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Five Biggest Issues Hitting Democrats As Budget Bill Talks Heat Up

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On President Biden’s domestic agenda, the White House and congressional Democrats are working to save a massive climate and social policy bill. With such a large bill and such tight margins, every member has red lines and demands.

The White House and senior Democrats in the House and Senate are attempting to bridge major ideological divides in order to save a massive climate and social policy bill, which is a key plank of President Biden’s domestic agenda. With such a large bill and such narrow congressional margins, every member has red lines and demands they hope to include (or exclude) from the final legislation.

The clearest battle lines have been drawn over certain key issues, and whether they can be resolved remains critical to the proposal’s ultimate passage.

Here are five hot topics of discussion among Democrats.

Healthcare

Dems are squabbling over the funding and duration of the bill’s three central healthcare provisions: an extension of expanded Affordable Care Act subsidies, Medicare coverage for dental and vision care and hearing, and an effort to provide health coverage for some people in Repub states that haven’t expanded Medicaid yet.

Speaker Nancy Pelosi has previously stated that all three of those priorities will be included in the final bill; however, if moderate Democrats push for a lower overall level of spending, this could become increasingly difficult to accomplish.

In the wake of a handful of centrist House members and Sen. Kyrsten Sinema (D-Ariz.) expressing their opposition to the main Democratic proposal for lowering prescription drug costs by giving Medicare the ability to negotiate drug prices with pharmaceutical companies, the healthcare puzzle has become even more complicated. Over the course of a decade, their plan could save as much as $500 billion, money that Democrats are counting on to pay for their Medicare, Medicaid, and Affordable Care Act plans.

Long-Term Home Care and Child Care

President Biden’s proposal included $400 billion in funding for home healthcare for the elderly and disabled. However, West Virginia Senator Joe Manchin, like other centrists, has voiced concerns about spending that much money. The House Energy and Commerce Committee has proposed a $190 billion expansion plan to assist the elderly and disabled staying in their homes, while Sen. Bob Casey (D-Pa.) has proposed a $250 billion plan. Progressives are concerned that an inadequately funded plan will fail to achieve its goals, and they are continuing to advocate for Presidents’s requested $400 billion.

Mr. Manchin has also called for means-testing for other new benefit programmes, such as child care tax credits, an expanded monthly Child Tax Credit (which already phases out above certain income levels), and free prekindergarten. Progressives argue that universal programmes are less likely to be cut in the future, and that adding barriers, such as work requirements or extra paperwork, would prevent the programmes from benefiting those need most.

Climate

The Clean Electricity Performance Program, which would pay utilities that switch to clean energy and penalise those that don’t, is the center point of Democrats’ plan to address the climate crisis. Utilities that increase their use of clean energy by 4% per year (as proposed in the current House bill) would receive federal funds, while those that do not would face a fine. Many progressives and environmentalists believe that this programme is the best way to decarbonize the electrical grid.

However, Senator Joe Manchin, the chairman of the Senate Energy and Natural Resources Committee, has questioned whether the plan is even necessary.

“The transition is happening. Now they’re wanting to pay companies for what they’re already doing,” Mr. Manchin said on CNN earlier this month.

“It makes no sense to me at all for us to take billions of dollars and pay utilities for what they’re going to do as the market transitions.”

Ms. Sinema, on the other hand, told the Arizona Republic on Thursday that she prioritises the bill’s climate provisions, citing the recent droughts and wildfires in her state and the West.

“Right now, we have the opportunity to pass smart policies to address it—looking forward to that,” she said.

Immigration

Democrats are looking for a way forward after the Senate parliamentarian ruled that they couldn’t include a path to citizenship for millions of illegal immigrants in the budget legislation. They claim to have prepared a number of additional measures that they intend to run by the parliamentarian to see if they can be deemed kosher under the arcane budgetary procedure Democrats must use to avoid a Republican filibuster.

One option they’ve considered is updating an immigration law known as the registry, which would allow anyone who arrived in the country before a certain date to become a legal permanent resident.

Taxes

Senior Democrats on the Senate Finance Committee and the House Ways and Means Committee have prepared a long list of options to pay for the spending, including tax credits that will increase the overall cost of the bill. Nothing has been firmly settled upon at this point, and for members who insist on paying the entire bill up front, agreeing on taxes is a prerequisite for deciding which programmes get funded.

Progressives and centrists disagree on a new corporate tax rate (anywhere between 21% and 26.5%), the top individual rate (probably between 37% and the old top rate of 39.6%), and whether to include measures to tax private-equity managers, capital gains, and supersized Roth IRAs used by the ultrawealthy.

Furthermore, several House members, primarily from higher-tax blue states, want to restore some or all of the state and local income-tax deduction, which Republicans limited to $10,000 in 2017. Many progressives are opposed to this idea because it would benefit the wealthy while adding costs to the bill that would have to be cut from other areas.

Image Credit: Al Drago via Getty Images

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