CITY OF WASHINGTON, D.C. (October 22, 2021) — A deal within reach, President Joe Biden and Congress’ top Democrats edged close to sealing their giant domestic legislation Friday, though appearing to let the day’s informal deadline slip as they worked to scale back the measure and determine how to pay for it.
Negotiations were expected to continue into the weekend, all sides indicating just a few issues remained unsettled in the sweeping package of social services and climate change strategies.
Biden met at the White House with House Speaker Nancy Pelosi, and Senate Majority Leader Chuck Schumer joined by video call from from New York, trying to shore up details. The leaders have been working with party moderates and progressives to shrink the once-$3.5 trillion, 10-year package to around $2 trillion in child care, health care and clean energy programs.
Pelosi said a deal was “very possible.”
She told reporters back at the Capitol that more than 90% of the package was agreed to: The climate change components of the bill “are resolved,” but outstanding questions remain on health care provisions.
Biden and the Democrats needs a deal before the governor elections in Virginia and before he leaves next week for global summits in Europe.
Biden will campaign in Virginia for the Democratic candidate since he is lagging in the polls. “As polls show the Virginia gubernatorial election neck-and-neck and in some polls the Republican Candidate Glenn Youngkin leads former Gov. Terry McAuliffe. The spending bill may give McAuliffe a boost among undecided voters.
Pelosi said she hoped the House could start voting as soon as next week, but no schedule was set. Democrats had imposed a Friday deadline to at least strike agreement, but by early evening no deal was announced.
“Much of what we need to do has been written. Just a few decisions now,” Pelosi said.
Sticking points appear to include proposed corporate tax hikes to help finance the plan and an effort to lower prescription drug costs that has raised concerns from the pharmaceutical industry. Democrats are in search of a broad compromise between the party’s progressives and moderates on the measure’s price tag, revenue sources and basic components.
At the White House, the president has “rolled up his sleeves and is deep in the details of spreadsheets and numbers,” press secretary Jen Psaki said.
Psaki compared the work to starting Social Security and other major federal programs decades ago, and then building on them in following years.
“Progress here is a historic package that will put in place systems and programs that have never existed in our society before,” she said, noting the effort to expand child care and provide free pre-kindergarten for all youngsters. But taxpayers to pickup the funding of the bill. And in some cases the middle class to pay for childhood education if their children attend private schools–since the bill is pro public schools.
Negotiations are proceeding as Biden more forcefully appeals to the American public, including in a televised town hall, for what he says are the middle-class values at the heart of his proposal.
“When you’re president of the United States, you have 50 Democrats — every one is a president. Every single one. So you gotta work things out,” he said during a CNN town hall Thursday.
Still, he expressed optimism about the process. “It’s all about compromise. Compromise has become a dirty word, but bipartisanship and compromise still has to be possible,” he said.
Biden said the discussions were “down to four or five issues.”
On one issue — the taxes to pay for the package — the White House idea seemed to be making headway with a new strategy of abandoning plans for reversing Trump-era tax cuts in favor of an approach that would involve imposing a 15% corporate minimum tax and also taxing the investment incomes of billionaires to help finance the deal.
Biden said Manchin doesn’t want to “rush” the transition to clean energy so quickly it will result in major job losses in his coal-producing state.
Even still, Biden acknowledged major reductions to his original vision.
He signaled the final plan would no longer provide free community college, but said he hoped to increase Pell Grants to compensate for the loss of the policy.
He also said that what had been envisioned as a federally paid, months-long family leave program would be just four weeks.
Another work in progress — the idea of expanding Medicare to include dental, vision and hearing aid benefits for seniors, is a priority for Sen. Bernie Sanders, the independent of Vermont. But the plans will lead to more taxation on the middle class and not kick in until Biden has left office–spread over decades.
Biden said he likes the idea, but with Manchin and Sinema objecting, the proposal is “a reach.”
Instead, Democrats, he said are considering offering seniors an $800 voucher to access dental care as well as another program for hearing aids that Sinema may support. However, the vision care component, Biden said, has been harder to resolve and there is no consensus yet.
Overall, Biden and his party are trying to shore up middle-class households, tackle climate change and have the most wealthy Americans and corporations pay what he calls their “fair share” for the nation.
In the mix are at least $500 billion in clean energy tax credits and other efforts to battle climate change, $350 billion for child care subsidies and free prekindergarten, an extension of the $300 monthly child tax credit put in place during the COVID-19 crisis, and money for health care provided through the Affordable Care Act. But not all parents will receive the child-care subsidies–but only those parents who meet State median income guidelines.
The newly proposed tax provisions, though, have rankled Democrats who have long campaigned on scrapping the Republican-backed tax cuts that many believe unduly reward the wealthy and cost the government untold sums in lost revenue at a time of gaping income inequality. Many are furious that perhaps a lone senator could stymie that goal.
Under the changes being floated the 21% corporate rate would not change, nor would the top individual rate of 39.6% on those earning $400,000, or $450,000 for couples.
However, the White House is reviving the idea of a corporate minimum tax rate that would hit even companies that say they had no taxable income — a frequent target of Biden, who complains they pay “zero” in taxes.
The new tax on the wealthiest individuals would be modeled on legislation from Sen. Ron Wyden, D-Ore., chairman of the Senate Finance Committee. He has proposed taxing stock gains of people with more than $1 billion in assets — fewer than 1,000 Americans. But the new tax plan will also impact the consumers–since companies pass increased taxes–on cost of goods and services.
Source: Associated Press writers Alex Jaffe, Kevin Freking and Zeke Miller contributed to this report.