Biden unveils revised spending plan, exhorts Democrats to back it

Source: By Tony Romm, Sean Sullivan and Tyler Pager, Washington Post • Posted: Thursday, October 28, 2021

President Biden on Thursday unveiled a new $1.75 trillion package to overhaul the country’s health-care, education, climate and tax laws, muscling through a slew of policy disagreements and internecine political feuds that had stalled his economic agenda for months.

The announcement marked a critical moment in Biden’s tenure, prompting the president to pay a visit to Capitol Hill and call on Democrats to adopt the spending along with a second, roughly $1.2 trillion package to improve the country’s roads, bridges, pipes, ports and Internet connections.

“We spent hours and hours and hours over months and months working on this,” Biden said in televised remarks. “No one got everything they wanted, including me, but that’s what compromise is. That’s consensus, and that’s what I ran on.”

Biden’s moves reflected a pivotal decision to assume ownership of the sweeping safety-net proposal in a new way. He is investing enormous political capital in the new plan, following days of intensive, secretive meetings with key lawmakers, and ratcheting up his warnings that gun-shy Democrats risk damaging him and the party if they do not get on board.

“I don’t think it’s hyperbole to say that the [Democratic] House and Senate majorities — and my presidency — will be determined by what happens in the next week,” he told House Democrats in a closed-door meetings, according to one person in the room, who spoke on the condition of anonymity because of the sensitivity of the discussions.

The call to action appeared to galvanize some Democrats, and the $1.7 trillion framework soon generated praise — crucially from the party’s moderate and liberal ranks. One of the longtime holdouts, Sen. Kyrsten Sinema (D-Ariz.), quickly praised the deal, but without committing to vote for it.

“After months of productive, good-faith negotiations with President Biden and the White House, we have made significant progress on the proposed budget reconciliation package,” Sinema said in a statement. “I look forward to getting this done, expanding economic opportunities and helping everyday families get ahead.”

Sen. Joe Manchin III (D-W.Va.), the other centrist holdout, would say only, “In the hands of the House” when asked about the new framework in the Capitol on Thursday.

The proposal did contain some longtime Democratic priorities, including universal prekindergarten, new sums to combat climate change and additional taxes on the ultrawealthy. But it jettisoned other items, including a plan to provide paid leave to millions of Americans. The president made the cuts to satisfy Sinema and Manchin, who were concerned about overspending.

With a potential end to the logjam in sight, the framework prompted House Speaker Nancy Pelosi (D-Calif.) to move toward holding a vote on the companion infrastructure bill as soon as Thursday. That plan had been held up by House liberals who insisted on seeing an acceptable version of the safety-net plan first.

Pelosi cited the president’s planned travel to two global summits this week as a reason for swift action, suggesting that Biden’s credibility on the world stage would be undermined if his legislative agenda was mired down.

But forcing a vote on the infrastructure bill appeared politically risky. Liberal-leaning lawmakers reaffirmed an earlier threat that they would not vote for it unless they were satisfied with the safety-net bill, and in a closely divided Congress, their votes are pivotal.

Rep. Pramila Jayapal (D-Wash.), who heads the Congressional Progressive Caucus, said she expected liberal lawmakers to “enthusiastically endorse” Biden’s new plan. But without specific legislative language “there are too many ‘no’ votes for the [infrastructure bill] to pass today,” she said.

The architect of the original $3.5 trillion plan, Sen. Bernie Sanders (I-Vt.), similarly encouraged House Democrats to hold off on voting until “clear language” is finalized on the safety net bill with the support of 50 senators. He said he continues to work to advance issues including a more robust expansion of Medicare, but he also described the $1.75 trillion compromise as transformational, saying it is “the kind of legislation [that hasn’t] passed in Congress since the 1960s.”

Democrats are hopeful that another $100 billion will be included in the package for immigration measures, but this money could be excluded due to procedural issues.

With details of the bill still to be filled in, it was far from clear whether Pelosi and the White House could pressure liberals into reversing course and supporting the infrastructure bill Thursday. Biden, however, still projected confidence as he exited the roughly hour-long gathering with House Democrats.

“I think we’re going to be in good shape,” he told reporters.

Many of the components in the retooled blueprint originate in the proposals Biden put forward in the spring. The ideas correspond with promises the president and other Democratic candidates made in the course of the 2020 election, when Biden ran on a refrain to “build back better.”

But the policy framework that White House aides unfurled Thursday is a significant departure from the roughly $3.5 trillion that the president and many top party lawmakers initially sought. Downsizing that plan forced the president to jettison some of his priorities, although many lawmakers said Thursday that they have not yet given up hope.

Many of the cuts nonetheless reflected deep ideological divides among party liberals, who sought to spend aggressively, and moderates, who repeatedly in the debate have tried to dial back Democrats’ spending. While the shrinking size, from $3.5 trillion to $1.75 trillion, allows moderates to claim they significantly pared back the package, it also is certain to leave many liberals disappointed that they could not accomplish more.

Left-leaning lawmakers led by Sanders initially hoped to leverage their rare — if razor-thin — majorities in the House and Senate to reshape broad swaths of the U.S. economy. In the earliest days of the debate, they had even envisioned a $6 trillion package that they likened to the Great Society and New Deal programs of generations past.

But the party’s liberal bloc ultimately had no choice but to scale back some of its ambitions to assuage Sinema and Manchin. The duo demanded steep spending cuts and other policy changes in exchange for their votes in the Senate, which is divided 50-50 between the parties and where Vice President Harris would break any tie.

Thursday’s new framework includes prekindergarten programs that White House aides described as part of the largest one-time education investment since the creation of public high school. The $1.75 trillion plan also includes new aid to help families afford child care and extends tax credits that millions of parents are receiving in the form of monthly checks.

When it comes to health care, the White House plan expands Medicare to cover new hearing benefits. The plan would lengthen the life of tax credits that have helped roughly 9 million Americans afford health insurance purchased on the Affordable Care Act exchanges. And it would provide new tax credits to help roughly 4 million low-income people afford health insurance in a dozen states that have not expanded Medicaid under the ACA.

The White House has endorsed roughly $555 billion to address climate change, including tax changes that officials said would help the country reach Biden’s goal to halve carbon emissions by 2030. That part of the package is especially critical to the president as he takes part in a major global climate summit next week.

The new plan also sets aside roughly $100 billion for immigration, including to help cut the current case backlog.

In unveiling the details of its new spending plans, White House officials took great care to stress that the entire $1.75 trillion is financed in full. They aim to pay for the package through a variety of new tax policies, including newly proposed rules that require companies to pay a minimum 15 percent tax — seeking to address the fact some profitable, multinational corporations use creative accounting to lower their tax burdens to zero.

The idea is a significant departure from the rate increases Biden initially sought as part of a campaign pledge to unwind the tax cuts enacted under President Donald Trump in 2017. The White House also backed off a plan to apply a new billionaires’ income tax to roughly 700 Americans, including Amazon founder Jeff Bezos and Tesla founder and CEO Elon Musk. (Bezos owns The Washington Post.)

Instead, they proposed a special 5 percent rate for Americans with income above $10 million and an additional 3 percent surtax for those above $25 million.

A long slog still awaits lawmakers to turn their deal into a bill, then shepherd it through Congress, a fraught process where the Democrats’ slim majorities still leave little room for political error. Pelosi has just a three-vote margin, and Senate Majority Leader Charles E. Schumer (D-N.Y.) possesses only a tiebreaking advantage, meaning Democrats must stay together if they hope to deliver a package that Biden in recent days has described as transformational.

Mike DeBonis and Marianna Sotomayor contributed to this report.