Internal battles heat up over Biden agenda

Democrats are plotting their next moves on a massive social spending package that advances much of President Biden’s economic agenda, but they’ll also have to resolve several internal battles that are starting to heat up.

Congressional Democrats are refocusing their attention on the so-called human infrastructure proposal now that Senate passage of a short-term debt limit bill is in the rearview mirror. Lawmakers say the debt limit deal that resulted in a Senate vote on Thursday night clears the way for Democrats to devote their time to the spending package.

“Senate Democrats will focus on passing [the] Build Back Better agenda so we can finally build up ladders of opportunity for people to climb up to the middle class, to help people already in the middle class stay there, to fight climate change and create the good-paying jobs of tomorrow and rekindle that sunny American optimism that has long been the core of our national identity,” Senate Majority Leader Charles Schumer (D-N.Y.) said on the Senate floor Thursday.

In order for the spending package to pass, it will need the support of nearly every House member in the party as well as every Democratic senator. That’s shaping up to be a significant challenge, with moderates and progressives diverging on several key points.

Democrats have disagreements on a wide variety of issues, ranging from the overall size of the package to the contours of the spending programs and tax cuts in the bill and to the revenue raisers that will be used to pay for the legislation.

Here’s a look at five of the biggest fights.

Prescription drugs

Three Democrats voted against a House committee’s portion of the spending package that would allow the Health and Human Services secretary to negotiate prescription drug prices, a clear sign that this is an issue where Democrats have yet to reach a consensus.

The three no votes from Reps. Kurt Schrader (Ore.), Kathleen Rice (N.Y.) and Scott Peters (Calif.) meant that drug pricing legislation failed to advance in the House Energy and Commerce Committee, though the provisions made it through the House Ways and Means Committee.

Drug pricing negotiations have long been a priority for many Democrats, who seek to lower the cost of medications, and polls show the idea is popular with the public. Lowering drug costs would also lead to savings for the federal government that Democrats want to use to help offset the cost of spending programs in their bill.

But Schrader, Peters and Rice expressed concerns that the proposal under consideration in the Energy and Commerce Committee would hurt pharmaceutical companies’ ability to innovate. The lawmakers support a less far-reaching bill on drug prices.

Senate Democrats are also working on drug pricing legislation that is not as expansive as the main House proposal.

Medicare expansion

Expanding Medicare to cover dental, vision and hearing care is a major priority for a number of Democrats, especially progressives. But the cost of doing so, as well as a preference from other Democrats to focus more on shoring up ObamaCare, is creating significant hurdles for the party.

Legislation approved by the Ways and Means Committee last month would start the vision coverage in 2022 and hearing coverage in 2023 but would not start the dental portion until 2028. The delayed start date has drawn fire from both from progressives, including Sen. Bernie Sanders (I-Vt.), and some moderates who view the delay as a budget gimmick.

Some moderates argue that strengthening ObamaCare should be a higher priority than expanding Medicare, and key Senate centrist Joe Manchin (D-W.Va.) said he thinks Medicare’s financial situation should be bolstered before the program is expanded.

“I want to make sure we are stabilizing what we have before we start going down this expansion role,” Manchin said last month.

Clean electricity

Many Democrats view the social package as a once-in-a-generation opportunity to spend big on combating climate change.

A major climate provision proposed by House Democrats would create a clean electricity performance program, through which the Energy Department would provide grants to power providers that meet certain targets and would impose fines on providers that don’t sufficiently increase their amount of clean electricity to customers.

But Manchin, who is chairman of the Senate Energy and Natural Resources Committee, has criticized the House proposal for effectively excluding natural gas that doesn’t use carbon-capture technology from its definition of clean electricity.

Manchin has also criticized the proposal more broadly, saying it would provide benefits to companies that are already transitioning to clean electricity. He’s indicated that he would prefer the federal government provide loans to utilities instead of grants.

Hyde amendment

Another area of disagreement between Manchin and other Democrats is the Hyde amendment, which generally prohibits federal funds from being used for abortions.

Manchin wants the amendment included in a provision that would create a program to expand Medicaid in states that have not done so under ObamaCare. But Democrats have increasingly been pushing to do away with the Hyde amendment.

It’s not clear if the Hyde amendment, which typically is a part of appropriations bills, would need to be added to the social spending package to prevent the new Medicaid expansion program from being able to fund abortions.

Biden has said he would support the final spending package regardless of whether the Hyde amendment is included. During the 2020 Democratic primary, Biden initially indicated support for the Hyde amendment but quickly reversed his position.

SALT

Many Democrats from high-tax states view changes to the cap on the state and local tax (SALT) deduction as a must-have in the spending package. But the cost of changes to the cap and the benefits for high-income taxpayers have their opponents within the party.

Republicans created a $10,000 cap on the SALT deduction as part of their 2017 tax law. The cap has been opposed by lawmakers from Democratic-leaning states such as New York, New Jersey and California who say the limit hurts their residents and their states’ ability to provide robust services.

Some of these lawmakers, such as Rep. Thomas Suozzi (D-N.Y.) and Sen. Bob Menendez (D-N.J.), have indicated that SALT cap changes need to be included in the social spending package for the measure to get their vote.

But some progressives, including Sanders and Rep. Alexandria Ocasio-Cortez (D-N.Y.), do not want to fully repeal the cap because doing so would largely help high-income households. Repealing the cap is also expensive, and centrists are seeking to reduce the amount of spending and tax cuts in the bill.

In a sign of how tricky the SALT deduction issue is for Democrats, changes to the cap weren’t included in the bill the Ways and Means Committee advanced last month, but key lawmakers have indicated that the issue is still a priority.