Dems Back Away From Paid Leave, Billionaire Tax

President Biden campaigns for Terry McAuliffe in Virginia
JONATHAN ERNST
By Yuval Rosenberg

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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