Biden Agenda Deal Picks Up Speed in Senate as House Has Doubts
(Bloomberg) -- Senate Democrats moved closer to an agreement on President Joe Biden’s economic agenda on Monday, but some House lawmakers raised doubts about the terms of the deal being discussed and whether differences could be resolved in the next few days.
Senator Joe Manchin, who has been pushing to shrink the size of a sweeping social-spending package, expressed optimism Democrats could have a deal this week, the best recent sign for Biden’s domestic agenda after months of intra-party wrangling over tax and spending increases.
House Democrats were far more skeptical. House Budget Chairman John Yarmuth said there were numerous parts of the plan still being negotiated and talks could extend beyond this week.
“I wouldn’t bet my grandson on that,” the Kentucky Democrat said when asked if he thought the new framework could be completed before Biden leaves for European summits later this week.
Representative Pramila Jayapal, who heads the Congressional Progressive Caucus and has pushed for more spending, said Monday night negotiators are close but it’s better to get the deal right than to rush it.
“There’s just so many moving parts,” Manchin said after leaving a meeting with Senate Majority Leader Chuck Schumer and other Democrats. “Everyone is trying to deal in as good faith as they can to make this all happen.”
An agreement could allow the House this week to pass a separate, $550 billion bipartisan infrastructure bill. Progressive Democrats in the House have held up that legislation until there’s agreement within the party on the broader package, which includes spending on social programs and measures to address climate change.
Jayapal suggested votes on both the Biden agenda and the infrastructure bill should happen next week. And House leaders cast doubt on whether there could be a vote on the infrastructure package in the coming days.
“We want to have an agreement so that we can go forward,” Speaker Nancy Pelosi said when asked about the potential for a floor vote this week.
House Majority Leader Steny Hoyer said Monday evening said Democrats don’t have a timeline for the infrastructure vote.
“We want to have something to give our progressives confidence we will do both bills,” he said.
Manchin said he hasn’t moved on his insistence that the overall price tag for the tax and spending package be limited to $1.5 trillion rather than the $3.5 trillion originally set out by Democratic leaders. And he indicated actual legislation is far from being drafted.
“Having it finished with all the ‘t’s’ and ‘i’s’ and everything crossed and dotted will be difficult from the Senate side, because we have an awful lot of text to go through,” Manchin said Monday morning. “But as far as conceptually, we should. I think a framework should be” feasible this week, he said.
Manchin is a pivotal player in negotiations on the tax and spending package along with Arizona Kyrsten Sinema, who also has raised objections to elements of the package. Both are key Democratic votes in the 50-50 Senate.
Manchin met on Sunday with Biden and Schumer in an effort to break a months-long stalemate. Biden said Monday he hopes to get an agreement on the plan before he leaves Thursday for summits in Europe that include a UN climate change conference in Glasgow.
“It’d be very, very positive to get it done before the trip,” Biden told reporters.
Schumer said there are “three to four outstanding issues” that remain to be resolved on the tax and spending package. He said he wants to nail down the climate provisions before the president leaves for his trip.
One of the biggest issues still unsettled is how to pay for the package. Manchin, of West Virginia, had supported rolling back some of the Trump tax cuts for high earners and corporations, as Biden had proposed. But Sinema signaled her opposition to higher tax rates, turning focus to a so-called billionaires tax on assets. Manchin indicated he’s open to that idea.
The tax would apply to a wide variety of items like stocks, bonds, real estate and art, with gains in value taxed on an annual basis, regardless of whether or not the asset is sold. Annual decreases in value could also be deducted, according to a version of the proposal, which dates to 2019.
Pelosi said House lawmakers had not yet seen any legislative language on the billionaire’s tax.
“But whether we have it or not it does not take the place of our having other ways to pay for the legislation, in some ways that are simpler but nonetheless all add up,” Pelosi said.
House Ways and Means Chairman Richard Neal said the billionaire’s tax is complicated and hard to implement, particularly in how to deal with unrealized losses. He said that the House tax plan to increase rates “looks better every day.”
“I’ve said repeatedly, it’s efficient. Rates are published advertised and adhere to,” he said. “Everybody knows what the plan is going forward.”
Senate Finance Chair Ron Wyden said after a meeting among key Senate Democrats, including Manchin, that the so-called billionaires tax would be drafted in the “next two days.”
Other tax proposals in flux include a possible two-year suspension of the $10,000 cap on state and local tax deductions, the imposition of a minimum corporate income tax and a stock buyback tax.
On healthcare policy, Manchin indicated there are still differences between him, Biden and progressive Democrats. Manchin has resisted expanding Medicare to include dental, hearing and vision benefits. He said Monday that because the program faces insolvency in five years it shouldn’t be expanded without addressing deeper fiscal problems.
“You’ve got to stabilize that first before you do an expansion,” he said. He also said he is opposed to a proposed expansion of Medicaid eligibility to states which have so far refused to expand the program, because states like West Virginia would still be paying part of the costs while the newly eligible states would get a free ride.
Manchin’s opposition to Biden’s “Clean Electricity Performance Program,” a centerpiece in the climate provisions, has caused that $150 billion item to be dropped.
He said Monday he is working with Biden to bolster renewable energy tax credits and incentives for energy efficiency.
Many of Biden’s original priorities appear on track to remain in the package, but at a shorter duration than originally proposed. These include Affordable Care Act premium subsidies, universal pre-kindergarten, renewable energy tax credits, earned-income tax credit expansion, housing rental vouchers and mortgage assistance and clean water funds.
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