Biden plans to announce a framework for his social policy and climate bill, but key details remain unresolved. – The New York Times
President Biden went to the Capitol on Thursday to announce a “framework” agreement for a $1.85 trillion social safety net and climate change bill that would bolster support for child care and early childhood education while coaxing the economy away from fossil fuels.
The president, who delayed his departure for a trip to Europe to nail down an accord on his domestic agenda, was using a morning meeting at the Capitol to rally House Democrats around the emerging deal.
“It’s a good day,” Mr. Biden said as he arrived. “Everyone’s on board” with his proposal, he added.
He was pushing to convince liberal members that a final compromise was close enough to allow them to support a separate, $1 trillion infrastructure bill that has already passed the Senate.
But liberals were still skeptical and said they wanted more than talking points.
“There’s been so many changes in this process — so many people, you know, yes, no, doing the Hokey Pokey, one foot in one foot out,” said Representative Alexandria Ocasio-Cortez, Democrat of New York, as she headed into the meeting. “We need certainty that we’re going to be able to deliver.”
Even Democratic leaders said Mr. Biden had his work cut out for him.
“I wish I could say yes, but there’s a great deal of uncertainty within the caucus as to what’s contained in the deal,” Senator Richard J. Durbin of Illinois, the No. 2 Democrat, told reporters when asked if he was confident all 50 senators backed the plan. “I will tell you there is a will to do it.”
At least one lawmaker involved in the talks had been told as of Thursday morning that two crucial holdouts, Senators Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona, had yet to commit to voting for it, according to another person briefed on the discussions, who also spoke on the condition of anonymity.
Representatives for the two senators did not immediately respond to requests for comment.
After speaking to Democrats on Capitol Hill, Mr. Biden was scheduled to deliver remarks from the East Room at the White House before leaving for Rome.
The package is considerably more modest than the cradle-to-grave expansion of the safety net initially envisioned for a bill that would have been about twice as large. But the provisions for young children would offer a significant boost to middle-class families that have struggled for decades with economic uncertainty. They include universal preschool for more than 6 million 3- and 4-year olds and subsidies for child care that would limit child care costs to no more than 7 percent of income, for virtually every family. Funding for both those provisions would last for six years.
It includes about $555 billion for programs to move Americans to electric vehicles and entice utilities away from natural gas and coal, representing what would be the largest federal investment in combating climate change.
Democratic leaders were keen to hand the president a victory before he departed for Europe this week. The president planned to attend a climate summit on Sunday in Scotland, where he hoped to point to the deal as evidence of the United States’ commitment to tackling climate change.
They also hoped the agreement would be enough to persuade the House’s most liberal members that Congress was on the verge of passing a truly progressive package — and that those liberals, in turn, would join more moderate and conservative Democrats to send the $1 trillion bipartisan infrastructure bill to Mr. Biden for his signature and a much-needed boost for his party.
Liberal members of the House and Senate had plenty to lament. The centerpiece of Mr. Biden’s climate change policy — a measure to reward utilities for switching to renewable energy and to punish those that won’t — was stripped out at Mr. Manchin’s insistence. One of the biggest social policies in the original package, a $500 billion federal paid family and medical leave benefit, is also gone.
And anticipated expansion of Medicare to cover vision, dental and hearing care was down to just hearing. An innovative tax on the wealth of billionaires was also out, in favor of a surtax on multimillionaires that would hit income but not their mountains of wealth.
The promise of two years of free community college would go unfulfilled, and the expanded child tax credit, passed in March to give most families a $300-per-child income support, would be extended only into 2023, not made permanent.
The outline also omitted a proposal, long a Democratic priority, to lower the cost of prescription drugs by allowing Medicare to negotiate with pharmaceutical companies.
Among the provisions that survived are federal programs for home health care andcommunity care for older Americans and people with disabilities.
The framework also contains $150 billion for rental assistance, home-buying help, public housing repair and other affordable housing programs.
President Biden is set to announce a framework on Thursday morning on a $1.85 trillion effort to spend heavily on climate change, child care and a wide range of other economic programs, paid for by an estimated $2 trillion in tax increases on corporations and high earners, though it was not immediately clear if it has the votes to pass.
White House officials refused to say if all holdout Democrats in Congress had expressed support for the framework, which still may change.
The framework leaves out several key planks of the economic agenda that Mr. Biden laid out on the campaign trail and shortly after taking office. It does nothing to reduce prescription drug costs for seniors, and it omits what would have been the nation’s first federally guaranteed paid family and medical leave for workers. It does not include free community college for all, as Mr. Biden had promised. It would expand Medicare coverage to include hearing, but not vision or dental services.
It also would not raise the corporate tax rate or the top individual income tax rate, and it would not impose a new tax on the unrealized wealth gains of billionaires, as Democrats had recently proposed.
The key provisions of the proposal include:
$555 billion to fight climate change, largely through tax incentives for low-emission sources of energy.
$400 billion to provide universal prekindergarten to 3- and 4-year-olds, and to significantly reduce health care costs for working families earning up to $300,000 a year.
$200 billion to extend an expanded tax credit for parents through 2022, and to permanently allow parents to benefit from the child tax credit even if they do not earn enough money to have income tax liability.
$165 billion to reduce health care premiums for people who are covered through the Affordable Care Act, to provide insurance for an additional four million people through Medicaid and to offer hearing coverage through Medicare.
$150 billion to reduce a waiting list for in-home care for seniors and disabled Americans, and to improve wages for home health care workers.
$150 billion to build one million affordable housing units.
$100 billion for immigration streamlining, in part to reduce a backlog of nine million visas. House Democrats proposed provisions last month to address the legal immigration system, including a plan to recapture hundreds of thousands of unused visas various administrations failed to use over several decades. The investment outlined on Thursday would also expand legal representation for migrants and streamline processing at the southwest border, officials said. Mr. Biden has faced criticism from both Republicans and Democrats for his handling of migration to the border.
$40 billion for worker training and higher education, including increasing annual Pell grants by $550.
Offsetting that spending is an estimated $2 trillion in revenue increases, including:
A 15 percent minimum tax on the reported profits of large corporations.
Efforts to reduce profit-shifting by multinational companies, including a separate 15 percent minimum tax on profits earned by U.S. companies abroad — and tax penalties for companies that have their headquarters in global tax havens.
A 1 percent tax on corporate stock buybacks.
Increased enforcement for large corporations and the wealthy at the Internal Revenue Service.
An additional 5 percent tax on incomes exceeding $10 million a year and another 3 percent tax on incomes above $25 million.
Efforts to limit business losses for the very wealthy and to impose a 3.8 percent Medicare tax on certain people earning more than $400,000 a year who did not previously pay that tax.
The biggest legislative negotiation in years is taking place on Capitol Hill and at the White House, with key holdouts shuttling back and forth, lawmakers locked in intense private meetings and the news media providing minute-by-minute coverage of the developments.
And Republicans in the House and the Senate have absolutely nothing to do with any of it.
Sidelined by budget rules that give majority Democrats full control over the social safety net bill they are trying to push through, Republicans are strictly spectators as they revel in the internal Democratic disputes, snipe at the emerging legislation and game out how best to take advantage of the situation for next year’s crucial midterm elections.
Top Republican lawmakers who are usually mobbed by reporters walk unimpeded through the Capitol corridors while Democrats are chased down for any snippet of the current state of play. The lack of attention has not gone unnoticed.
“We’re a little bit surprised you’re even here today, because we know all the news is being made on the other side,” Senator Mitch McConnell, Republican of Kentucky and the minority leader, told reporters who showed up for his weekly news conference on Tuesday.
It is not an unprecedented situation. As recently as 2017, Republicans went it alone on their Trump-era tax cuts using the budget reconciliation process, which shields legislation from a filibuster, knowing that Democrats would not support the corporate tax breaks that the Republican Party was eagerly handing out. In 2009 and 2010, Democrats had substantial enough majorities in the Senate and the House that they could enact the Affordable Care Act on their own over universal Republican resistance.
Aware that Republicans would never support the kinds of social and climate programs they are trying to enact in the safety net legislation, Democrats are the ones using reconciliation this time. With the shoe on the other foot and with razor-thin Democratic majorities, the one-sided legislating has rendered Republicans virtually irrelevant as Congress debates potentially momentous legislation expected to cost at least $1.5 trillion.
“As somebody who is open to ideas from both sides and works on a lot of different initiatives with Democrats, to really not be involved or engaged in any aspect of it is just really odd,” said Senator Lisa Murkowski of Alaska, who is among the few Republicans who occasionally join with Democrats on important legislation.
But there seems to be no fear of missing out among Republicans, given their hostility to the emerging domestic policy package, which would lead to a level of social spending that is anathema to Republican lawmakers.
“They just have to satisfy their political base to the point where it gets pulled so far left,” Senator John Cornyn, Republican of Texas, said of the Democrats. “Obviously we don’t like being shut out of the policymaking, but that is the choice they made.”
The budget reconciliation process allows Congress to advance certain spending and tax bills on a simple majority vote, freeing lawmakers in the Senate from the 60-vote threshold most legislation must meet to be considered. Democrats are aiming to use the process to pass their sweeping social safety net and climate change measure, which carries much of President Biden’s agenda, in the face of united Republican opposition.
The process begins with a budget resolution, which establishes a blueprint for federal spending and directs congressional committees to write bills to achieve certain policy results, setting spending and revenue over a certain amount of time. Its name refers to the process of reconciling existing laws with those directives. Here are some key things to know about the legislative maneuver.
There are strict rules on what can be included.
While reconciliation allows senators to scale procedural and scheduling hurdles, it is also subject to strict limits that could constrain any package Democrats seek to pass.
In the Senate, the “Byrd Rule,” established by former Senator Robert Byrd of West Virginia, bars extraneous provisions — including any measure that does not change revenue or spending, that affects the Social Security program or that increases the deficit after a period of time set in the budget resolution. It is intended to ensure that the reconciliation process cannot be abused to jam through unrelated policies.
The rule’s name lends itself to a number of bird-related puns commonly used to describe the stages of the process. There is the “Byrd bath,” when the Senate parliamentarian scrubs and analyzes a bill for any provision that violates the rule if a senator raises a concern about a violation. Anything that does not survive the scrutiny is known as a “Byrd dropping” and is removed from the legislation.
Vice President Kamala Harris could overrule the parliamentarian, but that has not been done since 1975.
The legislative math is proving tough for Democrats.
A budget blueprint was advanced in August and committees have been working on drafting the reconciliation legislation, but centrist Democrats in the Senate who have balked at the $3.5 trillion price tag have created an impasse as party leaders try to negotiate a compromise.
Because Republicans have made it clear they are unified in their opposition, Democrats cannot afford to lose even one vote from their party in the Senate. In the House, the math is almost as challenging: If every representative voted, Democrats could afford to lose only three of their members.
As they hunt for revenue to pay for their sprawling spending bill and try to unite a fractured caucus, Democrats are attempting to rewrite the United States tax code in a matter of days, proposing the kind of sweeping changes to how America taxes businesses and individuals that would normally take months or years to enact.
The effort has effectively discarded trillions of dollars of carefully crafted tax increases that President Biden proposed on the campaign trail and that top Democrats have rolled out in Congress. Instead, lawmakers are throwing a slew of new proposals into the mix, including a tax on billionaires, hoping that they can pass muster both legally and within their own party.
The frantic attempt to overhaul the complex U.S. tax code remained in a state of flux on Wednesday, with Senator Joe Manchin III and some House Democrats expressing reservations about a tax on billionaires that was proposed earlier in the day by Senator Ron Wyden of Oregon. On Tuesday, Mr. Manchin shot down a plan that would have given the Internal Revenue Service more visibility into certain taxpayers’ bank accounts in order to catch tax cheats, forcinga group of Senate Democrats who support the provision to try to negotiate a compromise.
Mr. Manchin’s opposition to a new federal paid leave program also appeared to doom its chances of being included in the final legislation, although supporters of the provision said they would fight to keep it intact.
Senator Mark Warner, a Virginia Democrat, acknowledged on Wednesday that the rapid pace of the legislative process posed risks and said it would be preferable to “allow some of this very, very complicated tax policy to get an appropriate airing back and forth.”
The need to roll out new tax proposals stems largely from the concerns of business groups — and moderate Democrats — who effectively killed Mr. Biden’s initial plan to raise the corporate tax rate to 28 percent from 21 percent to pay for his clean energy and social policy initiatives. Other ideas proposed by the White House, including raising the top marginal rate for the wealthiest taxpayers and doubling the capital gains tax, have also been jettisoned.
The new policy proposals include elements of the kind of wealth tax that Mr. Biden shied away from during his campaign in favor of other tax increases. Under the new plan, billionaires, who often pay little to nothing in federal income taxes, would have to pay taxes on the increased value of certain liquid assets, like stocks and bonds, even if those assets were not sold and the gains were not realized. A second proposal, which Mr. Biden has supported in the past, would impose a 15 percent tax on companies that report at least $1 billion in profits to shareholders but have little or no federal tax liability as a result of tax deductions and other loopholes.
If enacted, the taxes would likely apply to fewer than 1,000 companies and individuals. But the breakneck speed at which changes are being considered and crafted is rattling business groups and some powerful Democrats, who have expressed concern about the consequences of moving so quickly.