Under pressure, Democrats cut back spending

Democratic lawmakers are swiftly cutting back their spending on the Build Back Better agenda after President Biden made clear to progressive lawmakers that the package will spend far less than they had hoped on key priorities.

Progressive and centrist Democrats alike say a new reality is setting in after weeks of stalemate over the shape and size of the social spending bill, which had also brought work on an infrastructure measure passed by the Senate to an impasse.

Now a new dawn is arising as centrists, progressives and a president with falling approval ratings looked into a potential political abyss.

“We are facing the reality that without all 50 Democrats we don’t get anything done. And demanding 100 percent of each member wants means we’ll end up with 100 percent of nothing,” said Sen. Elizabeth Warren (D-Mass.), a prominent progressive.

Many liberal lawmakers had hoped that Biden and Senate Majority Leader Charles Schumer (D-N.Y.) would be able to convince holdout centrist Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) to support a package of $3 trillion.

Now there’s a sense of resignation that the bill will top out at $1.9 trillion or $2 trillion and that key priorities such as a national paid family leave program and long-term home health care for the elderly and disabled will be cut down. Other priorities such as free community college may be dropped completely.

Despite the disappointment, there’s also a recognition on the part of a number of liberals that the stalemate was becoming a political liability, and that it would be better to move a watered-down bill than to keep spinning their wheels.

Democrats also are worried the infighting could contribute to a Democratic defeat in the Nov. 2 gubernatorial election in Virginia.

Senate Budget Committee Chairman Bernie Sanders (I-Vt.), who is in talks with Manchin about reaching a framework agreement this week, said “there’s a strong feeling within the caucus that we either fish or cut bait.”

Democrats who are working on the health care titles of the reconciliation bill say they’re willing to accept a scaled-down proposal if that’s what it takes to get a bill to Biden’s desk.

“It is crunch time, people realize that, and everybody is trying to figure out how we get to a bill with 50 votes,” said Senate Health, Education, Labor and Pensions Committee Chairwoman Patty Murray (D-Wash.).

Biden told lawmakers this week that he will scale down a proposal to reduce the cost of health care by increasing Affordable Care Act subsidies for three years instead of permanently.

Core proposals to address the warming global temperatures have also fallen off the table in recent days after Manchin made clear to the White House he would not support the $150 billion Clean Electricity Performance Program (CEPP).

But instead of gearing up for intraparty battle, the biggest advocates of enacting meaningful reforms to mitigate climate change say they’ll take what they can get.

“My goal is to be successful,” said Sen. Ed Markey (D-Mass.). “We’re not there.”

He acknowledged there’s an “understanding that there are limitations on” what will be in the package but nevertheless insisted that even a compromise on climate provisions can still do an “excellent job” in sending a signal to the world that the United States is enacting significant reforms.

Sen. Sheldon Whitehouse (D-R.I.), who warned last month that a reconciliation package would not move through the Senate unless it was strong enough on climate, is also toning down his rhetoric. While the CEPP might be off the table, Whitehouse feels optimistic that Democrats can reach consensus on other reforms.

“There are a number of pieces that you can put together to make up for the loss of the CEPP. It’s a valuable part of the climate portfolio and will be a significant one but with the original tax package, with a carbon pollution fee, with a methane pollution fee and with a border adjustment, you can more make up for the loss of the [clean electricity program],” Whitehouse said.

Senate Finance Committee Chairman Ron Wyden (D-Ore.) is telling colleagues that the tax incentives for clean and renewable energy sources in the Clean Energy for America Act, which does not include a carbon tax, would cut emissions from the power sector by as much as 73 percent over the next 10 years.

At a meeting with progressives on Tuesday, Biden discussed expanding Pell Grants to lower the cost of higher education instead of providing for free community college, as Democrats initially discussed.

Again, progressives on Wednesday said they’re willing to be patient on a proposal to provide free college education, arguing there will be other opportunities to fund it later in Biden’s administration.

“There I have a lot of respect for the president. He was so passionate about that issue and the first lady is so passionate about it. I believe he’ll get that in his administration,” said Rep. Ro Khanna (D-Calif.), a leading progressive.

Khanna said he’s not thrilled about shortening the timelines of various investment proposals to reduce their overall cost but is willing to accept it.

“It’s not ideal, but politics is the art of compromise. It’s not how I would fund things, but it’s better than having nothing,” he said.

The president also suggested that a four-year extension of the child tax credit could be shortened to only one year. That concession to moderates sparked more pushback from House Democrats.

House Appropriations Committee Chairwoman Rosa DeLauro (D-Conn.) said: “A one-year extension is a big mistake.”

House Ways and Means Committee Chairman Richard Neal (D-Mass.), whose panel voted for an expansion of the child tax credit through 2025, said: “We’re going to continue to fight for the House position.”

Senate liberals on Wednesday also pushed back on Biden informing colleagues that the national family leave program would be limited to four weeks, instead of 12, as initially discussed.

A group of 15 Senate Democrats led by Sen. Kirsten Gillibrand (D-N.Y.) sent a letter to Biden, Schumer and Speaker Nancy Pelosi (D-Calif.) urging them to include a more robust family and medical paid leave program in the legislation.

“It must be universal to cover all workers, provide progressive wage replacement to help the lowest wage earners, and cover all existing types of leave with parity,” they wrote.

Mike Lillis contributed.