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Dems Tackle Taxes, Health, Climate     09/18 10:38

   Revamp the tax code and important federal health care and environment 
programs. Spend $3.5 trillion over 10 years, but maybe a lot less. Ensure that 
no more than three Democrats in all of Congress vote "no" because Republicans 
will be unanimously opposed. That's what congressional Democrats face as they 
try writing a final version of a massive bill bolstering the social safety net 
and strengthening efforts to tame climate change.

   WASHINGTON (AP) -- Revamp the tax code and important federal health care and 
environment programs. Spend $3.5 trillion over 10 years, but maybe a lot less. 
Ensure that no more than three Democrats in all of Congress vote "no" because 
Republicans will be unanimously opposed.

   Try to finish within the next couple of weeks. And oh yes: Failure means 
President Joe Biden's own party will have repudiated him on the cornerstone of 
his domestic agenda.

   That's what congressional Democrats face as they try writing a final version 
of a massive bill bolstering the social safety net and strengthening efforts to 
tame climate change. Here's a guide to some pivotal differences they must 
resolve:

   PRICE TAG

   The White House and top Democrats compromised on a $3.5 trillion, 10-year 
cost for the bill. That's a huge sum, though a fraction of the $61 trillion in 
federal spending already slated over that period.

   Moderates led by Sens. Joe Manchin of West Virginia and Kyrsten Sinema of 
Arizona have said $3.5 trillion is too expensive, and votes from every Democrat 
in the 50-50 Senate are mandatory for success. Biden, House Speaker Nancy 
Pelosi, D-Calif., and Senate Majority Leader Chuck Schumer, D-N.Y., have 
recently acknowledged what seems inevitable: The final cost may have to drop.

   Manchin has suggested limiting the total to $1 trillion to $1.5 trillion, 
which progressives reject as paltry. Led by Senate Budget Committee Chairman 
Bernie Sanders, I-Vt., they initially said at least $6 trillion was needed for 
serious efforts to help families and curb global warming.

   Eventually a compromise will be reached, with some expecting it in the $2 
trillion to $2.5 trillion range. But since House committees just finished 
crafting a $3.5 trillion version of the package, a smaller price tag means some 
priorities would have to be trimmed.

   TAXES

   To pay for much of the bill, the House Ways and Means Committee approved 
$2.1 trillion in tax boosts, mostly on the rich and corporations. Some details 
and numbers seem likely to change.

   Biden, who's promised to not increase taxes on people earning under 
$400,000, will probably get his proposal to raise the top individual income tax 
rate on the richest Americans to 39.6%. That would be up from 37% approved 
under former President Donald Trump.

   But Democrats also want to raise other levies on the wealthiest. It's 
unclear which proposals will survive and in what form.

   For example, Senate Finance Committee Chairman Ron Wyden, D-Ore., has 
expressed interest in boosting taxes on the value of some large estates that 
heirs inherit. Ways and Means Chairman Richard Neal, D-Mass., omitted that from 
his panel's plan.

   Democrats want to provide tax credits for children, health care and child 
care costs and low-income workers. If the bill's size shrinks, Democrats might 
save money by delaying, gradually phasing in or out or limiting some of those 
breaks. Some moderates say a proposed tax credit for buying electric vehicles 
shouldn't go to higher-earning people.

   Biden wants to raise the 21% corporate tax rate to 28% but may have to 
settle for around 25%. Democrats face other differences over taxes on corporate 
foreign income and stock buybacks.

   MEDICARE

   Three moderate Democrats blocked a House committee from approving a top 
priority for Biden and progressives: saving hundreds of billions by letting 
Medicare negotiate lower prices for pharmaceuticals it buys. Another committee 
approved the language, so it's not dead.

   Still, the plan is opposed by drug manufacturers and some moderates want to 
water it down.

   Democrats planned to use the savings to pay for another progressive goal: 
new dental, vision and hearing Medicare coverage. If the drug-pricing language 
is diluted and produces less savings, it's unclear how the Medicare expansion 
would be financed.

   SALT AND IRS

   In a town that loves acronyms, SALT, shorthand for state and local taxes, is 
on the table.

   Democrats from high-tax coastal communities are demanding an increase in the 
current $10,000 limit on deductions taxpayers can claim for state and local 
taxes they pay.

   With Pelosi unable to afford losing more than three Democratic votes, many 
think that deduction ceiling will be increased. To make up for the lost 
revenue, the IRS could be given extra money or banks might be required to 
report more financial transaction information to the IRS, ideas aimed at 
bolstering tax collections.

   OTHER PRIORITIES

   The House has proposed grants for power companies that move toward renewable 
fuels and fines on those that don't, a pillar of the chamber's climate change 
agenda. Manchin, chairman of the Senate energy committee and a fierce defender 
of his state's coal industry, has told colleagues he opposes that.

   The House has proposed a plan for mandatory family leave that's 
significantly costlier than what Senate Democrats envision. And lawmakers await 
a decision from the Senate parliamentarian on whether language helping millions 
of immigrants remain in the U.S. violates budget rules and must be omitted.

   TIMING

   Last month, Pelosi told moderates that the House would consider their top 
priority, a separate $1 trillion bill financing road and other infrastructure 
projects, by Sept. 27.

   In what seems a mutual political suicide pact, progressives have threatened 
to vote against that bill unless unenthusiastic moderates support the $3.5 
trillion package. Ideally, Democratic leaders would love for both bills to be 
voted on together.

   With so many loose ends, it seems highly unlikely the $3.5 trillion measure 
will be finished then. That's raised questions about how Pelosi will keep her 
party's antagonistic wings supportive of each other's priority bills and how 
she will shepherd both to passage.

   DEMOCRATS' TWO SECRET WEAPONS

   For one thing, a collapse of the effort would mean a jarring failure to 
enact their highest priorities, weakening their bid to retain their 
congressional majorities in next year's elections. Every Democrat knows that.

   Another is Pelosi herself, who's proven deft at holding Democrats together 
and squeezing out votes she needs.

   House Budget Committee Chairman John Yarmuth, D-Ky., cited both factors in 
an interview last week, describing what he tells Democrats.

   "I've said everybody should be posturing and doing the best you can to stand 
up for your priorities, but in the final analysis you're going to vote for this 
thing," Yarmuth said. "And by the way, have you met Nancy Pelosi?"

 
 
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