Biden Plan Gathers Steam as Feuding Democrats See Path to Vote
(Bloomberg) -- President Joe Biden’s economic agenda appears on track for passage by Congress even as Democrats are still skirmishing over lingering differences on a $1.75 trillion social-spending plan.
House Democratic leaders are pushing hard to get that package finalized, with votes on both that bill and a smaller infrastructure plan this week -- the latest in a string of self-imposed deadlines. The Senate, which already approved the public-works bill, is likely to vote on the larger package later in the month.
To meet that tight timeline, Democrats worked over the weekend to reach an agreement on whether to add drug price cuts, a change to federal deductions for state and local taxes, paid family leave and immigration language, among other items.
A House Democratic leadership aide said Sunday that progress had been made on several of the outstanding issues, including drug pricing, but that a Monday Rules Committee meeting that would have prepared the bill for a Tuesday floor vote was postponed.
Biden, at a news conference closing out the Group of 20 summit Sunday in Rome, expressed confidence that both the social-spending package -- which will be financed with tax hikes -- and the infrastructure legislation were well on the way to passage.
“I believe we’ll see, by the end of next week at home, that is passed,” he said.
The outline of the tax and spending bill, laid out by Biden before Congress last week, provided a breakthrough after a weeks-long standoff between moderate senators and progressive Democrats over the size and scope of the administration’s signature legislation, which includes new spending on social programs and climate change.
The Senate-passed bipartisan infrastructure bill has been caught in the crossfire, with House progressives blocking the measure, which provides $550 billion in new spending, as leverage in negotiations on the larger bill.
Progressive Democrats formally backed the $1.75 trillion outline, even though it was half the size of the budget framework passed by both the House and Senate in August. They weren’t willing to allow an infrastructure vote on Thursday, but signs are pointing to it going forward this week.
Representative Ro Khanna of California, a leading progressive, said on CBS’s “Face the Nation” on Sunday he would vote yes on both bills this week.
“The president has shown patient and extraordinary leadership. It is time for this party to get together and deliver,” Khanna said.
Two centrist Democrats in the Senate whose votes are crucial, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, negotiated the framework with Biden but have not formally endorsed it. Vermont Senator Bernie Sanders and other progressives say they want guaranteed support from all 50 senators in the Democratic caucus before the House votes on the public works measure.
“You don’t have to have all of the legislative language, but you have to have a statement which says A, B, C, D and E is going to be in the package and 50 members of the Senate are supporting it,” Sanders said Sunday on CNN’s “State of the Union.”
Continued wrangling in the Senate could mean that the final vote there is pushed closer to the Thanksgiving holiday at the end of this month.
Virginia Senator Tim Kaine said Friday in an interview on Bloomberg Television’s “Balance of Power with David Westin” that “we will get both of these bills done,” but said it could take until the end of November. On Sunday, a person familiar with the negotiations said the Senate isn’t likely to consider the legislation for at least a week after the House acts, to allow time to ensure the chamber’s parliamentarian agrees the package can move under Senate rules that short-circuit the filibuster.
The biggest hurdle to quick action is that some Democratic senators are signaling they may seek changes to what the House passes, even though many Democrats in the lower chamber are reluctant to vote on any bill that might be amended by the Senate.
The House would have to vote again if the legislation is modified, and that would risk pushing work past two looming November holiday recesses and into December -- when Congress also must pass a bill to avoid a government shutdown and revisit the battle over raising the federal debt ceiling.
Senate Finance Committee Chair Ron Wyden, whose billionaire tax was excluded as one of the revenue measures to pay for the social-spending bill, said last week he was still trying to find a way to tax the assets of the wealthy who do not draw regular income.
“I just want to be very blunt about it. We understand where the process is. The deal is not done until the Senate acts,” he said.
The billionaire tax isn’t the only source of contention for Wyden, who said he will go to the mat to lower drug prices.
House Speaker Nancy Pelosi is leading the effort to cut prescription drug prices, and lawmakers are optimistic a deal can be reached within days. The emerging plan could allow Medicare to negotiate drug prices for the first time, and talks continue on what categories of drugs would be subject to the cost-cutting negotiation power.
To do that and not lose votes, Democrats will likely have to drop or modify a proposed 95% excise tax on drug companies that was originally proposed to force them to lower prices for younger patients not part of Medicare.
The changes to drug prices appear to have a better shot than another liberal priority, paid family leave. Already, lead proponents of that policy are signaling they will not be able to convince Manchin to go along with it.
Biden’s outline specified that the bill could spend an additional $100 billion on immigration changes if Senate rules allow, adding another wrinkle to the ongoing talks.
The Senate parliamentarian has twice rejected proposals to provide a pathway to citizenship for millions of undocumented immigrants, saying they don’t comply with Senate rules for the reconciliation process Democrats are using. Senate Democrats early this week intend to propose a pared-down plan that instead would provide temporary deportation protections and the ability to apply for work permits.
Key House Democrats Chuy Garcia, Lou Correa and Adriano Espaillat have indicated they would continue to block passage of both pieces of the Biden agenda in the House unless immigration changes are included. Losing on that front would add to the sting of disappointments over the scaled-down agenda.
Changes to the federal deduction for state and local taxes -- absent from Biden’s framework -- will likely be added in to appease key northeast lawmakers.
House Ways and Means Committee Chairman Richard Neal has said SALT will be addressed in the final package, but it’s unclear yet how.
House Democrats have floated several options, including suspending the $10,000 cap for 2022 and 2023, with the limit returning for four more years starting in 2024. Another option is to increase the ceiling significantly, but keep it in place for many more years.
The White House outline detailed nearly $2 trillion worth of tax hikes to fund a $1.75 trillion package, giving Democrats some wiggle room to scale back some of the levy increases. The measures have yet to be scored by the Joint Committee on Taxation, Congress’s non-partisan tax scorekeeper, so the estimates could change -- causing Democrats to search for more revenue if the official projections fall short of the administration’s expectations.
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