President Joe Biden and Democratic leaders are driving toward a $1.75 trillion agreement that will unlock the votes for the separate infrastructure package — and arm Biden with two momentous legislative victories — as he departs for the world stage later this week.
Half its original size, President Joe Biden’s big domestic policy plan is being pulled apart and reconfigured as Democrats edge closer to satisfying their most reluctant colleagues and finishing what’s now about a $1.75 trillion package.
How to pay for it all remained deeply in flux, with a proposed billionaires’ tax running into criticism as cumbersome or worse. That’s forcing difficult reductions, if not the outright elimination, of policy priorities — from paid family leave to child care to dental, vision and hearing aid benefits for seniors.
As per reports, Democrats stepped closer to an agreement on President Joe Biden’s agenda as Sen. Joe Manchin, who has been pushing to shrink the size of a sweeping social-spending package, said a deal on the outlines of the plan is within reach this week.
Manchin’s expression of optimism Monday marked a turnabout from his forecast last week of drawn-out negotiations, and mark the best recent sign for Biden’s domestic agenda after months of intra-party wrangling over tax and spending increases.
The once hefty climate change strategies are losing some punch, too, focusing away from punitive measures on polluters in a shift toward instead rewarding clean energy incentives.
All told, Biden’s package remains a substantial undertaking — and could still top $2 trillion in perhaps the largest effort of its kind from Congress in decades. But it’s far slimmer than the president and his party first envisioned.
House Speaker Nancy Pelosi told lawmakers in a caucus meeting they were on the verge of “something major, transformative, historic and bigger than anything else” ever attempted in Congress, according to a person who requested anonymity to share her private remarks.
“We know that we are close,” said Rep. Joyce Beatty, D-Ohio, the chair of the Congressional Black Caucus, after a meeting with Biden at the White House.
“We want to have something to give our progressives confidence we will do both bills,” House Majority Leader Steny Hoyer said Monday evening. “We don’t have a timeline” for the infrastructure vote, he said.
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.
Senate Finance Chair Ron Wyden said after a meeting among key Senate Democrats, including Manchin, that the tax plan 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.
Sen. Joe Manchin is a pivotal player in negotiations on the tax and spending package along with Arizona Sen. 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.
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.
“I believe a final deal is within reach,” Schumer said, while signaling that members are much closer to agreement on “robust” climate provisions. There was also movement on how to pay for the package, as Sen. Kyrsten Sinema (D-Ariz.) threw her weight behind a proposal for a minimum tax on corporate profits.
“This proposal represents a commonsense step toward ensuring that highly profitable corporations — which sometimes can avoid the current corporate tax rate — pay a reasonable minimum tax on their profits, just as everyday Arizonans and Arizona small businesses do,” Sinema, who also met with Biden on Tuesday evening, said in a statement.
Meanwhile, Senate Finance Committee Chairman Ron Wyden (D-Ore.) on Wednesday unveiled his proposal to tax billionaires’ investment gains annually, which could become a key provision in Democrats’ social-spending package.
The proposal comes as Democrats are working to determine how to raise revenue to finance spending in the package. It’s the second major tax proposal Wyden has released in recent days, following a proposal he released Tuesday to create a minimum tax on corporate profits.
“We have a historic opportunity with the Billionaires Income Tax to restore fairness to our tax code, and fund critical investments in American families,” Wyden said in a statement.
Wyden’s proposal is aimed at preventing billionaires from avoiding taxes. Currently, people don’t have to pay taxes on investment gains until they sell the assets. The proposal would affect taxpayers with assets of more than $1 billion or income of more than $100 million for three years in a row. About 700 taxpayers are expected to be subject to the tax. The proposal also includes rules designed to prevent billionaires from avoiding paying the tax.
The reality remains there are a handful of significant — and thorny — policy disputes that still must be reconciled in a matter of days. But there is no question that in the minds of top White House officials and congressional Democrats, the time for busted deadlines or elongated policy deliberations have come to an end.
The bottom line is that by the time Biden leaves for his foreign trip on Thursday, his $1.2 trillion bipartisan infrastructure bill could be signed into law, with an agreement on a $1.75 trillion economic and climate package in hand. Biden told reporters on Monday, “With the grace of God and the goodwill of neighbors,” a deal will be made before the trip, adding, “It’d be very positive to get it done before the trip.”