Dems Back Away From Paid Leave, Billionaire Tax

Dems Back Away From Paid Leave, Billionaire Tax

President Biden campaigns for Terry McAuliffe in Virginia
By Yuval Rosenberg and Michael Rainey
Wednesday, October 27, 2021
Dems Back Away From Paid Leave, Billionaire Tax as Biden Looks to Lock Down a Deal

Democratic leaders sounded unrelentingly optimistic Wednesday about the prospects of finalizing a framework for their social welfare and climate package, and the White House ratcheted up the pressure on lawmakers to cement a deal ahead of President Joe Biden’s planned trip to Europe starting Thursday.

Biden met Tuesday evening with holdout senators Kyrsten Sinema (D-AZ) and Joe Manchin (D-WV). White House officials then met with the two centrists for a couple of hours again Wednesday. And the president met with Sen. Bernie Sanders (I-VT) Wednesday afternoon.

"An agreement is within arm's length, and we are hopeful that we can come to a framework agreement by the end of today," Democratic Majority Leader Chuck Schumer (D-NY) said on the Senate floor Wednesday morning. House Speaker Nancy Pelosi (D-CA) followed that by announcing in a letter to colleagues that she had asked the House Rules Committee to hold a hearing Thursday to advance the legislation — even though there is no bill ready to be considered.

"Several Democrats said the deal was essentially done, pending Biden's and Sanders’ final sign offs," Politico reported. "If they clinch a deal, the president is expected to come to the House to pitch Democrats on an infrastructure vote, possibly delaying his overseas flight Thursday morning."

The rush to reach an agreement was complicated, though, by a number of hurdles that remained intractably in place — both on the spending and revenue sides. And the chances of reaching a quick resolution were clouded by contrasting public demands from key players and uncertainty about whether progressives will buy into a deal after seeing more and more of their priorities fall by the wayside as Biden woos Manchin and Sinema.

Rep. Pramila Jayapal, chair of the Congressional Progressive Caucus, insisted Wednesday that the full legislative text of the climate and care economy bill must be done before her members would vote for a bipartisan infrastructure bill that the Senate passed in August. Jayapal wants the two bills to move together.

Here’s an update on where key provisions stand — with the caveat that the situation is still in flux.

Paid leave proposal likely out of the final agreement: In a major blow to Biden’s agenda, Democrats reportedly are now prepared to drop paid family and medical leave from their bill given Manchin’s continued opposition to the measure. The White House had pared back an initial plan to provide 12 weeks of paid family and medical leave, instead offering four weeks. That failed to sway Manchin. "I’ve been very clear: To expand social programs when you have trust funds that aren’t solvent, are going insolvent, I can’t explain that. It doesn’t make sense to me," he said. "I just can’t do it."

Dueling red lines on Medicare expansion: Manchin has also opposed a plan, championed by Sanders, to expand Medicare coverage to include dental, vision and hearing benefits. Sanders has insisted that the expansion be included. Schumer said he is working with Sanders to ensure the package will include the new benefits, according to The Washington Post, but it’s not clear how the senatorial standoff might be resolved.

Key Democrats reject billionaire tax: Democrats’ plan to raise hundreds of billions of dollars by taxing the capital gains of a tiny sliver of super-wealthy Americans appeared to be losing steam just hours after text of the proposal was released by Sen. Ron Wyden (D-OR), chair of the Senate Finance Committee.

Several Democrats expressed concerns about the proposal, which would impose an unprecedented — and some say legally dicey — tax on increases in wealth of those worth $1 billion or more.

Manchin made it clear Wednesday that he opposed the idea as currently formulated. "I don’t like it — I don’t like the connotation that we’re targeting different people," he said. "People in the stratosphere, rather than trying to penalize them, we ought to be pleased this country is able to produce the wealth."

At the same time, Manchin opened the door to some kind of tax on wealthy people, saying "there’s a patriotic duty that you should be paying something to this great country to give you the protection and the support and the opportunities … Everyone should pay their fair share." Manchin suggested that wealthy people who have no tax liabilities should pay a "patriotic tax" of 15%, though he offered no details on how such a system would work.

Nevertheless, Manchin’s comments were seen as a sign that Wyden’s billionaire tax is not viable, and at a press conference Wednesday, House Ways and Means Committee chair Rep. Richard Neal (D-MA) announced that the proposal was "out of the Biden plan." Neal said that lawmakers were discussing an alternative plan to apply a 3% surtax on incomes over $10 million per year.

Wyden, however, challenged Neal’s claim about the proposed tax. "Not a single senator has come close to saying, ‘I think it’s OK that billionaires continue to pay little or nothing in taxes for years on end,’" Wyden said. "Last time I looked, the United States Senate has a say, too. And so we are continuing to work with members."

Still, the billionaire tax, if not entirely dead, does seem to have lost momentum among Democrats, and Manchin’s rejection of the proposal drew a broad lament from Sen. Bernie Sanders (I-VT). "Every sensible revenue option seems to be destroyed," Sanders said Wednesday. "So it seems to me almost every sensible progressive revenue option that the president wants, that the American people want, that I want, seems to be sabotaged."

The bottom line: Democrats might be close enough to a deal that a final push by Biden gets it done, but centrists and progressives still appear divided over some policies that were supposed to be the core of the bill — and lawmakers are certainly split over how to pay for it all.

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