Biden, Democrats and a $3.5 trillion package

Lisa Mascaro, Associated Press

With the calendar slipping toward a new deadline, House Speaker Nancy Pelosi is warning that “difficult decisions must be made” to trim President Joe Biden’s expansive plans for reimagining the nation’s social service programmes and tackling climate change.

Democrats are labouring to chisel the $3.5 trillion package to about $2 trillion, a still massive proposal that would be paid for with higher taxes on corporations and the wealthy. And with no votes to spare, they must somehow satisfy the party’s competing moderate and progressive lawmakers needed for any deal.

It’s all raising tough questions that Biden and his party are rushing to answer by the deadline for passage, Oct. 31.

Should Biden keep the sweep of his proposals — free childcare and community college; dental, vision and hearing aid benefits for seniors — but for just a few years? Or should the ideas be limited to a few, key health and education programmes that could become more permanent? Should the climate change effort go bold — a national clean energy standard — or stick with a more immediate, if incremental, strategy?

“The fact is, that if there are fewer dollars to spend there are choices to be made,” Pelosi said on Tuesday at the Capitol.

Republicans are dead set against the package. So Biden and his party are left to deliberate among themselves along familiar lines, centrists and moderates, with all eyes still on two key holdouts, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, whose votes are crucial in the evenly divided Senate.

Time is growing short for the president on what has been his signature domestic policy initiative, first unveiled in March and now having consumed much of his fitful first year in office.

Biden’s approval rating is down after a turbulent summer, and impatience is growing, particularly among House lawmakers heading into tough elections and eager to show voters an accomplishment — unlike senators whose staggered six-year terms leave only some of them facing reelection in 2022.

At the White House, Biden agrees that “this is really the point where decisions need to be made,” Press Secretary Jen Psaki said on Tuesday.

Conversations are quietly under way with Manchin and Sinema, who continue to infuriate their colleagues by holding up the package while still not making fully clear what they are willing to support or reject.

“The president’s view is that we’re continuing to make progress, we’re having important discussions about what a package that is smaller than $3.5 trillion would look like,” said Psaki. But it’s time to get it settled.

The debate among Democrats is part substance, part strategy. The White House and lawmakers are considering which proposals would bring the most benefit to the most Americans — and also how best to accomplish their goals with fewer dollars.

On one side, the progressives argue for keeping the broad scope of Biden’s vision, with many different programs, even if they expire in just a few years. The idea is to view shorter terms as an opportunity, with lawmakers free to campaign in the future for their renewal.

Progressive leaders said Tuesday they are willing to reduce the duration of some programs to less than 10 years as a way to lower costs, but they are unwilling to yield on their core priorities of child care, health care, climate change action and others.

Rep. Pramila Jayapal of Washington, leader of the Congressional Progressive Caucus, said their priorities are “not some fringe wish list” but the agenda the president and Democrats campaigned on.

Pelosi, though, appeared to side with some of the more centrist lawmakers, who have argued that it would better to narrow the scope, building on the expansions that have been under way with the coronavirus aid packages and making them more lasting.

Pelosi has been a staunch supporter of expanding the Affordable Care Act, also known as Obamacare, to more people and in more states. That law is her own legacy legislative accomplishment. However, with the dollar topline for the big bill now shrunk, that could bump against Bernie Sanders of Vermont and other progressives who are intent on expanding seniors’ Medicare to include vision, dental and hearing aid services — among his own top priorities.

“Overwhelmingly, the guidance I am receiving from members is to do fewer things well,” Pelosi said in a letter this week to colleagues.

Rep. Suzan DelBene of Washington state, chair of the New Democrat Coalition, made a similar push during a meeting of moderate lawmakers last month at the White House.

The group has focused on just a few main priorities, including two that emerged in the COVID-19 aid packages — extending the child tax credits that are funnelling about $300 a month to most families but expire in December, and making permanent the higher health care subsidies that were offered during the pandemic to those who buy their insurance through the Affordable Care Act. Those moderates also want to expand the ACA into the states, largely those run by Republican governors, that have rejected it under previous federal funding proposals.

DelBene told Biden they should aim to “do fewer things better,” said an aide familiar with the private conversation and granted anonymity to discuss it.

What remains clear, however, is that nothing will move Biden’s big package until Manchin and Sinema are on board, and that remains a work in progress.

Manchin’s priorities are largely in line with his party on the tax side of the equation, according to a memo he shared over the summer with Senate Majority Leader Chuck Schumer, but diverge on spending. A Democrat familiar with the document was granted anonymity to confirm its veracity.

Manchin proposed a 25 per cent corporate tax rate, which is close to the 26.5 per cent rate proposed in the House bill, both an increase from what is now a 21 per cent rate. He also is on board with a top individual income tax rate of 39.6 per cent, which Bide has proposed on those earning beyond $400,000 a year, or $450,000 for couples.

But the senator from coal-centred West Virginia who chairs the Energy and Natural Resources Committee wants more control over his party’s climate fighting strategies, and he also wants income limits on many of the social services, something many progressives oppose.

On a call with reporters, Sen. Elizabeth Warren of Massachusetts said income should not be a factor in many of the services being proposed.

“We don’t ask how much money you make before you drive on a road,” she said. “These are public goods that we create.”