Democrats face the “Rubik’s cube on steroids”

Democrats face tough choices as they wonder how to keep their promise to introduce a crucial social spending bill for President BidenJoe BidenCapitol’s fencing begins to drop after ‘Justice for J6′ rally Senate MP rejects Democrats’ immigration plan Biden pushes Democrats back on taxes MOREthe agenda.

The high-level balancing act tests the very slim majorities of Democrats and highlights long dormant divisions.

“It’s like a Rubik’s cube on steroids. … It’s complicated, ”said the senator. Mark WarnerMark Robert Warner Lawyers call on top Democrats to get $ 0 billion in housing investment Democrats draw red lines in spending fight (D-Va.) On the inventory.

Here are some of the toughest hurdles for Democrats:

How much should the invoice be?

Where Democrats come out on top is a move that will affect everything else in the bill, forcing lawmakers to scale back their ideas or abandon ideas altogether.

Progressives, including the chairman of the Senate Budget Committee Bernie sandersBernie Sanders Manchin suggests suspending talks on $ 500 billion package until 2022: Yarmuth and Clyburn report suggest 0.5T package could be lightened Sanders calls deadly Afghan drone strike “unacceptable” MORE (I-Vt.) And Rep. Pramila JayapalPramila JayapalManchin suggests suspending talks on $ 500 billion package until 2022: Democrats report urges Biden to commute 4K sentences on Manchin home lockdown lets Washington guess what he wants MORE (D-Wash.), Argue the bill must rise to $ 3.5 trillion, which they see as a compromise from their original target of $ 6 trillion.

Moderate sense Kyrsten CinemaKyrsten SinemaBiden pushes Democrats back on taxes Yarmuth and Clyburn suggest .5T package could be lightened From partisan fights and follies, or why Democrats should follow Manchin, not Sanders MORE (D-Arizona) and Joe manchinJoe ManchinManchin suggests suspending talks on 0.5 trillion package until 2022: Biden report pushes Democrats on taxes Yarmuth and Clyburn suggest 0.5T package could be lightened MORE (DW.Va.) say it needs to be smaller and they won’t support a $ 3.5 trillion bill.

Some members of the management are opening the door to a downturn with Sen. Dick durbinDick Durbin Senate MP rejects Manchin Democrats’ immigration plan lets Washington guess what he wants Democrats hope Biden can topple Manchin and Sinema MORE (D-Ill.) Acknowledging that $ 3.5 trillion “may not be the end point.”

Medicare vs Medicaid

Democrats are also debating the importance of focusing on Medicare, versus increasing Medicaid and strengthening the Affordable Care Act.

House bill creates a new federal health insurance program to provide Medicaid coverage in the 12 states that did not extend it under the old president obamaBarack Hussein Obama White House Debates Air Travel Vaccines Five Questions And Answers On Tackling The Debt Ceiling Our Strategy To Counter Terrorism From A Distance Is More Risky Than Good MOREthe law on health.

Senate Democrats have yet to decide whether to take the House approach amid caucus reluctance over potentially remunerative states that did not expand Medicaid sooner. Another, potentially faster, option being discussed would be to use the already established ObamaCare insurance markets to cover more people.

Democrats are also divided over how to provide more coverage for vision, dental and hearing through Medicare. For example, the House bill would start Medicare dental benefits in 2028, which Sanders believes is too slow.

Drug prices

A rebellion by three House Democrats against a prescription drug plan portends bigger headaches that lie ahead for Biden and Democratic leaders over the key provision.

Democratic leaders promise that the final bill will allow the government to negotiate with drug companies to lower the prices of prescription drugs. The plan is crucial because the savings that should be generated could help cover the costs of other elements of the health provisions of the spending bill.

But House moderates have warned the drug pricing plan had little luck in the Senate at 50-50, where Democrats have no room for error, and instead introduced a narrower bill. The broader plan, which is backed by the House leadership, has already raised concerns among some Senate Democrats and the pharmaceutical industry is now stepping up its attacks, which would increase pressure on lawmakers.

Weather

The House Energy and Commerce Committee included a clean electricity payment program, which encourages the transition to clean energy, in its spending part of the bill, and Democratic senators who support the policy have been working behind the scenes to make sure it fits into their version of the bill. .

But they face a stumbling block in the form of Manchin, who chairs the energy and natural resources committee and is responsible for drafting some of the clean energy and climate provisions.

Manchin, in an interview with CNN, argued that the clean energy transition “is happening” and therefore “makes no sense” to use taxpayer funding. Manchin wondered if he would offer his own version of the program, telling reporters he was not going to “negotiate this in the press”.

Corporate tax rate

Democrats must come to an agreement on how much tax to pay, including where to set the corporate tax rate after Republicans used their 2017 bill to raise it from 35% to 21%.

Biden, as part of his plan, proposed a 28% corporate tax rate. That won’t happen, but the question is how much congressional Democrats are going to step down and how much revenue it will cost them.

House Democrats are proposing a 26.5% corporate tax rate, but it’s moving in the Senate. Manchin and Warner, whose Senate Majority Leader votes Charles schumerChuck SchumerBiden discusses agenda with Schumer and Pelosi ahead of pivotal week CEOs urge Congress to raise debt ceiling or risk ‘avoidable crisis’ (DN.Y.), both said they wanted the rate to be 25 percent.

Inheritance tax regime

House Democrats did not include Biden’s proposal to tax capital gains on death, leaving in place the current rule that requires heirs not to pay capital gains tax until the time of death. sale and only on gains made after their inheritance.

Chairman of the House Ways and Means Committee Richard nealRichard Edmund NealBiden pushes back Democrats on taxes Want a clean energy future? Watch Tax Code, Democrats Prepare For Toughest Milestone Yet With Biden PLUS Agenda (D-Mass.) Suggested to reporters that including it could have cost the biggest votes on the spending bill that the leadership couldn’t afford to lose, saying the move was “to reach 218” .

Progressives lobbied for his inclusion with Sen. Elizabeth warrenElizabeth Warren Protectionism Trojan Horse Stock Trading by Federal Reserve Officials Triggers Manchin Ethics Review Leaves Washington Guess What It Want MORE (D-Mass.) Saying it should “be part” of the plan, but the idea could face backlash from Farmer State Democrats. Democrats are considering alternatives, including requiring heirs to pay the full capital gain since the initial purchase instead of since they inherited.

SALT

The House Ways & Means Committee did not include changes to the Trump-era SALT deduction cap, which particularly affected taxpayers in parts of New York, New Jersey and California.

Progressives are wary of an outright repeal, arguing that it would benefit richer households. But Democrats in the House and Senate are warning that it will be difficult to vote for the larger package without some changes.

Democrats promise to include “significant” changes. Although they have not yet found where to land, one of the ideas put forward is the repeal of the cap for two years.

Income requirements

Democrats are offering a wide array of new perks as part of their $ 3.5 trillion spending plan, including universal preschool and free community college.

The House bill does not include income-based restrictions on these benefits. But Manchin is using resource-based testing to limit who is eligible for certain programs, arguing that it would help target aid on families who need it most and control costs.

The question divides Democrats – for example, the Senator. Tammy baldwinTammy Suzanne BaldwinWarren and Daines introduce bill honoring 13 dead in Kabul attack This week: Democrats launch chaotic fall with Biden’s agenda at stake (D-Wis.) Said she was not in favor of resource testing for the community college plan, while Kaine said he was. Even after the Democrats make the big decision whether or not to include the income caps, they will still have to haggle over where to set the caps.

Manchin is also floating in putting labor requirements on a strengthened child tax credit that was included for a year in the coronavirus bill but Democrats want to extend as part of the spending bill.

The temporary expansion increased the tax credit for children under six from $ 2,000 to $ 3,600 per child under age 6 and to $ 3,000 for older children. House Democrats have offered to extend it until 2025.

But Manchin, in an interview with CNN, argued that Democrats should “make sure we get it to the right people” and “people should make an effort.”