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Here's what we know is in the scaled back Biden budget bill and what got cut

22October 2021

Sen. Kyrsten Sinema, D-Ariz., has expressed opposition to increases in corporate tax rates, one of the key ways Democrats want to pay for their domestic policy bill. Democrats are looking at alternatives.

Pool/Getty Images

Pool/Getty Images

Democratic leaders have set the end of this week as a deadline to try to get a detailed framework for their domestic policy bill that sweeps up all of President Joe Biden’s top priorities. After months of infighting, there was a new sense of urgency and optimism this week that a deal is within reach — or at least a framework for one — that could pass the House and Senate later this fall.

Opposition to the initial $3.5 trillion price tag for the president’s “Build Back Better” plan from two key Senate moderates — Sen. Joe Manchin, D-W.Va., and Sen. Kyrsten Sinema, D-Ariz. — forced leaders and the president to trim programs, and lower expectations for those on the left.

Biden met with both progressives and moderates earlier this week. Both sides left the meetings with the realization that they can’t get everything they wanted. Now red lines have given way to real horse trading as Democrats piece together a roughly $2 trillion package.

And one sign of progress came late Thursday afternoon. Sinema has now agreed to a package of tax changes that would meet the president’s goal of fully paying for the social spending package, according to a source familiar with Sinema’s thinking. These changes would not impact the corporate rate, according to this source. The Arizona Democrat opposed changes to the current corporate tax rate, leaving the tax writing committee scrambling for alternatives to fill the gap.

As negotiations continue, here’s where things stand on some of the major policies that are expected to be included, and some that are expected to fall out.

Climate change provisions are scaled back

The president had touted the Clean Energy Performance Program (CEPP), which provides incentives for utility companies to switch to greener technologies and fines those who don’t, as the centerpiece of his climate agenda. He saw it as a tool that could achieve his goal of reducing greenhouse gas emissions by 50% by 2030. But the program has been dropped because Manchin, who represents a state heavily reliant on coal production, doesn’t support it. House Speaker Nancy Pelosi downplayed that concession, and insisted there are other ways to get to that goal.

“It isn’t about a particular plan. It’s about reaching our goals and how we do it. I feel very satisfied the path we’re on to do that,” she said Thursday.

Biden, Pelosi and other congressional Democrats, are scheduled to travel to the COP26 climate change conference in Scotland at the end of the month, so negotiators are sorting through various other proposals that Manchin can back — a mix of tax credits and other programs — and that can show world leaders the U.S. is making good on its climate goals. The White House is also discussing some administrative actions they can take that wouldn’t require congressional approval.

Child care, paid family leave get squeezed

The expanded child tax credit that was enacted as part of this spring’s coronavirus relief package has been credited with dropping child poverty rates. Democrats view it as a key policy achievement. Biden had hoped to extend it for four more years. Democrats say now the plan is to extend the tax credit for just one year, through 2023. Pelosi told reporters she preferred a permanent extension, but said “it is called the Biden child tax credit. So if it’s acceptable to him, in light of the bill, it’s acceptable to me.”

Many Democrats believe the popularity of the policy and the immediate impact will make it tough for Republicans to roll it back if they take control of one or more chambers in the 2022 midterm elections.

Paid family leave has also been scaled back in this smaller bill. During a CNN Town Hall in Baltimore Thursday evening, Biden said “it is down to four weeks.” He had originally proposed 12 weeks. Many rank-and-file Democrats insist they will continue to fight for as many weeks as they can get.

Universal pre-K programs are expected to remain in the proposal, and Pelosi linked them to the child care and family leave proposals as a comprehensive effort to support working parents, and as critical “human infrastructure.”

Health care programs

There are three main health care programs that Democrats say they intend to keep in a final deal — the Affordable Care Act, Medicare and Medicaid. But as the number shrinks on the overall package the challenge on how to structure these plans will be steep.

Pelosi, who steered the Affordable Care Act through the House and views it as a legacy issue for her, has pushed to make subsidies for the program permanent. But a scaled back bill will likely mean extending the subsidy for only another three years.

Budget Committee Chairman Bernie Sanders, I-Vt., proposed to expand Medicare to cover vision, hearing and dental procedures. The costs for all three could prove too expensive in this smaller package. Biden said it would be a “reach” to get all three, but progressives say the president is committed to including something in the final bill. They also say Medicaid coverage is also expected to be expanded, but gave few details.

Free community college gets cut

The Democrats’ original bill included a plan for two years of free community college, but it is one item that both progressives and moderates said was not going to make it in a final deal. The president noted to lawmakers that the proposal was a personal priority for the First Lady, who still teaches at a community college in northern Virginia. But the idea was not able to get broad support in his meetings. Democrats do plan to include some funding for Pell grants and vocational programs in their reconciliation package.

Corporate tax increases

Ways and Means committee Chairman Richard Neal, D-Mass., met with Sinema on Thursday to discuss a range of ideas to pay for the bill following the Arizona Democrat’s insistence that she could not back increasing an increase in the corporate tax rate. She’s also been in regular talks with White House officials and those negotiations appear to have made some major progress in terms of details.

A source familiar with her thinking tells NPR Sinema agreed to provisions in each of the president’s four proposed revenue categories — international, domestic corporate, high net worth individuals, and tax enforcement. These would add up to enough revenue to cover the roughly $2 trillion cost of the bill being negotiated now. One example is a provision targeting billionaires who have not paid taxes on unrealized capital gains, according to the source.

But it’s unclear if other Democrats are on board with some of these alternative proposals from Sinema. Neal cautioned “it’s the ninth inning” and it might be too late to get support from other Democrats and the public on some of these proposals.

Neal said Sinema, who has made few public comments on her specific positions, shared his sentiment that they needed to get a deal. He said he told her this needs to pass, and she said, “I couldn’t agree more.”

Pelosi didn’t rule out passing a bill without an increase in the corporate rate. “We’ll see what survives, what prevails.”

Democrats Keep Talking and Talking and Talking

Leaders continue to say they believe they will be able to stick to their goal of getting a framework that Manchin, Sinema, and the White House can sign off on.

Because Democrats are using a budget process that allows them to avoid a Republican filibuster in the Senate they need all 50 senators in the Democratic caucus to stay united. Pelosi also has little room to maneuver in the House with only a three seat vote margin.

Sen. Sherrod Brown, D-Ohio, who chairs the Senate Banking Committee, told reporters, “it’s hard to keep 50 people together with different constituencies.”

Right now Brown is focused on another issue for the package: investments in public housing and help for first-time home buyers. “It will greater supply of housing and more affordable housing.” He said regardless of what the final number on the bill will be “it will be the biggest investment “in housing that will span urban, suburban and rural areas.

Still, it’s an example of why getting to an agreement on a final framework may be difficult. There are many issues Democrats want to see in this bill, while staying under $2 trillion.

As for Manchin, all week he said Democrats were making progress. But cautioned reporters on Thursday not to focus on a specific day or date as the hard deadline.

“This is not going to happen anytime soon guys,” he said.

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