The Washington Post

Divides cloud budget package

$3.5 TRILLION BILL FACES MORE CUTS Democrats jockey over priorities, what to scrap

- BY SEAN SULLIVAN, MARIANNA SOTOMAYOR, TYLER PAGER AND JEFF STEIN

As top Democrats hashed out a plan this summer for a historic expansion of the social safety net, Sen. Bernie Sanders privately struck a deal with White House officials and Majority Leader Charles E. Schumer that is now having major ramificati­ons.

Sanders (I-VT.), a self-described democratic socialist, agreed to support a $3.5 trillion package — much smaller than he wanted — in exchange for a promise that more than a tenth of the money, at least $380 billion, would go toward his longtime goals, chiefly expanding Medicare to cover hearing, vision and dental care.

That deal, described by a person with direct knowledge of it who, like some others in this article, spoke on the condition of anonymity to describe sensitive negotiatio­ns, is looming heavily over the tense negotiatio­ns on the bill’s final shape. At the insistence of centrist Democrats, the bill faces more big cuts, with some demanding it shrink to $1.5 trillion. Democrats have given themselves only a few weeks to finalize its contours — forcing painful decisions in coming days on which parts of their long-awaited agenda to sacrifice, from education to health care to climate.

While the White House and Schumer (D-N.Y.) may be backing Sanders’s Medicare expansion, a House committee recently embraced a plan that appeared to devote fewer resources to it than

Sanders wants, foreshadow­ing the fights to come.

“There’s more good things that we want to get done than there is revenue to do it,” said Sen. Christophe­r A. Coons (D-del.), a close Biden ally. “There are hard choices. That’s the point of this month.”

And the stakes are unusually high. Strategist­s in both parties believe Democrats are likely to lose the House and possibly the Senate next year, so this could be the party’s only chance in years to enact an expansive domestic agenda. The finished product will become the clearest picture of what today’s Democrats stand for, supplantin­g the countless speeches, platforms and 10-point plans they delivered when out of power.

The strains have come into sharper focus over the past week as several House committees started hammering out specifics. And for three figures at the center of the tumult, the pressures are especially heavy — President Biden, 78; House Speaker Nancy Pelosi (D- Calif.), 81; and Sanders, 80. For all three, this could be the final chance for a crowning legacy after decades of political battle.

While aligned on the larger aim, the three diverge on some particular­s, according to Democrats with knowledge of the talks. Biden is pushing programs whose benefits voters can easily grasp, according to aides and friends, such as universal prekinderg­arten and free community college. Biden and his aides are also increasing­ly focused on climate change.

“It is certainly true that the president is focused on having government deliver in a way that people can see and feel in their lives,” said Mike Donilon, a senior White House adviser and one of the president’s closest aides.

Sanders, who has played a unique role on the American left for 40 years, is heavily invested in expanding Medicare. A longtime champion of a Medicare-for-all plan, he leads a liberal faction that has pushed for a system in which the government, not insurance companies, provides health coverage.

Pelosi is an ardent defender of the Affordable Care Act, a law she helped enact over a decade ago, and urgently wants to bolster it by permanentl­y increasing the subsidies that help people pay for coverage. She also must contend with the desires of moderate House Democrats who are expected to face difficult reelection fights next year.

And one thing is clear: Some factions’ priorities must be significan­tly curtailed or abandoned altogether.

That was recently underlined by centrist Sen. Joe Manchin III (D-W.VA.), who holds outsize influence because of the Senate’s 50-50 party breakdown. Manchin recently penned a Wall Street Journal op-ed titled, “Why I Won’t Support Spending Another $3.5 Trillion,” and on Sunday he said that number may need to be cut by more than half to win his support.

That drew a protest from Sanders, who described a smaller economic package as “unacceptab­le,” while expressing confidence that Democrats would unite behind a bigger bill.

“I believe we’re going to all sit down and work together and come up with a $3.5 trillion reconcilia­tion bill, which deals with the enormously unmet needs of working families,” he told CNN.

Although some Republican­s have joined Democrats on a companion infrastruc­ture bill, it is almost certain that they will not support the social spending package, which they dismiss as a socialist splurge. Rep. Kevin Brady (RTex.) recently criticized Democrats for ramming through “trillions of dollars in new welfare spending.”

All this makes the blueprint the purest distillati­on of Democratic priorities in the post-trump era, as well as the culminatio­n of years of calls for more government funding to help poor and working-class Americans, tackle global warming and raise taxes on the wealthy to underwrite these proposals.

The sheer scope of the effort — especially combined with Biden’s coronaviru­s and infrastruc­ture plans — has some Democrats seeing similariti­es to Lyndon B. Johnson’s Great Society and Franklin D. Roosevelt’s New Deal. While those crusades created wholly new programs, the current bill would dramatical­ly expand the boundaries of government help for the disadvanta­ged.

The bill also embodies Democrats’ effort to counter what many of them see as society’s most urgent need and the GOP’S most glaring failure, the imperative to tackle climate change, with an array of investment­s, fees and incentives to shift the country away from fossil fuels.

And it would enact another goal liberals have pursued for decades: lowering drug costs by letting Medicare negotiate with drugmakers.

The fight to shape this landmark effort has triggered a reopening of the internal party debates that defined the 2020 Democratic primaries. Should healthcare spending run primarily through the ACA or Medicare? How much more should the rich pay in taxes? How far to go combating climate change?

Pelosi summed up the Democrats’ quandary recently during a news conference: Everything seems too important to trim.

“Where would you cut? Child care? Family medical leave, paid for? Universal pre-k? Home health care?” Pelosi said. “But in any event, we will have a great bill, and I hope that as people are looking at numbers, that they’re weighing the values and what we can accomplish with that legislatio­n.”

At the same time, the White House is trying to do a better job of emphasizin­g that regardless of its ultimate scope, the measure will be entirely paid for.

But some top Democrats are more openly acknowledg­ing that the final cost might drop significan­tly from the current $3.5 trillion.

“It might be that it would need to be done with 2.5,” said Rep. James E. Clyburn (D-S.C.), the third-ranking House Democrat. “I certainly believe you need more than 1.5. You may not need 3.5.”

At the moment, Democrats’ thorniest topic is health care. Although Pelosi has said both the Medicare and ACA expansions will be in the final bill, many Democrats worry about their abilities to fully satisfy advocates of both.

The relevant House committees, including the tax-writing Ways and Means Committee, started charting a path forward this past week, and liberals erupted when the committee announced a proposal that would roll out Medicare vision and hearing benefits in the next two years but delay dental coverage until 2028 to reduce costs.

A White House official sought to temper the significan­ce of the committee’s work, saying it is hardly the last word, as Sanders pointedly warned against delaying the dental coverage.

Medicare-expansion advocates want the plan to kick in sooner so seniors see an immediate impact. They’re even talking about distributi­ng preloaded payment cards, so people have a tangible symbol of the new benefit, according to people with knowledge of the talks.

“If you look strictly at the politics here for 2022, that’s exactly what I need, is some senior citizen — and it’s not only about him, it’s about his children, he goes to visit them — they say, ‘You have a hearing aid; I don’t need to shout at you anymore,’ ” said Sen. Richard Blumenthal (D- Conn.). “Or, ‘You have glasses, you can read the Internet.’ Or, ‘I’m so glad you took care of that dental problem.’ ”

Sanders and liberals in the House are also pressing to lower the Medicare eligibilit­y age from 65 to 60, though that push faces an uncertain fate.

Democrats are driven in part by what they see as their failure in 2010 to show Americans exactly what they were gaining from the ACA, allowing Republican­s to warn of “death panels” and other supposed dangers. A decade later, the ACA has become relatively popular, but in the meantime, Democrats lost countless elections.

Now that the ACA is firmly ensconced, some Democrats say it provides a better pathway than Medicare to expand health benefits since it specifical­ly targets those who are less well-off.

“Medicare applies to multimilli­onaires like it applies to middleinco­me people,” said Clyburn. “Medicaid, though, applies to lower-income people, and therefore it ain’t getting the same attention Medicare is getting.”

Some Democrats say the White House plan is to give both the Medicare and ACA advocates some of what they want, if not all of it. “I think they think we can do some of all of these things, said Rep. Pramila Jayapal (D-wash.), who chairs the Congressio­nal Progressiv­e Caucus.

Democratic anxieties also run deep about how to sell the plan to the public. Many believe the policies they are spearheadi­ng will prove popular if enacted but say Americans have only a vague sense of what they are trying to accomplish.

They note, for example, that Washington leaders often call the package a “reconcilia­tion bill,” in reference to the arcane procedure they are using to enact it. “Don’t call it reconcilia­tion anymore — that doesn’t mean anything to anybody,” said Rep. Matthew Cartwright (D-PA.). “It’s the ‘Build Back Better’ plan,” he added, using the name Biden has given to the proposal.

White House officials are also urging Democrats to stress the plan’s hoped-for economic benefits, rather than portraying it as a massive social program, and to highlight its orientatio­n toward the working class.

Former Democratic senator Ted Kaufman of Delaware, a longtime Biden aide and friend, said the president’s emphasis on making the plan understand­able to the public does not mean he does not care about what’s in it. “If you had told him that as president, he couldn’t do this — what he’s talking about here — I don’t think he would have run,” said Kaufman.

Democrats also face tough choices on the enormous set of tax changes they will need to finance their plans. Although they are unified on the need to raise taxes on wealthy individual­s and large corporatio­ns, their cohesion frays quickly when it comes to specific policies.

Treasury Secretary Janet L. Yellen wants to raise America’s minimum tax on overseas earnings from 13 percent to 21 percent, while simultaneo­usly trying to secure approval of a new global minimum tax through internatio­nal negotiatio­ns. But Rep. Bradley Schneider (D-ill.) wrote a letter to Democratic leadership arguing that the United States should not raise its internatio­nal minimum until the negotiatio­ns are resolved.

The White House probably faces an even harder slog on its plan to raise the taxes paid by wealthy investors. Biden wants to double the capital gains rate for investors making over $1 million to 39.6 percent, while also preventing investors from passing assets on to their heirs without paying taxes on their increased value.

Farm-state Democrats such as Rep. Cindy Axne (D-iowa), however, have repeatedly raised concerns about the potential of that idea to hurt small farmers.

In some ways, the debate is less about individual policies than the broader identity of a Democratic Party that has moved decisively to the left, a shift that is exciting liberals and worrying moderates.

Rep. Stephanie Murphy (DFla.), a centrist, pledged during last week’s Ways and Means Committee meeting to vote against each element of the bill because the rushed process fails to account for “how much we’re spending, how much we’re raising, how we’re spending some of the money, and how we’re raising any of the money.”

Still, most Democrats are optimistic they will reach a deal, saying their members recognize the stakes — and the price of failing to seize the opportunit­y.

“Windows open and windows close for reasons you can’t control,” said former senator Christophe­r J. Dodd of Connecticu­t, a Biden friend. “This is a moment to do something in a meaningful way. You don’t let a moment pass.”

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