HomePoliticsHere's How The Democrats' Grand National Agenda Bill Has Shrunk

Here’s How The Democrats’ Grand National Agenda Bill Has Shrunk

WASHINGTON — Call it the incredible domestic policy initiative that is winding down.

As Democrats scramble to salvage parts of President Biden’s sweeping tax, climate change and social policy package this summer, their negotiations have highlighted just how substantially they have had to curb their ambitions by bowing to political realities and economic changes.

What was once a transformative cradle-to-grave social safety net plan that some liberals said they envisioned spending as much as $6 trillion, with free preschool, affordable child care, paid national leave and major new programs to curb the climate change, is now emerging as a roughly $1 trillion proposal with few such components.

Even the prospects for a package of that size are in doubt as Senators Chuck Schumer, a Democrat from New York and Majority Leader, and Joe Manchin III, a Democrat from West Virginia, haggle over the details of revamped legislation that so far aims to reduce the cost of prescription drugs and the reduction of the national debt.

Talk continues over whether to incorporate other longtime Democratic priorities, including tax increases, some climate and energy provisions and an extension of the expanded Affordable Care Act subsidies.

The drastic reduction has been driven by slim majorities in the party and Manchin’s refusal to accept some of his colleagues’ costlier plans. But it also reflects the demise of a brief but powerful political consensus that emerged at the start of the coronavirus pandemic in favor of unrestricted domestic federal spending and a strong government role in tackling the nation’s problems. With inflation and other economic concerns mounting ahead of the midterm elections, Democrats are poised to drop their desire to enact new federal initiatives this year for a limited package.

Here’s a look at how and where the Democrats’ domestic legislation has been cut.

How it started: In his budget last year, Mr. Biden proposed expanding Medicare to cover dental, vision and hearing benefits, a proposal estimated to cost an estimated $350 billion over a decade, and some progressive Democrats had hoped to go even further, lowering the age of eligibility to 60 years. 65 in a change that would have cost $200 billion.

how he shrunk: When the House passed its version of the $2.2 trillion bill in the fall, it included $165 billion to cover the Medicare hearing, to lower health care premiums for people who are covered by the Health Care Act to Low Price and to provide insurance to another four million people through Medicaid.

Where is he now: Talks have now focused on whether to include an extension of expanded Affordable Care Act subsidies, which were enacted in March 2021 as part of the $1.9 trillion pandemic relief plan and are set to expire at the end of year.

Democrats also launched a plan aimed at lowering the cost of prescription drugs that would for the first time allow Medicare to regulate prescription drug prices directly, according to a draft presented this month to top Senate officials. It would cap the out-of-pocket amount Medicare patients can be asked to pay for prescription drugs at $2,000 each year and restrict how much pharmaceutical companies can raise prices.

How it started: President Biden, who promised the United States would reduce its emissions to at least 50 percent below 2005 levels by the end of the decade, called for a variety of climate proposals, including a ban on offshore drilling and establishing of a Civil Climate Corps.

how he shrunk: Mr. Manchin, a conservative-leaning Democrat from one of the nation’s top oil and gas-producing states, opposed many of the climate provisions, including the most important measure, a program that would have replaced those that work with coal and gas. power plants with wind and solar energy. The House-approved plan set aside $555 billion for programs designed to reduce fossil fuel emissions.

Where is he now: Democrats are discussing a smaller energy and climate package. If enacted, it could still be the largest single action ever taken by the United States to address climate change. It would likely target about $300 billion in tax incentives for buyers and producers of wind, solar and nuclear power. The largest amount previously set aside to combat climate change at any given time was about $80 billion, as part of the 2009 stimulus package.

Negotiators are also discussing tax incentives for the purchase of electric vehicles and a provision to curb emissions of methane, a powerful planet-warming pollutant that seeps from oil and gas wells. Mr. Manchin has also expressed concern about those proposals.

How it started: Legislation passed by the House included proposals to provide up to four weeks of federal paid family and medical leave and universal pre-kindergarten, as well as billions of dollars for financial aid for college, child care and housing support. It also included an extension of expanded monthly payments to families with children, which expires at the end of 2021.

how he shrunk: Mr. Manchin opposed many of the programs and privately indicated to Mr. Schumer in a memo last summer outlining his stance in the multi-million dollar package that, at the very least, wanted to put them to the test, limiting them to only the Americans who needed them most.

Where is he now: With Democrats seeking to limit spending to no more than half of the emerging $1 trillion plan, it’s unlikely any of those proposals will be included.

How it started: Democrats had grand ambitions to use the package not only to generate revenue for domestic spending, but also to make the tax code fairer by vastly raising taxes on the wealthy. The package approved by the House of Representatives would have been paid for with substantial tax increases on corporations and high-income individuals, estimated to generate nearly $1.5 trillion over 10 years. And Democrats had initially planned to roll back key components of the tax cuts that Republicans pushed through in 2017.

how he shrunk: Senator Kyrsten Sinema, the centrist Democrat from Arizona, resisted the plan to raise most tax rates for corporations and wealthier individuals. (Ms. Sinema backed other tax increase ideas, though some were rejected by other senators.)

Where is he now: Senate Democrats have coalesced around a plan to raise taxes on some high-income Americans by imposing an additional 3.8 percent tax on income earned from owning a piece of what is known as a transfer business, such as a law firm or doctor’s office. . The money would then go to extend the solvency of the Medicare trust fund that pays for hospital care, which will currently start running out of money in 2028, through 2031, officials said.

Negotiators are also discussing bolstering the Internal Revenue Service’s enforcement capacity as a way to raise billions of dollars, as well as some minimal taxes on corporations while they finalize the remaining proposals. But the revenue portion of the package has been one of the toughest pieces for Democrats to negotiate, and officials warned the contours could still change.

Some grassroots Democrats have begun to express dismay about raising taxes at all, facing a series of Republican attacks that the proposals would endanger small businesses and middle-class Americans already reeling from inflation.

A small group of Democrats, mostly from high-income communities in states like New York and New Jersey, have also renewed their push to include an expensive proposal that would increase the federal tax deduction for state and local taxes. The House plan raised the so-called SALT cap set in the 2017 tax law from $10,000 a year to $80,000, though its cost is likely to preclude its inclusion.

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