Biden’s spending sparks Democratic divide
The President makes bid to unite his warring party on investment plans ahead of the midterm elections
‘The political reality is clear. It’s time for Democrats to unite in finding the path forward’
‘What’s at stake is … whether we’re going to sit back and let them embed socialism in the institutions of our government’
DEMOCRATS will lose control of Congress in midterm elections next year unless Joe Biden scales back his massive spending plans, senior figures in his own party warned.
The US President’s entire domestic economic agenda hung in the balance last night as he spent the day summoning senior Democrats to the White House in a bid to get them to agree on it.
In a video released on Twitter, Mr Biden called on the warring wings of his own party to unite around his plan, saying: “The time is now.” Mr Biden has proposed a $3.5trillion overhaul of the social safety net, including investments in healthcare and education, which would be paid for by tax hikes on companies and wealthy Americans.
But John Podesta, Bill Clinton’s former chief of staff, and a highly influential Democrat figure, said Mr Biden would have to face the “reality” that it would not be passed by Congress, and reduce the price tag.
In a memo to every Democrat in Congress, Mr Podesta said: “The political reality is clear. Given Democrats have no margin for error in the Senate and a limited margin in the House, we will not secure the full $3.5trillion investment. It’s time for Democrats to unite in finding the path forward.”
He added: “Nothing will guarantee a political reckoning [in midterm elections] faster than if the Democrats fail to pass anything.”
Mr Biden faced particular objection to the scale of his spending proposals from two moderate Democrat senators, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona.
By contrast, left-wing Democrats in Congress have said they will not accept any reduction in the size of the plan.
In a flurry of activity at the White House yesterday Mr Biden met with two dozen Democrat politicians in the Oval Office, including Nancy Pelosi, the House Speaker, and Chuck Schumer, the Democrat leader in the Senate.
He met separately with a group of left-wingers, led by Senator Bernie Sanders, and a moderate group including Mr Manchin and Ms Sinema.
Doubt over the future of his spending plans came as Mr Biden faced another looming crisis, the possibility of a government shutdown.
On Tuesday, the House of Representatives passed a bill 220-211, along party lines, to approve funding the government until December 3. However, if that bill fails to pass the Senate, the US government would shut down at the end of the fiscal year on September 30.
The Senate is split 50-50 with the vice president, Kamala Harris, holding a casting vote.
Mitch Mcconnell, the Republican leader in the Senate, made clear he would use a procedure that would require 60 votes for passage.
He intends to make the vote on continuing to fund the government a referendum on Mr Biden’s spending proposals, forcing the President to scale them back.
A government shutdown would be the third in a decade, and if it lasted until mid-october the US would risk defaulting. That could crash financial markets, lead to the loss of millions of jobs, and spark a recession.
Mark Zandi, chief economist at Moody’s Analytics, said: “This economic scenario is cataclysmic.”
Moody’s warned it could lead to the loss of six million jobs and destroy onethird of the value of the stock market.
Democrats say the debt ceiling should not have anything to do with Mr Biden’s $3.5 trillion economic agenda.
Mr Schumer accused Mr Mcconnell of “engaging in fantastical feats of sophistry” by linking the two.
But Republican senator Kevin Cramer said: “What’s at stake is ... whether we’re going to sit back and let them [Democrats] embed socialism into the institutions of our government.”