Politics Big changes in White House ideas to pay for $2 trillion plan
Budget gimmicks will define Democrats’ next trillion-dollar spending bill
Government budgeting, both at the state and federal level, has always been partly about smoke and mirrors. For example, lawmakers on both sides of the aisle have long reduced the apparent cost of new spending or tax relief by making it “temporary” — and daring future lawmakers to stop the largesse. But Democrats striving to pare back their massive $3.5 trillion spending plan — the largest spending bill in history — appear poised to take such budget gimmicks to absurd new heights in the weeks ahead. As Politico reported Wednesday, © J.
SCRANTON, Pa. (AP) — In an abrupt change, the White House is floating new plans to pay for parts of President Joe Biden’s $2 trillion social services and climate change package, shelving a proposed big increase in corporate tax rates though also adding a new billionaires' tax on the investment gains of the very richest Americans.
The reversal Wednesday came as Biden returned to his hometown of Scranton, Pennsylvania, to highlight the middle class values he says are at the heart of the package that Democrats are racing to finish. Biden faces resistance from key holdouts, including Sen. Kyrsten Sinema, D-Ariz., who has not been on board with her party's plan to undo Trump-era tax breaks to help pay for it.
Bernie’s Tax the Rich Bluff Just Got Called by His Fellow Dems
The Democratic party has been tearing itself to pieces debating whether its latest reconciliation bill should spend $3.5 trillion or $2 trillion or even $1.5 trillion. Less noticed, but perhaps more important, has been the quiet death of the progressives’ bold “tax the rich” utopia. For years, socialists and progressives such as Bernie Sanders and Elizabeth Warren have enticed voters with free-lunch promises of a European social democracy financed mostly by new taxes on millionaires and large corporations. Now that Democrats have full control of the White House, House, and Senate, they can no longer blame Republicans for blocking these taxes.
“This has been declared dead on arrival from the moment I introduced it, but I think we’re going to surprise them, because I think people are beginning to figure out what’s at stake,” Biden said in a speech at Scranton’s Electric City Trolley Museum, his first visit home since becoming president.
Negotiations between the White House and Democratic leaders on Capitol Hill are underway on what's now a scaled-back package but would still be an unprecedented federal effort tofor millions and confront the rising threat of climate change. It's coupled with a separate $1 trillion bill to update roads and bridges.
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Why would we risk the full faith and credit of the United States on an untested theory based upon a murky provision that does not even mention the national debt? The inflationary impact of a $1 trillion coin is likewise unclear. In its most extreme articulation, proponents of the idea have stated that there would be "no additional soaring inflation" resulting from the coin. But this blanket statement is hard to swallow.
Biden and his Democratic Party have given themselves a deadline to seal agreement after laboring to bridge his once-sweeping $3.5 trillion vision preferred by progressives with a more limited focus that can win over party centrists. He has no Democratic votes to spare for passage in the closely divided Congress, and leaders want agreement by week’s end.
The newly proposed tax provisions, though, are likely to sour progressives and even some moderate Democrats who have long campaigned on undoing the 2017 GOP tax cuts that many believe unduly reward the wealthy, costing the federal government untold sums in lost revenue at a time of gaping income inequality.
Administration officials spoke with congressional leaders on the tax alternatives, according to a person familiar with the private talks and granted anonymity to discuss them. The changes may be needed to win over Sinema, who had objected to plans to raise the rates on corporations and wealthy individuals earning more than $400,000 a year, said the person and several others.
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Among them is a trip on Air Force One. It was a sign that the president is growing “a bit exasperated,” the member of Congress present at the meeting told Yahoo News, in this case with Huffman’s insistence that climate change remain a key feature of the president’s spending plan. Regardless of whether Huffman joins Biden when the president leaves for Scotland, the White House says that it wants a deal by then that will ensure the passage of both Build Back Better and a related $1.2 trillion infrastructure package. Democratic leaders in Congress have also set Halloween as their own deadline for progress on the domestic bills. © Provided by Yahoo! News Rep.
As it stands, the corporate tax rate is 21%, and Democrats want to lift it to 26.5% for companies earning more than $5 million a year. The top individual income tax rate would rise from 37% to 39.6% for those earning more than $400,000, or $450,000 for married couples.
Under the changes being floated that 21% corporate rate would stay the same.
However, the revisions wouldn't be all positive for big companies and the wealthy. The White House is reviving the idea of a minimum corporate tax rate, similar to the 15% rate Biden had proposed earlier this year. That's even for companies that say they had no taxable income — a frequent target of Biden who complains that they pay “zero” in taxes.
And there could be a new billionaires’ tax, modeled on legislation from Sen. Ron Wyden, D-Ore., the chairman of the Finance Committee, who has proposed taxing stock gains of those with more than $1 billion in assets — fewer than 1,000 Americans.
Billions in environmental justice funds hang in the balance
Tens of billions of dollars for U.S. environmental justice initiatives originally proposed in a $3.5 trillion domestic spending package now hang in the balance as Democrats decide how to trim the bill down to $2 trillion. Investments in a wide range of these projects were proposed in the Build Back Better plan, but Senators Joe Manchin of West Virginia and Krysten Sinema of Arizona demanded that the bill be reduced, with Manchin asking for it to be cut by as much as half. Now, Democratic leaders are trying to bridge divergent views of progressive and moderate lawmakers over the size and scope of the bill.
Sinema has not publicly stated her position, and her office did not respond to a request for comment.
Another key Democrat, conservative Sen. Joe Manchin of West Virginia, has said he prefers a 25% corporate rate. He has been withholding his support for the bill with additional objections to its provisions on climate change and social services.
On the call with the administration and the White House, Wyden said he “stressed the importance of putting an end to America’s two tax codes, and finally showing working people in this country that the wealthiest Americans are going to pay taxes just like they do.”
The possible shift comes as Democrats appear to have made progress uniting themselves, ready to abandon what had been a loftier package in favor of a smaller, more workable proposal the party can unite around.
Biden heads to Scranton to pitch his trillion-dollar agenda
Joe Biden will return to his hometown of Scranton on Wednesday to pitch his trillion-dollar congressional agenda after conceding to Democrats some the most ambitious parts of his plan will have to go.'I think we’ll get a deal,' he told reporters before boarding Air Force One for the short hop to Pennsylvania and a chance to pitch his social spending plans.
In the mix: At least $500 billion to battle climate change, $350 billion for child care subsidies and free pre-kindergarten, a new federal program for at least four weeks of paid family leave, a one-year extension of the $300 monthly child tax credit put in place during the COVID-19 crisis, and funding for health care provided through the Affordable Care Act and Medicare.
Likely to be eliminated or shaved back: plans for tuition-free community college, a path to permanent legal status for certain immigrants in the U.S. and athat was the centerpiece of Biden’s strategy for fighting climate change.
“Nothing is decided until everything is decided,” said Rep. Pramila Jayapal, D-Wash., the leader of the Congressional Progressive Caucus after a morning meeting of House Democrats. “We’re just trying to get it done.”
Democrats are growing anxious they have little to show voters despite their campaign promises and have had trouble explaining what they're trying to do with the massive package, made up of so many different proposals.
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Democrats still differ over what to strip out of Biden's budget bill, which is likely to be much smaller than the initial $3.5 trillion Biden pitched.House Speaker Nancy Pelosi, D-Calif., earlier this month, set a new deadline of Oct. 31 for the House to pass a $1.2 trillion bipartisan infrastructure bill and achieve consensus on a bigger budget bill that includes a number of liberal policies like subsidizing child care and fighting climate change. .
It's a tall order that was leading to an all-out push Wednesday to answer the question — “What’s in the damn bill?” — as a press release from Sen. Bernie Sanders, the independent from Vermont, put it.
The president especially wants to advance his signature domestic package to bolsterand address by the time he departs for a global climate summit next week.
Rep. Ro Khanna, D-Calif., a progressive caucus member, said, "He really believes American leadership, American prestige is on the line.”
Manchin has made clearwhich was to have the government impose penalties on electric utilities that fail to meet clean energy benchmarks and provide financial rewards to those that do.
Instead, Biden is focused on providing at least $500 billion in tax credits, grants and loans for energy producers that reach emission-reduction goals.
On other fronts, to preserve Biden’s initial sweep, Democrats are moving to retain many of the programs but trim their duration to shave costs.
Biden wants to extend the $300 monthly child tax credit that was put in place during the COVID-19 crisis for another year, rather than allow it to expire in December, but not as long as Democrats wanted.
What had been envisioned as a months-long federal paid family leave program could be shrunk to as few as four weeks — an effort to at least start the program rather than eliminate it.
Biden also wants to ensure funding for health care programs, including for home- and community-based health care services, supporting a move away from widespread nursing home care.
And a newproposed by Sanders, is likely to remain in some fashion.
Biden has told lawmakers that after his top priorities there would be $300 billion remaining.
That could lower the overall price tag or be used for other programs.
Associated Press writers Kevin Freking and Josh Boak contributed to this report.
Biden and Democrats lie about wealth tax, and so much more .
If Democrats’ tax-and-spend proposals are as popular as they claim, why do they have to lie about them? © Getty Images Biden and Democrats lie about wealth tax, and so much more When President Biden claims his $3.5 trillion "social infrastructure" bill will cost "zero," he is clearly assuming Americans are morons, since there is no way the government can spend trillions of dollars without hiking taxes or increasing borrowing, for both of which there is indeed a price tag.