Recreating the "Widaehan Sahoe"... US Democratic Party Unveils 4000 Trillion Won Budget Resolution

Largest Since 1964's 'Great Society' Development Plan
Republican Opposition to Democratic Party's Sole Passage Policy
Includes $2.25 Trillion Job Plan and Expansion of Elderly Medical Insurance
Government Debt Ceiling Adjustment Bill Excluded... Concerns Over Default Crisis

Senator Bernie Sanders (left), Senate Majority Leader Chuck Schumer (right) [Image source=AP Yonhap News]

[Asia Economy Reporter Kim Suhwan] The Biden administration and the Democratic Party in the United States appear set to push forward a $3.5 trillion (approximately 4,000 trillion KRW) infrastructure development plan on their own, marking the largest scale since former President Lyndon B. Johnson's massive development initiative, "The Great Society," in 1964. Concerns are rising that conflicts between the Democrats and the Republicans?who worry about the expansion of the national debt?will intensify over the infrastructure budget.

Largest Scale Since ‘The Great Society’

According to reports from The New York Times (NYT), CNBC, NPR, and others on the 9th (local time), Senate Majority Leader Chuck Schumer of the Democratic Party unveiled a budget resolution necessary for processing the $3.5 trillion budget bill. The resolution is a kind of guideline summarizing the overall budget size, items, and processing deadlines before the actual passage of the budget bill.

[Image source=Reuters Yonhap News]

According to this, in addition to the $1 trillion infrastructure development budget agreed upon with bipartisan Republican lawmakers, the Democrats plan to push a separate $3.5 trillion budget bill on their own.

This scale surpasses the past "Great Society" plan by former President Johnson, which focused on poverty eradication, middle-class support, and expansion of education and healthcare. At that time, the U.S. government invested a budget amounting to $3 trillion (approximately 3440 trillion KRW).

The budget that the Democrats intend to pass alone includes the American Jobs Plan ($2.25 trillion) and the American Families Plan ($1.7 trillion), both proposed by President Biden after his inauguration.

It also contains expansions to Medicare for seniors, support for educational programs such as universal preschool education and free community college, immigration law reforms easing citizenship requirements for immigrants, and measures to reduce drug prices.

Additionally, it includes climate change response policies such as the Civilian Climate Corps (CCC), a project employing thousands of young people to work on climate change infrastructure development.

This budget bill is expected to be processed through "budget reconciliation," which is not subject to the Republican filibuster (a legal obstruction of legislative proceedings). Leader Schumer said, "This is to restore the American middle class and enable more citizens to enter the middle class."

Earlier, both parties agreed to process a bipartisan $1 trillion infrastructure development budget bill, with a Senate vote scheduled for the 10th. If the $1 trillion agreed budget passes the Senate, Leader Schumer plans to separately process the resolution he introduced during the week.

Mitch McConnell, Republican Senate Majority Leader
Photo by AP News

The Republican Party strongly opposed the Democrats' plan to pass the budget bill alone. Senate Minority Leader Mitch McConnell criticized, "The Democrats are trying to spend trillions of dollars on their own without a single Republican vote," calling it "reckless budget waste."

Government Debt Ceiling Adjustment Bill Excluded

The government debt ceiling adjustment bill was excluded from the infrastructure budget bill that the Democrats plan to pass alone. With the debt ceiling suspension ending this month and no agreement reached on the adjustment bill, concerns are growing that a government default (debt nonpayment) crisis could become a reality.

Janet Yellen, Secretary of the Treasury
Photo by Reuters Yonhap News

The current U.S. government debt ceiling is set at about $22 trillion. According to the Treasury Department, as of the 31st of last month, the total government debt reached $28.5 trillion. Since the government debt has already exceeded the ceiling, the government can no longer issue additional bonds.

Treasury Secretary Janet Yellen strongly urged Congress to raise the debt ceiling, stating, "If bipartisan agreement is not reached, the U.S. economy and its people will suffer irreversible damage."

The Republican Party has stated that it will oppose raising the debt ceiling if the Democrats proceed with the budget bill on their own.

The NYT reported, "A government default could trigger a global economic crisis," but also noted that "raising the debt ceiling (which requires Republican support) is expected to come with political costs."

This content was produced with the assistance of AI translation services.