Democrats in the US Senate yesterday took a major step toward the biggest expansion in decades of federal efforts to reduce poverty, care for the elderly and protect the environment, passing a $3.5 trillion budget framework that opens the way for Joe Biden’s economic agenda.

The 50-49 vote was along party lines, and marks America’s abrupt reversal from the tax-cutting philosophy of the Republican party when they controlled Washington.

It provides a path for enactment of a long list of cherished Democratic priorities – if the party’s fractious progressives and moderates can agree among themselves in the coming months.

Democrats are pitching tax cuts in the plan as the largest in history for the middle class, including an extension of the temporary pandemic child tax credit.

Part of the cost would be paid by rolling back the tax cuts for corporations and wealthy households that were brought in by Donald Trump.

The Democratic budget plan includes calls for universal pre-kindergarden childcare for three- and four-year-olds, paid maternity leave, two years of free community college education, and new dental, vision and hearing benefits for Medicare beneficiaries.

The resolution also calls for a series of measures to combat climate change.

Among them are a ‘polluter fee’ to be levied on imports depending on products’ greenhouse gas emissions, plans to electrify the federal vehicle fleet, and incentives for electricity suppliers to achieve Biden’s goal of 80pc clean power by 2030 (it is currently approximately 40pc).

US Senate budget chairman Bernie Sanders said the package would address “the long-neglected needs of working families – not just the 1pc and wealthy campaign contributors.” 

That, he said, will "restore the faith of the American people in the belief that we can have a government that works for all of us and not just a few.”

Mitch McConnell, the Senate’s Republican leader, said his party didn’t agree and wouldn’t assist the Democrats in playing “Russian roulette” with the US economy.

“If this historically reckless taxing and spending spree is how the modern Democratic party wants to define itself – if they want inflation and tax hikes to be their legacy – then Republicans do not currently have the votes to spare American families this nightmare,” he said.

The details still must be filled in through actual legislation.

Getting that through the US Senate will require unified support from all 50 Democratic senators, even with the advantage of a Senate rule that prevents Republicans from using a filibuster to block it. Moderate Democrats such as senator Joe Manchin and Kyrsten Sinema already have expressed qualms.

US Senate committees are supposed to complete the bill by September 15 – though negotiating the mammoth package and passing it in both chambers could take much longer.

The party’s various factions will until then wrangle over the size of the plan and how to handle hot-button issues – like climate provisions, paths to US citizenship for millions of immigrants, and taxes.

Republicans have been trying to stoke some of those differences, by proposing non-binding amendments, forcing politically fraught votes, and highlighting Democrats’ intra-party divisions. For instance, an amendment sponsored by North Dakota Republican Kevin Cramer (instructing the government not to issue any regulations restricting hydraulic fracking) passed 57-42, gaining support from eight Democrats.

Even as the Democratic budget outline calls for tax increases on households earning more than $400,000 per year, it instructs committees to cut taxes for those making less.

Among the provisions is an extension of the child tax credit, which gives parents up to $300 per child per month. That tax break is currently scheduled to be scaled back at the end of the year.

The cuts for middle-class families would be offset by large tax increases on corporations, including raising the corporate tax rate and imposing a minimum tax on offshore business profits.

Biden has proposed raising the corporate tax rate from 21pc to 28pc, though some moderate Democrats, including Manchin, say they don’t support an increase that big.

The resolution also specifically references expanding the state and local tax (SALT) deduction, a key priority for lawmakers representing high-tax areas, including those in New York and New Jersey.

Increasing the $10,000 cap on the SALT deduction is of particular importance. More than 20 Democrats have said they would sink Biden’s economic agenda – unless the tax break, which was limited under Trump, is made more generous.

The budget win followed another major victory for Biden in the US Senate, a bipartisan 69-30 vote on Tuesday approving legislation for $550bn in new infrastructure spending that is another pillar of Biden's economic agenda.

It was a breakthrough compromise that has eluded multiple presidents for years, even though both parties deemed infrastructure a high priority.

Nineteen Republicans voted in favor of the infrastructure package, including McConnell, who under Barack Obama bestowed on himself the nickname ‘The Grim Reaper’ for his record of obstructing Democratic presidential priorities.

Yet that, too, is enmeshed in Democratic jockeying, with some ‘progressives’ threatening to vote against the infrastructure bill unless the US Senate first sends over a measure delivering on the budget framework’s promises.

House of Representatives speaker Nancy Pelosi, who cannot afford to lose more than three Democrats on a party-line vote, said she would delay consideration of the infrastructure package until the Senate passes legislation following through on the budget.