For President Biden’s economic agenda, this week is gearing up to be a do-or-die moment.
Democratic leaders are racing over the next 72 hours to secure a framework deal on their social benefits plan, deeming it a crucial step before the president heads overseas for a global climate summit, and voters go to the polls next week in gubernatorial contests in New Jersey and Virginia — races that could make or break the party’s momentum heading into the 2022 midterms.
Biden’s approval rating has plummeted in recent months, and Democratic leaders are scrambling to get him a win and shift the spotlight from high-profile infighting that has dominated Washington for weeks.
“Any negotiation with 50 senators is going to have a lot of different points of view. But I think we’re all trying to head in the same direction and we know the most important part of that is we need to deliver,” said Sen. Elizabeth Warren (D-Mass.).
A quick strategy for giving Democrats a boost would be to pass a $1 trillion bipartisan infrastructure bill, approved by the Senate in August, through the House and to Biden’s desk — a tactic favored by moderate Democrats.
But that proposal has been hanging in limbo for weeks, blocked by House liberals insisting that an agreement on the larger social spending package be finalized before they’ll support the more popular public works bill. The challenge facing Democratic leaders this week is to do both before Biden’s climate summit — a goal Speaker Nancy Pelosi (D-Calif.) amplified on Sunday.
“That’s the plan,” she told CNN’s Jake Tapper.
Biden pushed for a more ambitious timeline on Monday, telling reporters that he wants a deal on the social spending bill before he heads to Rome on Thursday.
“It’d be very, very positive to get it done before the trip,” Biden said.
Democrats are feeling increasingly bullish about clinching an agreement this week after missing a self-imposed Friday deadline.
Sen. Joe Manchin (W.Va.), one of two Democratic holdouts blocking Biden’s agenda, gave party leaders some reason to be optimistic on Monday, predicting that negotiators “should be” able to reach a deal on a framework this week.
“We have an awful lot of text to go through, but as far as conceptually we should,” he said.
Central to those talks are efforts to trim Biden’s initial $3.5 trillion proposal down to a figure acceptable to the Democratic moderates, who have expressed concerns about deficit spending and government overreach. Manchin, for one, has pushed for a $1.5 trillion ceiling.
Negotiations stretched through the weekend as the White House and Democratic leadership tried to keep the pressure on to move quickly after months of talks. Biden also hosted Senate Majority Leader Charles Schumer (D-N.Y.) and Manchin in Delaware to try to close the gap on several critical issues.
A spokesperson for Sen. Kyrsten Sinema (D-Ariz.), another key vote, said that “discussions continued all weekend and progress is being made.”
Even as Democrats appear increasingly hopeful, several key areas remained in flux on Monday. Schumer put the number of outstanding issues at “three or four.”
“First we have to get agreement on those and then move forward from there,” Schumer told reporters.
One difficulty has been how to cull popular programs all seen as priorities. Sen. Dick Durbin (D-Ill.) compared the discussions to “asking a parent your favorite child.”
“I like the whole package, but I’m a realist we’re not going to get the whole package,” he said.
Democratic leaders and Biden are facing competing forces from within the party on whether to use the bill to expand Medicare and Medicaid. The spending legislation is Democrats’ best shot at expanding health care access for the foreseeable future, with Republicans feeling increasingly confident about their chances of taking back the House in the 2022 midterms.
But an ambitious plan to extend Medicaid to roughly 2 million people in states that didn’t expand their programs under ObamaCare, and a separate proposal to have Medicare cover vision, hearing and dental, appear at risk of being trimmed back or cut altogether.
Senate Budget Committee Chairman Bernie Sanders (I-Vt.) tried to draw a red line over the weekend on keeping Medicare in the bill, saying that it was “one of the most popular and important provisions.”
“It’s what the American people want. It’s not coming out,” he added.
Democrats including Sen. Raphael Warnock (D-Ga.) favor the Medicaid expansion, to help low-income patients with no health coverage at all, which could pay political dividends in next year’s tough Senate race.
But Manchin isn’t sold, yet, on either proposal, saying expanding Medicare is “not fiscally responsible,” while questioning if the Medicaid proposal would be unfair to states, like his, that agreed to expand previously.
“The problem that I have with that one right now is we’re paying 90-10,” Manchin said, referring to the federal government matching 90 percent of the costs under Medicaid expansion. “For states that held out to be rewarded 100 percent, that’s not fair.”
Democratic leadership and the White House are scrambling to see if they can get four weeks of paid leave into the final bill, a dramatic cut from the 12 weeks that was included in the House-drafted legislation.
Democrats haven’t reached a deal yet on what climate change provisions will make the cut — a key for the White House because Biden wants to be able to tout the details in Glasgow.
Democrats are also still fine-tuning how they would pay for their bill. But there appears to be growing momentum behind the idea of a so-called billionaire tax, which would place an annual tax on unrealized capital gains.
A source familiar with that plan said it would apply to taxpayers with over $1 billion in assets or $100 million in income for three consecutive years.
All of the cuts being made to satisfy moderates including Manchin will also need to pass muster with House and Senate progressives. They initially envisioned an expansive $6 trillion package, then agreed to Biden’s figure of $3.5 trillion, but have watched as the number has been slowly and substantially scaled back. Leaders say they’re now aiming for a package in the range of $2 trillion.
Sen. Mazie Hirono (D-Hawaii) said it would be a “major disappointment” if the bill is shrunk to around Manchin’s preferred top-line figure of $1.5 trillion, but warned Democrats against playing hardball in the final stretch.
“You draw a red line and then you get stuck. I’m not interested in getting stuck. I’m interested in getting something done,” she said. “I think it’s really, really critical that we get both of these measures done.”