With Joe Biden headed to Europe later this week for back-to-back summits—including a gathering of world leaders to address climate change—Democrats in the Senate are rushing to achieve unanimity on their big spending bill. On Sunday, Biden met with Chuck Schumer, the Senate Majority Leader, and West Virginia Senator Joe Manchin, one of two Democratic holdouts, at his Delaware home, and Nancy Pelosi, the Speaker of the House, declared on CNN’s “State of the Union” that an agreement was close. But on Monday morning Biden acknowledged that the negotiators still have “a few more things to work out.” Asked by reporters whether he wanted a deal by the time he left for Europe, the President replied, “That’s my hope.”
Pelosi said that the final Senate proposal is likely to include an annual tax on the wealth of billionaires. This would represent a historic development and a grand irony. Until recently, the Democrats were planning to pay for some of the spending bill by reversing the Trump tax cuts of 2017, which showered a range of goodies on corporations and rich folks, but they weren’t planning on singling out plutocrats. Now things have changed because the second Democratic holdout, Arizona Senator Kyrsten Sinema, who voted against the Trump tax bill, has put the kibosh on undoing the handiwork of Trump and the G.O.P. Some of Sinema’s wealthy donors may be grateful for her shameful U-turn but perhaps not the very wealthy ones. Thanks to Sinema, the Democrats, facing a vast funding gap, could end up enacting a billionaires’ tax that was originally championed by Elizabeth Warren and Bernie Sanders.
Sinema reborn as a progressive darling? Hardly. It’s not clear whether the House Democrats, who have already advanced a spending framework that includes higher tax rates on corporations and rich households, will now agree to this change of tack. And some progressives are already expressing dismay at other changes to the bill demanded by Manchin and Sinema. Assuming its fiscal cost comes in somewhere near two trillion dollars over ten years, the package will be roughly a third as big as the one that Sanders, the chairman of the Senate Budget Committee, proposed back in June. To bring on board Manchin and Sinema, who have been dubbed “Manchinema” by the press, Democrats have had to chop, curtail, or restructure many of their original proposals.
Take the expanded child tax credit, which was introduced in the pandemic relief bill that Congress passed in March. Hailed by anti-poverty experts and racial-justice groups as one of the most significant expansions of the social safety net in decades, it is already providing millions of poor and middle-class American families with a monthly cash payment of up to three hundred dollars for each child. But the spending bill may fund the expanded child tax credit for only one additional year, leaving it exposed to a Republican takeover of Congress. “As far as I’m concerned, a one-year expansion is a death sentence,” Ritchie Torres, a first-term Democrat who represents a congressional district in the Bronx, said on Sunday.
Environmental groups are still taking in the news that, because of opposition from Manchin, the spending bill is unlikely to include one of the central elements of Biden’s plan to tackle climate change. Under the Clean Electricity Performance Program, the federal government would have paid utilities to buy or generate clean power and penalized them for not transitioning fast enough from power generated by fossil fuels to cleaner sources. According to an analysis by the Princeton energy expert Jesse Jenkins and other researchers, the C.E.P.P. accounted for roughly a quarter of the emissions cuts in the Biden plan. Eliminating it, as Manchin has reportedly demanded, would mean that the Administration will likely fall short of its goal to reduce peak-emission levels by fifty per cent by 2030. “It’s just been a whole series of disappointments that we’ve arrived at where we are today,” Adrien Salazar, the policy director at the Grassroots Global Justice Alliance, which backed sweeping measures to counter climate change and also economic and racial inequality, told me over the weekend. Salazar already thought that the C.E.P.P. was insufficient in its initial form. “The package has been cut down further and further from the scale we need,” Salazar said.
The over-all shrinkage of the bill isn’t the only thing alarming progressives. Some of them are also anxious about the possibility of structural changes to individual programs that would make them more restrictive. For instance, there are reports that Manchin, in return for agreeing to extend the expanded child tax credit, is demanding the introduction of work requirements and a much lower income cap. “That would create major problems going forward,” Felicia Wong, the president of the Roosevelt Institute, a progressive think tank, said to me. “We already know that work requirements don’t actually generate work.”
Wong, who served as an adviser on Biden’s transition team, pointed to other possible elements of the bill that she finds concerning: a shortened paid-leave program that works through private insurers; a child-care plan that relies on subsidies to private providers; and, in another proposal, a financial-support package to improve semiconductor manufacturing that turns into a subsidy program for existing large companies. “Especially as some of these programs are being restricted, we are seeing Zombie nineteen-nineties neoliberalism creeping back in,” Wong said. “I am very worried that we are going to end up with private subsidies that are opaque and not fully democratic, rather than direct public provision along the lines of the New Deal. If we aren’t careful, we are going to end up spending a lot of money and not getting the full public benefit for it.”
These criticisms need to be put in context. Despite all the cuts and changes, the revised spending bill will contain many programs that virtually all Democrats support. If the latest press reports prove accurate, the bill would guarantee pre-K to all three- and four-year-olds; expand Medicaid coverage to roughly 2.2 million low-income Americans who currently aren’t covered; and provide additional funding for reinforcing Obamacare, building more affordable housing, and making home care for the elderly more affordable. Despite the scrapping of the clean-grid proposal, the bill is also likely to feature substantial tax incentives for green-energy producers and other environmental proposals that were part of the original House spending package or the Senate infrastructure bill. If all these other measures were included in the reconciliation bill, they would “still deliver more than a billion tons of emissions reductions, the largest single climate policy in U.S. history,” Jenkins told me in an e-mail.
In the coming days and weeks, the White House and Democratic leaders will rightly trumpet these measures as significant progressive advances, as they will the potential wealth tax on billionaires. They will also point to a uniquely challenging political environment: an Administration operating with the barest of majorities in both chambers of Congress. This framing will be perfectly accurate: the final shape of the bill will reflect the Manchinema roadblock and also the implacable hostility of the G.O.P. But why, then, did the White House raise expectations so high with such a broad spending proposal earlier this year? Why didn’t it narrow down a few top priorities and go all out to get them fully funded? If both spending bills ultimately get passed, these questions will still be live ones. Democrats aren’t there yet.
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