Both have reportedly agreed to support a billionaires’ tax. Sinema had objected to the financing plan to raise $600 billion for the package by reversing the Trump tax cuts for corporations and the rich. So now Senate Finance Chair Ron Wyden, an Oregon Democrat, is rushing out a proposal he’s been working on for a few years to tax the investment incomes of the 1,000 or so wealthiest Americans, those with at least $1 billion in assets. That should be unveiled this week. It would require people either holding more than $1 billion in wealth or earning more than $100 million in three consecutive years to pay taxes on their assets.
But there’s still nearly $2 trillion worth of cuts from Biden’s original vision and the original working agreement among leadership, thanks to Manchin and Sinema. So committee chairs, leadership, and the White House are scrambling to salvage what they can. Thus far, the one definite casualty is two years of free community college. That won’t be happening. In return for giving that up, Democrats should demand Biden cancel student debt, but that probably won’t happen either.
Still hanging by a thread is one of the most consequential programs of the young Biden administration—the child tax credit expansion. The families of 60 million children have received as much as $300 a month per child for the last several months, thanks to the expansion of the program in the COVID-19 relief bill passed in March. Democrats planned to make that program permanent for the next four years. It’s been carved down to just one year. Manchin is still fighting to further cut it, either through means-testing or work requirements. As of now, families earning up to $150,000 get the full credit, at which point it phases down. It has cut child poverty in half, just this year.
It should survive in a one-year extension and Biden has rejected Manchin demands for work requirements. Democrats believe even the one-year extension will help cement the program permanently, even if Republicans retake Congress in next year’s midterms. “Imagine you’re a Republican politician running for office next year, and a voter from Lima, Ohio, comes up and says, ‘That child tax credit has really changed my life and made my life a lot better,’” Ohio Democratic Sen. Sherrod Brown postulates. “What are you going to do? Are you going to cancel? I think that speaks for itself.”
The child care component of the bill remains a key priority. In writing the original package, Democrats had $450 billion for universal preschool and funding to subsidize child care for parents and increase pay for child care workers. The plan was to give states funding to expand these programs over a number of years, a plan nearly 80% of voters support. Lawmakers are still working on that one, potentially setting an expiration date for federal support to states. That could doom the program entirely, setting up a scenario like we’ve seen in the Medicaid expansion under the Affordable Care Act, in which states use the expiration date as a reason to not participate at all.
Also barely hanging in is Medicare expansion. Progressives originally wanted to increase eligibility for Medicare to people age 60 or even 55. That got whittled down to the extremely worthy goal of adding dental, vision, and hearing benefits to the program. Now it looks like dental benefits, the most expensive of the three are going to be substantially pared down to an $800 annual voucher for dental work. That’s better than nothing, but not as good as full coverage.
Paid family leave is also getting stripped down, and potentially out. Originally the White House aimed for 12 weeks of family and medical leave for every U.S. worker, including gig and self-employed workers. That’s down to four weeks for lower-income workers, and could expire in three or four years. Pelosi said Sunday that it is “our hope” that it can stay in the package.
Probably gone is Medicare drug price negotiating, thanks to Sinema and a handful of House conservative Democrats. One possibility is that only drugs in the Medicare Part B program that hospitals or providers administer—vaccines, IV drugs—can be negotiated, or just drugs that have expired patents. So there’s another wildly popular idea circling the drain.
Biden’s $400 billion vision for expanding home health care to elderly and disabled people has been slashed in more than half and could face more cuts and an expiration date. Beefed-up Obamacare subsidies from the COVID-19 package, now set to expire next year, could be extended for another three of four years, rather than be made permanent. Likewise, efforts to create a federal plan to cover the 2 million or so people caught in the Medicaid gap in the states that refused to expand under Obamacare could be reduced from a permanent program to a three-year one.
Housing aid could be cut from the original $327 billion to $150-175 billion. The funding is intended to repair and weatherize public housing stocks, provide more funding for vouchers for seniors and disabled for private housing, and provide down payment assistance. The House is fighting hard to keep this funding, the White House reportedly wanted to cut it to $100 billion.
With Biden headed to the global climate summit in Glasgow at the end of the week, leadership is scrambling to find a way to meet Biden’s goal of reducing greenhouse gas emissions by at least 50% in the next 8 years. Manchin killed the ambitious and effective plan to green the nation’s electrical grid. How they get to Biden’s goal—this week—is still an unknown.
All this means that Pelosi’s stated goal of having a vote on the bipartisan hard infrastructure deal is—and should be—in question. The impetus is the exporting of federal highway funds on October 31, but that is an easy extension to make. It should not be driving bad compromises in the larger bill, and House progressives should continue to insist that the two bills—the bipartisan and fossil-fuel laden hard infrastructure bill from the Senate and the big human infrastructure bill—move together.
We’ve seen an ongoing game of whack-a-mole between Manchin and Sinema raising issues with the larger package. When one of Manchin’s gets resolved, Sinema pops up with another one. The goal seems clear: keep creating delays on the larger infrastructure package until they’ve worn everybody down, and they agree to just passing the bipartisan bill to get something, anything done.