The Washington Post

Democrats prepare for next phase as House completes spending package

$3.5 trillion bill moves to a Senate caucus gripped by infighting, opposition

- BY TONY ROMM tony.romm@washpost.com Seung Min Kim, Dan Diamond, Rachel Roubein and Amy Goldstein contribute­d to this report.

With the sound of one final gavel, House Democrats on Wednesday completed the mammoth task of translatin­g President Biden’s economic vision into a $3.5 trillion tax-and-spending proposal — marking a major milestone in a fight that’s still far from finished.

Assembling the House package proved to be an enormous undertakin­g, as Democrats raced over the past week to produce roughly 2,600 pages of legislativ­e text spanning the party’s vast policy ambitions. The measure seeks to shepherd major changes to federal health care, education, immigratio­n, climate and tax laws, introducin­g a sprawling set of federal programs that Democratic leaders have described as historic in their size and scope.

But the fruits of lawmakers’ labors quickly seemed overshadow­ed by political reality. A proposal that would try to lower the cost of prescripti­on drugs for millions of seniors appeared in fresh jeopardy, after a small group of Democrats dealt it an early blow in the House. The fuller $3.5 trillion plan, meanwhile, faced even more significan­t hurdles in the Senate — prompting Biden to embark on a renewed effort Wednesday to try to reassure wavering Democrats.

In a burst of personal outreach, Biden huddled with Sen. Kyrsten Sinema (D-ariz.) in the morning, then met with Sen. Joe Manchin III (D-W.VA.) later in the day. Both centrists have signaled they are unwilling to vote for a final package unless Democrats come down in cost. Their opposition has infuriated liberal lawmakers, including Sen. Bernie Sanders (I-VT.), who has rebuffed their attempts to whittle down the size of the plan — putting Democrats on a collision course in a chamber where they simply have no votes to spare.

If Democrats choose to reduce their spending, it may force the party to compromise on some of its core ambitions, a prospect that was not lost on Rep. John Yarmuth (D-KY.), the House’s top budgetmake­r. He described the renewed objections as a “source of great frustratio­n,” adding in an interview earlier this week that the caucus is holding firm.

“A significan­t number of our caucus — at least half, and probably significan­tly more than half — wanted to do more than $3.5 trillion,” he said. “It’s very frustratin­g for most of us, and I think it strengthen­ed our resolve to move forward.”

For now, at least, House Democrats have secured the general policy objectives Biden outlined in the two blueprints he unveiled earlier this year. The president and his congressio­nal allies have framed their $3.5 trillion agenda through the prism of history, likening it to the Great Society and New Deal investment­s from generation­s past.

The Build Back Better Act aims to expand Medicare, offering seniors access to hearing, dental and vision benefits. It also would extend a flurry of tax credits and other programs that make insurance more accessible and affordable, including for low-income Americans who seek coverage under Medicaid.

Democrats further set in motion a plan for roughly $750 billion to improve education and child care, including a new program that guarantees prekinderg­arten for all children ages 3 and 4. They authorized 12 weeks of paid family and medical leave for most working Americans, remedying a patchwork that leaves many without benefits today. And they crafted what lawmakers have described as the most significan­t set of legislativ­e reforms ever to combat climate change, including a flurry of programs that reward clean energy, penalize polluters and help Americans finance more environmen­tally friendly homes and vehicles.

Much of the work is financed through a series of tax increases targeting wealthy Americans, profitable corporatio­ns and investors. The tax hikes stop short of what Biden initially had recommende­d, including by omitting new taxes targeting inheritanc­es passed between family members. But they generally accomplish Democrats’ aims to unwind the tax cuts enacted under President Donald Trump four years earlier — all while raising about $2.9 trillion in revenue to cover the cost of the bill. Democrats contend the entire measure is financed in full since it fosters economic gains that pay for themselves.

“Millions of Americans’ lives will change for the better thanks to these provisions,” said Rep. Richard E. Neal (D-mass.), who chairs the tax-focused House Ways and Means Committee, during a hearing Tuesday. He said the tax increases ask the “biggest companies and the ultrawealt­hy to contribute more to the common good.”

Republican­s unanimousl­y have opposed the $3.5 trillion package, swiping at it repeatedly over the past week as reckless and wasteful. GOP leaders have alleged the combinatio­n of spending and tax increases would worsen the deficit, intensify inflation and erase the economic gains they secured under Trump.

Democrats still plan to finetune the proposal before bringing it to the House floor, all the while continuing negotiatio­ns with the Senate on a package that can clear both chambers. They face a race against the clock to finish their work before Sept. 27, at which point House Speaker Nancy Pelosi (D- Calif.) has promised she would move the House to begin considerin­g a roughly $1 trillion effort to upgrade the nation’s infrastruc­ture.

To pass it, Democrats intend to use the process known as reconcilia­tion, which will allow party lawmakers to sidestep a Republican filibuster — but only if Pelosi and Senate Majority Leader Charles E. Schumer (D-N.Y.) can keep their caucuses together. Pelosi has only three votes to spare in the House, and Schumer has none in a 50-50 Senate.

With time tight, and the margin for error increasing­ly slim, Pelosi issued a plea to her caucus earlier this week, writing in a letter that Democrats must “stay united in our quest to reach our goal and honor our values.”

Already, though, there are signs Democrats have started to stray.

As House lawmakers finalized their work Wednesday, Sinema and Manchin individual­ly met with Biden at the White House. Manchin only a day earlier reiterated his opposition to a $3.5 trillion bill, as he instead proposed a package that could be only half that size. Manchin also has taken aim at key elements of Democrats’ plans to combat climate change.

Officials on Capitol Hill and at the White House said the separate meetings marked the first substantiv­e chance for Biden to engage directly with the two pivotal senators and declined to discuss the sit-downs in much detail. Sinema spokesman John Labombard said only that her meeting with Biden was “productive.”

Publicly, though, White House chief of staff Ron Klain said at an event Wednesday that the $3.5 trillion package could be scaled back by cutting down the size of some new programs or trimming the duration of some of the spending. But he also made the case — aimed at the deficitmin­ded centrists in the Democratic Party — that the package at its current size would be paid for.

House Democrats have spent the past week preemptive­ly trying to ward off cuts to the cost, fearing that a smaller tax-and-spending package could imperil some of their most prized programs. That includes an extension of the expanded child tax credit, a program that aims to cut child poverty by allowing families to obtain bigger tax benefits paid on a monthly basis.

Senate Democrats have sought to tinker with a wide array of additional programs in the proposal. Manchin has raised the need for new work requiremen­ts on the child tax credit, an idea liberal lawmakers see as unacceptab­le. Other tensions linger among Democrats over climate change, as a subset of Democrats continue to push for a border tax targeting pollution and additional funding for other elements to combat emissions.

Even more severe headaches emerged this week over Democrats’ plans to try to pursue prescripti­on drug pricing reforms as part of an up-to $3.5 trillion reconcilia­tion package. Lawmakers including Pelosi, a fierce advocate for the proposal, say they must empower Medicare to negotiate friendlier rates for seniors. But they have faced immense opposition from the pharmaceut­ical industry, which has run ads attacking party lawmakers, as well as a set of centrist Democrats.

The pricing policy also has added significan­ce, serving as a major financing piece of the broader $3.5 trillion package, as Democrats estimate it could raise billions of dollars to offset their spending. Another House committee has adopted the proposal, giving party leaders additional options to advance it — provided they can overcome dissent within their own ranks.

The still-widening schisms ultimately did not seem to faze Pelosi, who sent a second letter to House Democrats on Wednesday in the hours before lawmakers concluded their work.

“The vision and knowledge of President Biden and Congressio­nal Democrats,” she began, “has enabled us to be on schedule in delivering the Build Back Better agenda.”

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