(CNN) Senate Democrats on the Budget Committee announced late Tuesday they struck an agreement on a $3.5 trillion budget resolution that includes spending for President Joe Biden's sweeping social agenda -- and would be a first step toward unlocking their ability to pass their own infrastructure bill later this year.
The effort is separate from a bipartisan bill on traditional roads and bridges and is expected to set the stage for Democrats to pass reforms like expanding the child tax credit, offering paid medical and family leave and potentially even overhauling the country's immigration system. The bill is also expected to include changes to the US tax code.
Senate Majority Leader Chuck Schumer announced the agreement after emerging from a late-night meeting at the US Capitol, flanked by Budget Chairman Bernie Sanders of Vermont and others on the committee -- a sign of unity among members of the Democratic caucus that the committee had sought in recent weeks as they hammered out their framework.
The bill still has a long way to go. It's still unclear if the proposal of $3.5 trillion can earn the support of moderates who have made clear they have deep reservations about spending trillions more after a year of emergency relief spending during the coronavirus pandemic. Schumer on Tuesday said that the legislation will eventually have the 50 votes needed to pass the Senate.
"The budget resolution with instructions will be $3.5 trillion. You add that to the $600 billion bipartisan plan, you get to $4.1 (trillion), which is very, very close to what President (Joe) Biden asked us for," Schumer said. "Every major program that President Biden has asked us for is funded in a robust way."
Progressives Democrats have pushed party leaders to put forward a larger legislative package through budget reconciliation, meaning under Senate rules it could be passed through the Senate with only Democratic votes -- in order for them to support the separate, roughly $600 billion bipartisan infrastructure deal. Last month, House Speaker Nancy Pelosi said the House would not take up the bipartisan infrastructure deal until the Senate passes a more sweeping package through budget reconciliation.
Biden will join Senate Democrats during their party lunch Wednesday, an effort to begin the sales pitch that will be needed to win over skeptical Democrats in the weeks ahead and another sign that the White House is fully immersed in a two-track strategy to pass infrastructure.
Schumer made it clear Wednesday the Democrats' $3.5 trillion plan would go beyond traditional infrastructure and include a historic expansion of Medicare, allowing coverage for the first time for hearing, dental and vision, a provision that has been a top priority for Sanders.
Sanders, who originally pushed for a much broader package with a goal of spending as much as $6 trillion, endorsed the plan Tuesday night calling it a "big deal."
He noted the package will raise taxes on wealthy Americans, though he did not specifically outline which ones. An aide told CNN the budget outline will prohibit tax increases on anyone making less than $400,000 a year.
"The American people have seen the very rich getting richer and government developing policies, which allowed them to pay, in some cases, not a nickel in federal income taxes, they've seen corporations make huge profits," Sanders said. "In some cases, they're not paying a nickel in taxes. And what this legislation says, among many, many other things, is that those days are gone. The wealthy and large corporations are going to start paying their fair share of taxes, so that we can protect the working families of this country."
Sources told CNN later Tuesday that Sanders and Progressive Caucus Chair Pramila Jayapal of Washington state had held a call with a group of progressive lawmakers on Monday in which they discussed $3.5 trillion not being enough to cover all of the legislative priorities they wanted to fit into the package.
"This is a capitulation by progressives," a progressive lawmaker familiar with the call told CNN on Tuesday, reacting to the agreed-upon number.
"Many in the Squad and Squad-adjacent will vote no," the lawmaker added, referencing members of the Democratic Party's progressive wing and making clear that it will be a rocky road of negotiations ahead.
Another source familiar with the Monday call said it was not about whether progressives would support the top-line number but rather the reality of what would have to be cut from the priority list if the final number ended up being around $3.5 trillion.
On Tuesday, moderate Sen. Mark Warner, a Virginia Democrat who played a key role in the budget negotiation, joined Sanders in endorsing the plan.
"I've done this job for about 12 years. I can't think of a more meaningful effort that we're taking on, than what we're doing right now," Warner said.
While the Democrats' agreement marks a significant in the process, it marks the beginning of a lengthy and intense summer of negotiations. Democrats will have to pass their budget before the August recess if they want to meet Schumer's deadline.
Then, more than a half dozen Senate committees will have to draft the Democratic bill -- a process that will include weeks of discussions and a review from the Senate parliamentarian, who may limit what Democrats are actually able to include in their final proposal.
This story has been updated with additional details Tuesday.