Democrats have been hesitant to tie the legislation to a sweeping tax cut, which could push Republicans into an awkward position if they were to try to pass their own package.
Aides say they expect Democrats will use the deal to offer a new set of tax cuts that could help offset some of the spending cuts.
“The deal provides a way for Democrats to take the $500 billion back out of the stimulus and put it into tax relief,” said House Minority Leader Nancy Pelosi, D-Calif.
“This is a great way to put $1 billion back into the economy and not having to worry about the stimulus.”
Democrats are hoping to win some of those tax cuts and a larger deal on spending cuts in the final spending bill that’s set to be voted on Monday.
Republicans have indicated they will reject the deal if Democrats try to add spending cuts to the final bill.
“If you’re going to do tax reform, you can’t just add tax cuts,” Senate Minority Leader Mitch McConnell, R-Ky., told reporters on Thursday.
“You have to have spending cuts, and you have to do some tax reform.”
Democrats are also hoping to tie spending cuts and spending cuts with a deal on a tax hike on wealthy Americans, something that could allow them to avoid the tax increases Republicans have proposed.
Republicans are already trying to make the tax hike issue a wedge issue with the Senate Majority Leader Mitch McConnel, R