Tuesday, November 30, 2021

White House, Dems Hastily Reworked Biden’s $ 2 Trillion Plan

WASHINGTON (AP) – The White House and Democrats are rushing to revise key aspects of President Joe Biden’s $ 2 trillion domestic policy plan, cutting social services. and climate change programs and rethinking new taxes for corporations and the rich who must pay for the cut package.

The change comes as Biden speaks more and more to the American public, including at the televised town hall on Thursday night, as he says his proposal is based on middle-class values.… As long-awaited agendas are tweaked or canceled, Democratic leaders have a lot of respect for Biden’s preference for a swift conclusion of negotiations and a deal in a narrow Congress.

Even a new White House idea that ditched plans to abolish the Trump-era tax rates in favor of an approach that would include taxing the investment income of billionaires to help fund the deal seems acceptable to leading Democrats. Management is in a hurry to complete negotiations, perhaps by the end of the week.

“We have a goal. We have a schedule. We have milestones, and we’ve all met them, ”said House Speaker Nancy Pelosi, California, who predicted Thursday:“ It will pass soon. ”

Talks between the White House and Democratic leaders are trying to cut the $ 3.5 trillion package to about $ 2 trillion, in an unprecedented effort by the federal government to expand social services. for millions and to counter the growing threat of climate change.

With bitter Republican opposition and no unnecessary Democratic votes, Biden must maintain the unity of all lawmakers in his party – centrists and progressives.

The sharp turnaround came late Wednesday night when the White House introduced new ways to pay for part of the proposal, postponing long-planned increases in corporate and maximum income tax rates, but adding others, including a tax on investment profits from the countries themselves. richest Americans.

Biden faces resistance from key opponents, notably Senator Kirsten Cinema, Arizona, which did not support her party’s plan to end President Donald Trump’s tax breaks for large corporations or individuals making more than $ 400,000 a year.

However, recently proposed tax provisions are likely to undermine progressives and even some moderate Democrats who have long campaigned to end the 2017 Republican-backed tax cut that many believe over-rewards the rich and cost the government innumerable sums in one go. lost profits. gaping income inequality. Many are outraged that perhaps a lone senator could interfere with this goal.

Pelosi indicated that she would prefer to remove these tax breaks, but appears to have opened up an alternative. “We’ll see,” she said.

The corporate tax rate is 21%. Democrats want to bump it up to 26.5% for companies making more than $ 5 million a year. The maximum individual income tax rate will increase from 37% to 39.6% for those earning more than $ 400,000, or $ 450,000 for married couples.

The corporate rate will not change if changes are made.

But not all changes will be positive for the big companies and the wealthy. The White House is reviving the idea of ​​a minimum corporate tax rate similar to the 15% rate that Biden proposed this year. This is even for companies that claim they have no taxable profits – a frequent target for Biden, who complains that they pay “zero” taxes.

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The new tax on the wealthiest people will be modeled on legislation by Senator Ron Wyden, Dean of Oregon and Chairman of the Senate Finance Committee. He proposed taxing stock gains in people with assets of more than $ 1 billion – less than 1,000 Americans.

Cinema has not publicly announced its position. Her office did not respond to a request for comment.

Another key Democrat, conservative Senator Joe Manchin of West Virginia, said he prefers a corporate rate of 25%, but his resistance to the law lies mainly in other areas such as climate change and social services.

In a telephone conversation with the administration and the White House, Wyden said that he “stressed the importance of ending two of America’s tax codes and finally demonstrating to workers in this country that the richest Americans will pay taxes the way they do. “

Overall, the new package, while thinner than the original, will represent the most significant revision of federal balance sheets in at least one generation.

Biden and his party are trying to strengthen middle-class households, tackle climate change and stem the upward trend in income inequality.

The mix includes at least $ 500 billion in climate change, $ 350 billion in childcare subsidies and free preschool, a new federal program for at least four weeks of paid family leave, and a one-year extension of the monthly child tax credit in the amount of $ 300. during the COVID-19 crisis, as well as money for medical care provided under the Affordable Care Act and Medicare.

The plans for a free community college, a path to permanent legal status for some immigrants in the United States, and a clean energy plan are likely to be eliminated or shaved off. this was the centerpiece of Biden’s strategy to tackle climate change.

Democrats are increasingly worried that they spent most of the year on this package and had a hard time explaining what’s in it, made up of so many different parts.

The President especially wants to push him forward by the time he travels to the global climate summit in Scotland next week.

Manchin made it clear that he opposed the president’s original energy plan. which was supposed to force the government to impose fines on utilities that do not meet clean energy criteria and provide financial rewards to those who do so.

Instead, Biden is focused on providing at least $ 500 billion in tax breaks, grants and loans to energy producers that meet their emission reduction targets.

Elsewhere, Pelosi backed Biden’s plan to extend the $ 300 monthly child tax credit for the next year instead of letting it expire in December, but that’s not as long as Democrats wanted.

What was meant to be a multi-month federal paid family leave program could be cut to four weeks – an attempt to at least start the program, not cancel it.

Biden also wants to secure funding for health programs and add a new program to provide dental, visual and hearing aids to people on Medicare. proposed by Senator Bernie Sanders, I-Vt.


Associated Press contributors Kevin Fracking and Josh Boak contributed to this report.

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