Biden Pushes Democrats on Spending Deal

By Yuval Rosenberg

A flurry of meetings in Washington is
giving Democrats hope that they can finally agree on a plan to
spend roughly $2 trillion over 10 years on what President Joe Biden
has called “human infrastructure.” But important policy differences
remain, and lawmakers face a very tight calendar for getting things
done this fall. Here’s what you need to know.

Biden Pushes Democrats on Spending Deal

President Joe Biden held multiple meetings with Democratic
lawmakers Tuesday in an effort to forge a consensus on his sweeping
social spending plan.

Biden met Tuesday morning with Sens. Joe Manchin of West
Virginia and Kyrsten Sinema of Arizona, key figures in an evenly
divided Senate who oppose some elements of the Biden plan.

In the afternoon, along with Vice President Kamala
Harris and Treasury Secretary Janet Yellen, Biden met with a group
of liberal Democrats, including Reps. Pramila Jayapal (WA), Mark
Pocan (WI), Debbie Dingell (MI), Katherine Clark (MA), Ritchie
Torres (NY), Jimmy Gomez (CA), Jared Huffman (CA), Ro Khanna (CA)
and Barbara Lee (CA).

Calling the meeting “really good, really productive,” Jayapal
said that the group had discussed a bill focused on major
priorities costing somewhere in the range of $1.9 trillion to $2.2
trillion – a substantial cut from the $3.5 trillion some Democrats
have discussed in recent weeks, but likely a necessary reduction
given the resistance to the higher number among some members of the
caucus.

A post-meeting statement from the Congressional Progressive
Caucus indicates that Democrats are reducing the duration of some
of their proposed social programs in order to reduce the overall
cost. “We … appreciate the President fighting for progress on all
of these key priorities, even if it is for a shorter period of
time, as the CPC had articulated weeks ago is our preferred option
to bring down the overall price tag,” the group said.

Later in the day, a group of moderate or conservative Democrats
who have expressed concerns about some parts of the Biden plan came
to the White House, including Sens. Catherine Cortez Masto (NV),
Jon Tester (MT) and Mark Warner (VA), and Reps. Ami Bera (CA), Mike
Thompson (CA), Suzan DelBene (WA), Josh Gottheimer (NJ) and Tom
O'Halleran (AZ).

“The new series of meetings reflect a fresh political urgency
over Biden’s core promise to overhaul health care, education,
immigration, climate and tax laws,” The Washington Post’s Tony Romm
and Marianna Sotomayor say. “With negotiations stalled for months —
and tempers at times flaring publicly between Democrats’ warring
factions — the president hopes to rally the Capitol and hit the
road to try to get his agenda back on track.”

Aiming for a framework this week: Given the current level
of discord over specific provisions of the Biden plan, it seems
unlikely that Democrats can produce a detailed bill in the near
future. But several key Democrats said Tuesday that they hope to
reach some kind of agreement in a few days.

After a lunch meeting with colleagues, Senate Majority Leader
Chuck Schumer (D-NY) said Democrats recognized the need to resolve
their disputes soon and agree on a “framework” for the bill. “We
had a very spirited discussion at our lunch,” Schumer said. “There
was universal agreement in that room that we have to come to an
agreement and we have to get it done, we want to get it done this
week.”

Sen. Bernie Sanders signaled that it’s time for the negotiations
to produce results. “The American people are tired of these
discussions never-ending,” he said.

Manchin seemed to agree. “There is a general feeling that
negotiations have been going on month after month after month and
that it is time that we brought this thing to a head as soon as we
possibly can,” he said. “I would hope that we would see some real
action this week.”

Manchin reportedly told colleagues that he would work with
Sanders this week to hammer out a framework, with Sinema getting
involved as well and Schumer coordinating the talks.

“There’s lots of meetings going on,” Schumer said. “There’ll be
all kinds of meetings, together and separately to get this done,
but we’re really — the pace has picked up. The desire to get it
done is strong.”

Leader expects vote: House Majority Leader Steny Hoyer
(D-MD) said he plans to stick to the schedule Democrats have agreed
to, which means holding votes on both the bipartisan infrastructure
bill and the larger reconciliation package in less than two
weeks.

"On the Build Back [Better] agenda, we're committed to meeting
the deadline of Oct. 31," Hoyer told reporters. "We're working very
hard to have both of those bills ready to be passed by the House of
Representatives before that date."

At the same time, Hoyer said he recognized that the bill will
have to be smaller, with Democrats focusing on fewer programs. “I
continue to believe we ought to use the Build Back Better Act to do
fewer things better. That, I think, is our principal
responsibility,” he said. “Obviously, we have to create consensus,
we have to create the votes to pass that bill. And in doing so I
would urge all of us to focus on the most consequential of the
items which we’re considering.”

The bottom line: Democrats seem to be gaining some
momentum on their contentious social spending plan, but there are a
lot of problems that still need to be solved.

Democrats Scale Back Controversial IRS Bank
Reporting Plan

The Biden administration and congressional Democrats are scaling
back a controversial proposal to have banks report more information
to the Internal Revenue Service after their initial plan was met
with a backlash from the financial services industry and
Republicans.

The original proposal, part of a larger effort to generate more
revenue by cracking down on tax cheats, called for financial
institutions to provide data to the IRS on accounts with annual
deposits or withdrawals totaling more than $600. But the plan
generated a storm of criticism from Republicans, and a fierce
lobbying campaign by banks, with both groups raising alarms about a
government invasion of privacy. Some critics also falsely claimed
that the IRS would be tracking individual transactions.

The revised plan, outlined Tuesday by Senate Finance Committee
Chair Ron Wyden (D-OR) and Sen. Elizabeth Warren (D-MA) and
endorsed by the Treasury Department, would set the reporting
threshold at $10,000 a year and includes exemptions for payroll
deposits and Social Security benefits, among other things. “We’re
adding language to ensure enforcement efforts are focused on the
very wealthy,” Wyden
said.

Taking aim at tax dodgers: The Biden administration
insists that the new reporting requirement is meant only to help
collect unpaid taxes from the rich and that audit rates won’t go up
for taxpayers making less than $400,000 a year. The requirement is
aimed at addressing what the Biden administration describes as a
two-tiered system in which wage earners, who have their incomes
reported to the IRS, comply with tax rules at a far higher rate
than people — mostly wealthy — who generate substantial income from
sources that don’t get reported to the government, making it harder
to suss out
tax evasion.

“Under the current system, American workers pay virtually all
their tax bills while many top earners avoid paying billions in the
taxes they owe by exploiting the system,” Treasury Secretary Janet
Yellen said in a statement Tuesday. “This two-tiered tax system is
unfair and deprives the country of resources to fund core
priorities. Today’s new proposal reflects the administration’s
strong belief that we should zero in on those at the top of the
income scale who don’t pay the taxes they owe, while protecting
American workers by setting the bank account threshold at $10,000
and providing an exemption for wage earners like teachers and
firefighters.”

Critics unmoved: The proposed changes did little to quell
criticisms from Republicans and the banking industry.

“Even with the modifications announced today, this proposal
still goes too far by forcing financial institutions to share with
the IRS private financial data from millions of customers not
suspected of cheating on their taxes. The exclusion of payroll and
federal program beneficiaries does not address millions of other
taxpayers who would be impacted by the proposal,” said Rob Nichols,
president and CEO of the American Bankers Association, in a
statement. “If enacted, this new proposal would still raise the
same privacy concerns, increase tax preparation costs for
individuals and small businesses, and create significant
operational challenges, particularly for community banks.”

Sen. Kevin Cramer (R-ND) reportedly
warned: “Marx is at the doorstep.”

The Treasury Department estimates that tax evasion among the top
1% of taxpayers costs the U.S. more than $160 billion a year, or
about 28 percent of unpaid taxes.

Treasury officials had estimated that the original reporting
requirements would generate
$460 billion over a decade, while a narrower plan
might raise
$200 billion to $250 billion.

Manchin’s Income Limit for Child Tax Credits
Would Reduce Coverage by 37 Million: Report

Sen. Joe Manchin has criticized numerous provisions in President
Biden’s Build Back Better plan, including a proposal to provide
refundable child tax credits to the majority of American families.
Expressing fears about the country becoming an “entitlement
society,” the conservative West Virginia Democrat has proposed
limiting the program by imposing a $60,000 income cap for receiving
the credit, a much lower cutoff than Biden has proposed.

According to an analysis by the Niskanen Center, a non-partisan
libertarian think tank, 37.4 million children would lose the
benefits of the tax credit under Manchin’s plan. The total includes
189,000 children in West Virginia, Manchin’s home state.


See Insider for more on the story.

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