Democrats tackle tax, health and climate flashpoints | WIVT
WASHINGTON (AP) – Revamp the tax code and major federal health care and environmental programs. Spend $ 3.5 trillion over 10 years, but maybe a lot less. Make sure no more than three Democrats across Congress vote “no,” because Republicans will be unanimously opposed.
Try to finish in the next few weeks. And oh yes: failure means President Joe Biden’s own party will have repudiated him on the cornerstone of his national platform.
This is what Congressional Democrats face as they attempt to craft a final version of a massive bill that strengthens the social safety net and bolsters efforts to bring climate change under control. Here’s a guide to the crucial differences they need to resolve:
After weeks of negotiations, the White House and the Main Democrats have compromised a cost of $ 3.5 trillion over 10 years for the bill. This is a huge sum, although a fraction of the $ 61 trillion the government is already expected to spend during this period.
But the moderates led by the senses. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona have said that $ 3.5 trillion is too expensive and that all Senate Democrats 50-50 votes are required to be successful. Biden, House Speaker Nancy Pelosi, D-Calif., And Senate Majority Leader Chuck Schumer, DN.Y., recently acknowledged what seems inevitable to many: The end cost may have to come down.
Manchin suggested limiting the total to $ 1 trillion to $ 1.5 trillion, which progressives dismiss as derisory. Liberals led by Senate Budget Committee Chairman Bernie Sanders, I-Vt., Initially said at least $ 6 trillion was needed for serious efforts to help families and curb global warming.
Eventually, a compromise will be reached, with some expecting it to be between $ 2,000 billion and $ 2,500 billion. But since House committees just finished designing a $ 3.5 trillion version of the package, a lower price means some Democratic priorities should be lowered.
To foot much of the bill, the House Ways and Means Committee approved $ 2.1 trillion in tax increases, mostly on the rich and on business. But some details and numbers seem likely to change.
Biden, who has pledged not to raise taxes for people earning less than $ 400,000, will likely get his proposal to raise the wealthiest personal income tax rate to 39.6%. That would be an increase from the 37% approved under former President Donald Trump.
But Democrats also want to increase other levies on the wealthiest, and it’s unclear who will survive and in what form.
For example, Senate Finance Committee Chairman Ron Wyden, D-Ore., Has expressed interest in raising taxes on the value of certain large estates inherited by heirs. Ways and Means Chairman Richard Neal, D-Mass., Omitted this proposal from his panel’s plan.
In addition, Democrats want to offer popular tax credits for children, health care and child care expenses, and many low-income workers. If the size of the overall bill were to decrease, Democrats may have to save money by delaying, phasing in or phasing out or limiting some of these breaks. Some moderates say that a proposed tax credit for the purchase of electric vehicles should not go to those with the highest incomes.
Biden wants to raise the corporate tax rate from 21% to 28% but may have to settle for around 25%. Democrats face other differences when it comes to taxes on foreign corporate income and share buybacks.
Three moderate Democrats have blocked a House committee from approving a top priority for Biden and the Progressives: saving hundreds of billions by letting Medicare negotiate lower prices for the pharmaceuticals it buys. Another committee approved the language, so it’s not dead.
Still, the plan is strongly opposed by drugmakers and some moderates want to water it down. A less aggressive measure could emerge.
Democrats planned to use the savings to pay for another progressive goal: expanding Medicare to cover dental, vision and hearing benefits. If the language of drug prices is diluted and produces less savings, it is unclear how the Medicare expansion would be funded.
SALT AND IRS
In a city that loves acronyms, SALT, short for state and local taxes, is on the table.
Democrats in heavily taxed coastal communities are demanding an increase to the current limit of $ 10,000 on deductions taxpayers can claim for the local and state taxes they pay. In a room where Pelosi cannot lose more than three Democratic votes, they have weight.
To ensure their support, many believe that the deduction limit will be increased. To make up for lost income, the IRS might receive additional money or banks might be required to report more information about financial transactions to the IRS, ideas to strengthen tax collections.
Last month Pelosi told moderate Democrats that the House would consider their top priority, a separate $ 1,000 billion bill to fund roads and other infrastructure projects, by September 27.
In what appears to be a mutual political suicide pact, progressives have threatened to vote against this bill unless moderates support the $ 3.5 trillion package the Liberals hold dear. Ideally, Democratic leaders would like to see the two bills passed together.
But with so many details hanging in the air, it seems highly unlikely that the broader social and environmental measure will be complete by then. This has raised questions about how Pelosi will keep her party’s antagonistic wings supporting the other’s priority bills and how she will lead both measures through to passage.
THE SECRET WEAPONS OF THE DEMOCRATS
Democrats have two advantages for them.
On the one hand, a failure of the effort would mean a blatant failure to implement their highest priorities, weakening their attempt to retain their majorities in Congress in next year’s election. Every Democrat knows it.
Another is Pelosi herself, who has proven to be adept at keeping Democrats together and getting the votes she needs.
House Budget Committee Chairman John Yarmuth, D-Ky., Summed up the two factors in an interview last week, describing what he told Democrats.
“I said everyone should take a stand and do their best to defend their priorities, but at the end of the day you’re going to vote for this thing,” Yarmuth said. “And by the way, have you met Nancy Pelosi?”