Budget trade-offs come into focus as Democrats seek consensus

Majority aims for updated 'framework' of filibuster-proof reconciliation package this week

Sen. Debbie Stabenow, D-Mich., says things left out of the current budget bill could be added to future legislation. (Bill Clark/CQ Roll Call)
Sen. Debbie Stabenow, D-Mich., says things left out of the current budget bill could be added to future legislation. (Bill Clark/CQ Roll Call)
Posted October 19, 2021 at 6:18pm, Updated at 10:51pm

Some of the trade-offs Democrats are likely to make as they pare back a partisan spending and tax package they're aiming to pass through the filibuster-proof reconciliation process began to crystallize Tuesday.

A proposal to subsidize two years of free community college is likely out. Tax credits expanded in the March coronavirus relief law to help families pay for health insurance and raising children won’t be extended for as long as most members wanted. A key proposal for pushing utility companies to switch to renewable energy sources needs to reworked or replaced to appease Sen. Joe Manchin III, D-W.Va.

These are all ways the package is likely to change as Democrats prepare to cut what was once envisioned to be a $3.5 trillion package down to around $2 trillion, according to several Democrats who attended negotiating meetings Tuesday at the White House.

Democrats hope to reach agreement this week on an updated "framework." The public airing of specific potential cuts and trims represented a step toward that goal after Democrats spent weeks debating the best strategy for dropping the price tag.

Progressives want to keep most programs in the bill but fund them for shorter periods. Many moderates want to fund fewer programs but make them permanent or long enough to be fully implemented and gain traction with the public.

President Joe Biden, who has been hosting meetings with key lawmakers at the White House in an effort to identify a compromise package in the $2 trillion ballpark, leaned more toward progressives’ approach as he talked to lawmakers about potential cuts.

“I think he is with us that we need to invest in as many of those transformational areas as possible, even if it means for some of them a shorter amount of time,” Congressional Progressive Caucus Chairwoman Pramila Jayapal of Washington said after members of her caucus talked with Biden.

After meeting with key centrist holdouts Manchin and Arizona Sen. Kyrsten Sinema in the morning, Biden offered compromise scenarios for various provisions in two afternoon group meetings. He first met with Jayapal and eight other House progressives, followed by a group of eight moderates, three senators and five House members.

Four of the five House moderates were members of the New Democrat Coalition, including its chairwoman, Suzan DelBene of Washington. The coalition has argued that a smaller package should focus on long-term certainty for a handful of priority programs.

That approach got a boost earlier Tuesday from House Majority Steny H. Hoyer, who said, “My own view is we ought to do fewer things better.”

'What we have to do'

But with Biden pushing to trim more programs rather than cut them completely from the package, New Democrats acknowledged they’ll have to settle for creating fiscal cliffs that aren’t ideal for creating lasting policy.

“If that's what we have to do to get a bill moving forward, we'll continue working on making some of these programs more permanent,” Rep. Ami Bera, D-Calif., one of the coalition’s vice chairs, said.

The New Democrats had previously suggested prioritizing four areas, two of which are now vulnerable to cuts.

The coalition wanted to extend a costly but popular expansion of the child tax credit enacted in the March coronavirus relief law through at least 2025, as in the House bill. Progressives supported that too, but now Democrats are discussing extending it through 2023, or even earlier.

“I don't think it will be as many years as we want,” Jayapal said. “There was some pushback on having it be too short, so we'll see where that ends up.”

New Democrats also wanted to permanently extend the March law’s expansion of premium tax credits for purchasing health insurance and providing broader access to Medicaid in states that did not expand the program.

Bera said the health insurance subsidies won’t be made permanent, but he’s not sure about the Medicaid program.

Climate concerns

The only common priority New Democrats shared with the Congressional Progressive Caucus was going big on climate programs that aim to reduce carbon emissions. Both sides are still fighting for that, mainly against Manchin, whose opposition to a $150 billion "clean electricity performance program" has Democrats looking at how else they can get to Biden’s goal of cutting carbon emissions in half by 2030.

“As encouraged as I am on the other aspects of the deal, I am concerned that we're not where we need to be on climate,” Rep. Jared Huffman, D-Calif., said.

Huffman, who attended the progressives’ meeting, said he argued that Democrats shouldn’t cut the clean energy program from the package “without a herculean effort to try to make it work for Sen. Manchin.”

He said he even floated the idea of creating a separate program for energy producers in West Virginia to accommodate Manchin’s interest in carbon capture technology for the coal and natural gas industries that dominate his state.

Huffman declined to say how the White House received that idea, but one thing Biden and progressives agreed on is that the bill needs to produce emission reductions that will meet his 50 percent target.

Biden said he’d like to have agreement on the climate proposals before he and lawmakers attend an international climate summit in Glasgow, Scotland in less than two weeks.

“We all want to take something tangible and meaningful to Glasgow. It's essential,” Huffman said.

Despite the concern over climate, progressives said their other priorities, such as expanding Medicaid, universal prekindergarten, child and home health care subsidies and affordable housing, remain in the bill but may be curtailed in timing and funding.

Tuition-free community college

“I can't really identify anything that completely falls out other than the possibility of [free] community college,” Huffman said.

Bera said the higher education piece won't be cut completely. Democrats are still discussing Pell Grants and vocational and technical training provisions “to kind of backfill some of the loss on the community college side," he said.

Rep. Jimmy Gomez, D-Calif., who participated in the progressives’ meeting, said Biden floated “a lot of trial balloons” to gauge the reactions of the different factions, but it’s too soon to say what is in or out.

With virtually every Democrat having veto power over the bill, “you're playing with a lot of uncertainty,” Gomez said.

'Get it done this week'

Democrats not involved in Tuesday’s White House meetings also touted progress in the negotiations.

Senate Majority Leader Charles E. Schumer told reporters after his caucus' weekly closed-door lunch that the pace of negotiations has “picked up” and the desire among Democrats to compromise on a scaled-down package “is strong.”

"We had a very spirited discussion at our lunch, passionate, strong, and there was universal — universal — agreement in that room that we have to come to an agreement, and we got to get it done, and want to get it done this week," the New York Democrat said.

The goal, Schumer said, is to get a commitment from all 50 Senate Democrats and at least 218 House Democrats — the thresholds needed for passage, with Vice President Kamala Harris breaking a tie in the Senate.

Despite the new details discussed Tuesday, the litany of unresolved issues remains. Schumer's fellow Democrats agreed with his ambition to bring negotiations to a close, but they offered wiggle room on when it may happen.

“I don’t know if it’s going to be this week or next week,” Hawaii Sen. Mazie K. Hirono said.

Republicans, who are uniformly opposed to the package, welcomed Democrats to take their time.

"The longer this lays out there, the more unpopular it becomes," Senate Minority Leader Mitch McConnell, R-Ky., said.

Muddling the message

Concern about muddled messaging over the various elements of the expansive package is one of the reasons Democrats want to reach quick agreement.

“We need to be out there explaining this to the American people,” Sen. Christopher S. Murphy, D-Conn., said Monday. “Every single day that we're consumed by internal debates and internal arguments is a day that we're not actively selling this.”

The other factor pushing Democrats to accelerate negotiations is the Oct. 31 expiration of surface transportation programs. The House wants to avoid a need for a short-term extension and necessary cash infusion into the Highway Trust Fund, and instead clear a Senate-passed bipartisan infrastructure bill that contains a five-year reauthorization and $550 billion in new spending.

But progressives want to see the reconciliation package done before they will vote for the infrastructure bill. Democratic leaders are hoping a reconciliation framework will be enough to grease the skids."We’re working very hard to get there,” Hoyer said.

Laura Weiss and David Lerman contributed to this report.