WASHINGTON – The White House and Democrats are hastily reworking key aspects of President Joe Biden’s $ 2 trillion domestic policy plan, slashing social services and climate change programs and rethinking new taxes on corporations and the rich to pay a reduced package.
The changes come as Biden calls more forcefully on the American public, including in a televised town hall Thursday night, for what he says are middle-class values ââat the heart of his proposal. As long-sought agendas are adjusted or eliminated, Democratic leaders show great deference to Biden’s preferences for quickly closing talks and reaching agreement in the small Congress.
Even a new idea of ââthe White House dropping plans to reverse Trump-era tax rates in favor of an approach that would involve taxing billionaire investment income to help fund the deal seems acceptable for the best Democrats. Leaders are rushing to complete negotiations, possibly by the end of the week.
âWe have a goal. We have a timetable. We have milestones and we’ve all hit them, âsaid House Speaker Nancy Pelosi, D-Calif., Who predicted Thursday,â It will pass soon. “
Talks between the White House and Democratic leaders are focused on reducing what was a $ 3.5 trillion package to around $ 2,000 billion, in what would be an unprecedented federal effort to expand social services to millions of people and face the growing threat of climate change.
With stiff Republican opposition and no Democratic votes to spare, Biden must keep all of his party’s lawmakers – centrists and progressives – aligned.
A sharp turnaround came on Wednesday evening when the White House launched new ways to pay for parts of the proposal by suspending a long-planned increase in corporate tax rates and top incomes, but in adding others, including a tax on the investment gains of the very richest Americans.
Biden faces resistance from major dissenters, especially Sen. Kyrsten Sinema, D-Arizona, who disagreed with his party’s plan to reverse President Donald Trump’s tax breaks for big business or individuals earning more than $ 400,000 per year.
The White House believes that Sinema “is working with us in good faith and we are working with her in good faith,” Deputy Press Secretary Karine Jean-Pierre said on Thursday.
The proposed new tax provisions, however, are likely to embitter progressives and even some moderate Democrats who have long campaigned to abolish Republicans-backed 2017 tax cuts that many say unduly reward the rich and cost the wealthy. government of untold amounts of lost revenue at once. gaping income inequality. Many are furious that perhaps a single senator can thwart this goal.
Tax Drafting Ways and Means Committee chairman Rep. Richard Neal, D-Mass., Said he spoke for more than 30 minutes with the centrist Arizona senator, whose narrow opinions are a mystery to her colleagues .
âI said, Kyrsten, you and I both know it’s got to be okay. She said, “I couldn’t agree more,” “Neal told reporters on Capitol Hill.
Sinema’s office did not respond to a request for comment.
Under the current law adopted in 2017, the corporate tax rate is 21%. Democrats had proposed raising it to 26.5% for companies making more than $ 5 million a year. The top tax rate would drop from 37% to 39.6% for those earning over $ 400,000, or $ 450,000 for married couples.
Under the proposed changes, the corporate rate would not change. But not all of the revisions would be positive for big business and the wealthy.
The White House is reviving the idea of ââa minimum corporate tax rate, similar to the 15% rate Biden proposed this year. It’s even for companies that say they have no taxable income – a frequent target of Biden, who complains of paying “zero” tax.
The new tax on the richest people would be modeled after the legislation of Senator Ron Wyden, D-Ore., Chairman of the Senate Finance Committee. He proposed taxing stock gains of people with more than $ 1 billion in assets, or less than 1,000 Americans.
Other tax options are also being considered, and Democrats are almost certain to include a provision to strengthen the Internal Revenue Service to prosecute tax evaders.
Another key Democrat, Conservative Senator Joe Manchin of West Virginia, has said he prefers a 25% corporate rate, but his resistance to the bill lies mainly in other areas such as climate change and social services.
Overall, the new package, while thinner than the original, would represent the most substantial overhaul of federal balance sheets in at least a generation.
Biden and his party are trying to shore up middle-class households, tackle climate change and stem the trend of rising income inequality.
At least $ 500 billion to fight climate change, $ 350 billion for free child care and preschool subsidies, a new federal program for at least four weeks of paid family leave, an extension of a year of the $ 300 monthly child tax credit put in place during the COVID-19 crisis, and money for health care provided through the Affordable Care Act and Insurance- sickness.
Plans for a tuition-free community college, a path to permanent legal status for some immigrants to the United States, and a clean energy plan that was the centerpiece of Biden’s strategy to tackle climate change will likely be disposed of or shaved.
Democrats are increasingly concerned that they have spent much of the year on the package and have struggled to explain what is in it, which is made up of so many different parts.
The president especially wants to get him moving ahead before he leaves next week for a world climate summit in Scotland.
Manchin has made it clear that he opposes the president’s initial energy plan, which involved forcing the government to impose sanctions on electric utilities that fail to meet clean energy standards and provide financial rewards to those who do.
Instead, Biden is focused on providing at least $ 500 billion in tax credits, grants, and loans to power producers who meet emission reduction targets.
In other areas, Pelosi has emerged with Biden’s plan to extend the $ 300 monthly child tax credit for a year, rather than letting it expire in December, but it’s not as long as the Democrats wanted it.
What had been envisioned as a federal paid family leave program lasting several months could be reduced to just four weeks – an effort to at least start the program rather than eliminate it.
Biden also wants to secure funding for health care programs and add a new one to provide dental, vision and hearing benefits to people on Medicare, proposed by Sen. Bernie Sanders, I-Vt.