WASHINGTON — Democrats stepped closer to an agreement on President Joe Biden’s agenda as Sen. Joe Manchin, who has been pushing to shrink the size of a sweeping social-spending package, said a deal on the outlines of the plan is within reach this week.
Manchin’s expression of optimism Monday marked a turnabout from his forecast last week of drawn-out negotiations, and mark the best recent sign for Biden’s domestic agenda after months of intra-party wrangling over tax and spending increases.
Still, there were numerous parts of the plan still being negotiated as Democrats tried to find a compromise acceptable to moderates like Manchin and the party’s progressives.
“There’s just so many moving parts,” Manchin said after leaving a meeting with Senate Majority Leader Chuck Schumer and other Democrats later in the day. “Everyone is trying to deal in as good faith as they can to make this all happen.”
An agreement could allow the House this week to pass a separate, $550 billion bipartisan infrastructure bill. Progressive Democrats in the House have held up that legislation until there’s agreement within the party on the broader package, which includes spending on social programs and measures to address climate change.
“We want to have something to give our progressives confidence we will do both bills,” House Majority Leader Steny Hoyer said Monday evening. “We don’t have a timeline” for the infrastructure vote, he said.
Manchin said he hasn’t moved on his insistence that the overall price tag for the tax and spending package be limited to $1.5 trillion rather than the $3.5 trillion originally set out by Democratic leaders. And he indicated actual legislation is far from being drafted.
“Having it finished with all the ‘t’s’ and ‘i’s’ and everything crossed and dotted will be difficult from the Senate side, because we have an awful lot of text to go through,” Manchin said Monday morning. “But as far as conceptually, we should. I think a framework should be” feasible this week, he said.
Manchin is a pivotal player in negotiations on the tax and spending package along with Arizona Sen. Kyrsten Sinema, who also has raised objections to elements of the package. Both are key Democratic votes in the 50-50 Senate.
Manchin met on Sunday with Biden and Schumer in an effort to break a monthslong stalemate. Biden said Monday he hopes to get an agreement on the plan before he leaves Thursday for summits in Europe that include a UN climate change conference in Glasgow.
“It’d be very, very positive to get it done before the trip,” Biden told reporters.
Schumer said there are “three to four outstanding issues” that remain to be resolved on the tax and spending package. He said he wants to nail down the climate provisions before the president leaves for his trip.
One of the biggest issues still unsettled is how to pay for the package. Manchin, of West Virginia, had supported rolling back some of the Trump tax cuts for high earners and corporations, as Biden had proposed. But Sinema signaled her opposition to higher tax rates, turning focus to a so-called billionaires tax on assets. Manchin indicated he’s open to that idea.
The tax would apply to a wide variety of items like stocks, bonds, real estate and art, with gains in value taxed on an annual basis, regardless of whether or not the asset is sold. Annual decreases in value could also be deducted, according to a version of the proposal, which dates to 2019.
Senate Finance Chair Ron Wyden said after a meeting among key Senate Democrats, including Manchin, that the tax plan would be drafted in the “next two days.”
Other tax proposals in flux include a possible two-year suspension of the $10,000 cap on state and local tax deductions, the imposition of a minimum corporate income tax and a stock buyback tax.
On healthcare policy, Manchin indicated there are still differences between him, Biden and progressive Democrats. Manchin has resisted expanding Medicare to include dental, hearing and vision benefits. He said Monday that because the program faces insolvency in five years it shouldn’t be expanded without addressing deeper fiscal problems.
“You’ve got to stabilize that first before you do an expansion,” he said. He also said he is opposed to a proposed expansion of Medicaid eligibility to states which have so far refused to expand the program, because states like West Virginia would still be paying part of the costs while the newly eligible states would get a free ride.
“The problem I have with that one is right now we’re paying 90/10. For states that held out to get rewarded with 100%, that’s not fair,” he said.
Manchin and Sinema have been using their leverage to force changes in the plan.
Manchin’s opposition to Biden’s “Clean Electricity Performance Program,” a centerpiece in the climate provisions, has caused that $150 billion item to be dropped.
He said Monday he is working with Biden to bolster renewable energy tax credits and incentives for energy efficiency.
Many of Biden’s original priorities appear on track to remain in the package, but at a shorter duration than originally proposed. These include Affordable Care Act premium subsidies, universal prekindergarten, renewable energy tax credits, earned-income tax credit expansion, housing rental vouchers and mortgage assistance and clean water funds.
