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Divided Democrats see slow progress on Biden's social spending bill

[October 22, 2021] By David Morgan and Richard Cowan

WASHINGTON (Reuters) - Brawling factions of the Democratic Party on Thursday worked feverishly toward agreement on a huge U.S. social spending bill, even as Senator Joe Manchin said there would not be a deal "anytime soon" on broad outlines of legislation that is a pillar of President Joe Biden's agenda.

The warning from the key centrist lawmaker indicated that Democrats were still not close to agreeing on the size and contents of Biden's spending package.

"This is not going to happen anytime soon," Manchin told reporters.

With closed-door talks being held throughout the day, there were conflicting assessments of how rapidly disagreements could be resolved.

Democrats have spent months arguing about the size and scope of what Biden initially proposed as a $3.5 trillion plan to expand the social safety net and fight climate change.

Negotiators might cut it down to about $2 trillion or less. House Ways and Means Committee Chairman Richard Neal told reporters his goal was $2 trillion.

Manchin - who along with fellow moderate Senator Kyrsten Sinema has been pushing for a smaller package - had said earlier he believed Democratic negotiators could settle on a final figure by Friday. That would resolve a key sticking point, although progressives and moderates would still have to sort out the substance of the bill, including what programs to keep, what to cut, and how long to fund them.

Neal said he had talks with Sinema and that the two lawmakers were in "full agreement" on major initiatives, such as extending an expanded child tax credit and family and medical leave.

"I still think there's a long ways to go but the conversation was really good," Neal said.

Raising tax rates for corporations and wealthy individuals has been a hot-button issue for months in negotiations, spurring ideas for other ways to raise revenues.

"Senator Sinema has agreed to provisions in each of President Biden's four proposed revenue categories - international, domestic corporate, high net-worth individuals, and tax enforcement - providing sufficient revenue to fully pay for a budget reconciliation package in the range currently being discussed," a source familiar with the negotiations said.

The source did not provide details.

Sinema has told the White House she will not support Biden's proposed rate increases for corporations and wealthy individuals. The White House told some Democrats this week that the corporate tax hikes may be dead.

Representative Pramila Jayapal, who heads the Congressional Progressive Caucus, said the tax provisions were vital to the success of the legislation.

"I think it says terrible things about us as Democrats if we can't get those in here because of one senator," Jayapal told reporters.

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U.S. Senator Joe Manchin (D-WV) faces reporters outside the U.S. Capitol in Washington, U.S., September 30, 2021. REUTERS/Leah Millis

FRAMEWORK DEAL SOON?

Democratic Senator Ben Cardin said he expected Democrats would agree on a total price tag within days, leaving lawmakers to fill in the details.

"I think they've got to stay in over the weekend to try to get this resolved," he said.

Biden told lawmakers on Tuesday he thought he could get Manchin and Sinema to agree to a figure in the range of $1.75 trillion to $1.9 trillion, according to a source familiar with the talks, who spoke on condition of anonymity.

Getting to that number could mean giving up or delaying priorities, including a plan to offer all Americans the opportunity to attend two years of free community college, and scaling back others such as a child tax credit and funds for affordable housing.

Disagreements over the scale of the bill have held up Biden's domestic agenda, with progressives in the House of Representatives refusing to vote for a $1 trillion infrastructure bill already passed by the Senate until a deal is reached on social programs and climate change.

If a deal is promptly reached on the outlines of the big social spending bill, it could clear the way for House passage of the infrastructure bill as soon as next week.

Another stumbling block involves how to lower pharmaceutical prices.

A Sinema aide rejected media reports she does not want to give the government authority to negotiate lower drug prices for the Medicare healthcare program for seniors. The issue as been a Democratic priority for decades.

"As part of her direct negotiations over the reconciliation package, she is carefully reviewing various proposals around this issue," said the aide, who spoke on condition of anonymity.

House Speaker Nancy Pelosi said the final package could contain no tax rate increases at all.

During a visit to his native Scranton, Pennsylvania, on Wednesday, Biden said the social spending legislation, plus the infrastructure bill, would create 2 million jobs a year for 20 years and not raise the deficit.

(Reporting by David Morgan and Richard Cowan; Additional reporting by Doina Chiacu and Timothy Gardner; Writing by Andy Sullivan; Editing by Scott Malone, Jonathan Oatis and Peter Cooney)

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