Democrats seemed to move further apart over the course of the last 24 hours, laying bare the very real risk that President Joe Biden will fall short in his effort to secure an agreement before he arrives on the global stage later this week.
In private meetings from the Oval Office to House Speaker Nancy Pelosi’s office, the message delivered to key Democrats was that the time was now for an agreement, and despite the complicated nature of things, a path could be — must be — secured this week.
It seems a long way off at the moment, on both policy and procedural grounds. But there’s one big push to come, officials and aides say.
The bottom line is that Democrats need to make policy decisions on the most complicated and fraught issues on Wednesday if they want any type of pathway to meeting Biden’s goal. Period. Given where lawmakers were throughout the day Tuesday, that still appears a long way off.
What to watch Wednesday
Biden’s schedule is largely open by design, officials say. Scheduled to depart for Rome on Thursday, the expectation is lawmakers will be heading back to the White House on Wednesday.
For days officials have privately hinted at the possibility of Biden heading to Capitol Hill — with the caveat that it would only happen if a deal is within reach — and if Democratic leaders thought it would help boost the process.
About the deadline
White House officials have been clear it was always a possibility Biden would arrive at the G-20 and the United Nations Climate Conference empty handed. and that it doesn’t mean things have broken down, or would be dead, just delayed. Yet again.
But it’s Biden, in private meetings, who has repeatedly not sugar-coated his view of the stakes — and what it would mean for him to arrive at COP26 in particular without an agreement in hand.
That looms over every minute of the next 24 hours for Democratic lawmakers.
The two things that matter
For the fluid nature of one of the most sweeping and fundamentally transformational legislative proposals in decades, it can be difficult to pin down exactly *what* matters in any given moment. The truth is it all does.
But in this moment, two things matter most:
- What progressives need to see in order to agree to vote for Biden’s $1.2 trillion infrastructure proposal?
- Can Biden and Democratic leaders secure — or get within striking distance of – #1 with Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, two centrist Senate hold-outs, in the next 24 hours?
That’s the ballgame.
With that in mind
That is precisely why Biden met Tuesday night privately — and without any notice or White House public acknowledgment — with Sinema and Manchin. The message, at least in part, that came from Biden, according to one source with knowledge: What will it take, because things need to be closed out now.
Beyond the overarching message, there was an extensive policy discussion as well, the source said.
The sticking points
The topline number
- How to expand Obamacare in 12 states that didn’t expand Medicaid
- Medicare expansion to dental, vision, hearing
- Prescription drug negotiations
- Climate policy (funding will be around $500-$600 billion)
“The Senate needs to start saying yes or no on issues and stop f—— talking,” Democratic Rep. Jimmy Gomez of California said yesterday.
Speaking of the House
Many members in the House feel like their chamber is in a holding pattern right now as the Senate figures out what they need to do to assuage Sinema and Manchin. But, that feeling is giving way to tension within their own ranks as Pelosi has begun making it clear that the House may need to take and pass whatever the Senate comes up with.
Over the course of the last 24 hours, the speaker’s message to her caucus has been realistic: This isn’t all we wanted, this isn’t all we campaigned on. But, it is major change. It’s something for the President and for us, and the House is limited by the willingness of just a few in the Senate to give. Does Pelosi clearly think her chairs’ proposals are superior? Pelosi trusts her chairs implicitly. Is she going to block a bill that comes from the Senate because it isn’t identical to what the House came up with? No.
One thing Pelosi is going to have to deal with
House Progressive Caucus Chair Pramila Jayapal, a Washington Democrat, borrowed from her playbook last month when she told reporters this week she wanted votes on the bipartisan infrastructure bill and the social safety net bill to happen in tandem, close together and that a framework wasn’t going to be enough.
The speaker told CNN in no uncertain terms Tuesday that she disagreed with that assessment. The White House does as well, according to multiple officials.
Once again, Pelosi has the exact standoff on her hands that caused the House to have to punt on passing the bipartisan infrastructure bill. Even if a framework is reached soon, and that is a big “if” right now, a vote on the bill in the Senate could take several more weeks to happen. Enacting new programs requires careful legislative writing and details will need to be hashed out.
By saying she needs a vote, Jayapal may be hoping to speed this process along, but she may end up dragging it out for many more weeks if she really has the backing of dozens of progressives.
The noise, turmoil and very real policy knots Democrats found themselves in throughout Tuesday made it easy to miss something else that’s quietly happening: Pieces of the plan are coming together. They may not be the biggest or thorniest of pieces, yet slowly but surely, negotiators are starting to close out — or on the verge of closing out — major elements of the package.
Despite losing a cornerstone piece of Biden’s original proposal due to Manchin’s opposition, Democrats are coalescing around a proposal to expand grants and loans to manufacturing, industrial and agricultural sectors to incentivize the shift to clean energy providers. There is a similar grant and loan provision targeting rural co-ops. New refundable home improvement tax credits for utilizing solar and other renewable energy sources are also in.
In full, the climate portion of the bill is coming in at above $500 billion, sources said, making it the single largest component of the package and the largest climate change proposal in US history by several factors. To be clear, it’s not a done deal. But Democrats on both sides of Pennsylvania Avenue are confident an agreement is within reach.
Universal pre-kindergarten and childcare
A critical two pieces of the “care” component of Biden’s initial proposal, Democrats have never wavered on their intent to maintain robust universal pre-K and childcare proposal. Yet both are complicated structurally, and expensive, leaving them subject to being pared back as the overall scale of the plan slimmed down.
But sources say negotiators are within striking distance of a final agreement on one of the largest pieces, in terms of funding, in the whole package. The two components end up roughly around $350 billion, one of the sources said.
Corporate minimum tax
Sinema is on board. Manchin appears behind it. The White House has fully endorsed it. And with that, it appears Democrats have identified at least one key revenue source to put in place of increased marginal tax rates.
The 15% corporate minimum tax isn’t a done deal yet, but has clear momentum in the desperate scramble to pay for the proposal.
Medicaid coverage gap
Democrats have crafted a new proposal, centered primarily on boosting Obamacare subsidies, to cover the Medicaid coverage gap in states that didn’t pursue expansion. This is, to put it bluntly, a huge issue for Democrats, particularly the two Georgia senators and Congressional Black Caucus.
Manchin has been opposed on the grounds that states should not be rewarded for not taking the expansion. This proposal is way to work around that. Manchin hasn’t agreed yet, but it’s been made abundantly clear that a resolution here is needed — and sources say this is likely the best option.
Another major issue, with Biden already agreeing to scale back his 12-week proposal to four weeks … and that still not being enough for Manchin. But Manchin and Sen. Kirsten Gillibrand, a New York Democrat who is one of the leading advocates and negotiators on the issue in Congress, are fully engaged on a compromise proposal. It’s not clear that it will come together, but the talks are real and happening.
The billionaire’s income tax
One of the hottest issues on Capitol Hill for several days has been the looming release of an annual tax on unrealized gains in the assets of billionaires. Fascinating, complicated and accompanied by an endless array of questions.
The real work of seeing if it’s viable starts Wednesday (and to be clear, it’s viability is very, very in question right now given Democratic objections, some public, more private.)
This proposal has been in the works for roughly two years. It’s incredibly complicated and untested. It assumes a lot of things, for example, about being able to find, identify and track the assets of America’s wealthiest individuals, which are often layered in trusts and pass through entities and tied up in investments.
For tradeable assets, billionaires would pay every year on gains they made even if they don’t sell those assets. And, once the tax is enacted, billionaires would be given five years to pay up front on tradeable assets they have that has appreciated. The tax would also require a tax at the time of sale on non-tradeable assets like homes and businesses, but the individual wouldn’t just pay a capital gains rate. Instead, they would also pay an interest fee on every year they had held the asset.
If you are lost, if you are confused, just imagine what Wyden has to explain this to 50 senators Wednesday and convince the House Democratic caucus this is a better idea than their fully fleshed out tax bill they marked up for days and passed out of committee.
Therein lies your problem.
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