Democrats are facing tough choices as they grapple with how to make good on their promise to deliver a sweeping social spending.
The high balancing act is testing Democrats’ razor-thin majorities and putting a spotlight on long-dormant divisions. This is a little bit like a Rubik’s cube on steroids. Mark Warner (D-Va.) about the state of play.
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Where Democrats land on the top-line figure is a decision that will affect everything else in the bill, forcing lawmakers to either scale back their ideas or drop some entirely. Progressives, including Senate Budget Committee Chairman Bernie Sanders (I-Vt.) and Rep. Pramila Jayapal (D-Wash.), argue the bill must stand at $3.5 trillion, which they view as a compromise from their initial $6 trillion goal.
Moderate Sens. Kyrsten Sinema (D-Ariz.) and Joe Manchin (D-W.Va.) say it has to be smaller and that they won’t support a $3.5 trillion bill. Some members of leadership are opening the door to going lower, with Sen. Dick Durbin (D-Ill.) acknowledging that $3.5 trillion “may not be the end point.”
Democrats are also debating how much to focus on Medicare versus boosting Medicaid and shoring up the Affordable Care Act.
The House bill creates a new federal health insurance program to provide Medicaid coverage in the 12 states that didn’t expand it under former President Obama’s health care law. Senate Democrats haven’t yet decided whether to take the House approach amid pushback within the caucus about potentially rewarding states that didn’t expand Medicaid earlier. Another, potentially faster, option under discussion would be to use the already established ObamaCare insurance markets to get more people covered.
Democrats are also split over how to provide more vision, dental and hearing coverage through Medicare. For example, the House bill would start the dental benefits under Medicare in 2028, something Sanders believes is too slow.
A rebellion from three House Democrats against a prescription drug plan is foreshadowing bigger headaches awaiting Biden and Democratic leadership on the key provision.
Democratic leaders are vowing that the final bill will allow the government to negotiate with drug companies to lower the prices for prescription medications. The plan is crucial because the savings expected to be generated could help cover the costs of other pieces of the spending bill’s health care provisions. But House moderates have warned that the drug pricing plan has little chance in the 50-50 Senate, where Democrats face no room for error, and instead have pitched a narrower bill. The broader plan, which is backed by House leadership, has already raised hackles among some Senate Democrats, and the pharmaceutical industry is now ramping up its attacks, which would build pressure on lawmakers.
The House Energy and Commerce Committee included a Clean Electricity Payment Program, which incentivizes transitioning to clean energy, in its portion of the spending bill, and Democratic senators who support the policy have been working behind the scenes to ensure it gets into their version of the bill. But they are facing a stumbling block in the form of Manchin, who chairs the Senate Energy and Natural Resources Committee and is tasked with drafting some of the clean energy and climate provisions.
Manchin, during an interview with CNN, argued that the transition to clean energy “is happening” and so it “makes no sense” to use taxpayer funding. Manchin has been cagey about if he’ll offer his own version of the program, telling reporters that he wasn’t “going to negotiate this in the press.”
Democrats need to come to an agreement on how high to go with taxes, including where to set the corporate tax rate after Republicans used their 2017 bill to drop it from 35 percent to 21 percent.
Biden, as part of his plan, pitched a 28 percent corporate tax rate. That’s not going to happen, but the question is how much lower will congressional Democrats go and how much revenue will it cost them. House Democrats are pitching a 26.5 percent corporate tax rate, but that’s in flux in the Senate. Manchin and Warner, whose votes Senate Majority Leader Charles Schumer (D-N.Y.) needs, have both signaled that they want the rate to be at 25 percent.