Budget package taking shape as Democrats eye aggressive schedule

Congressional leaders, White House aim for outlines of deal this weekend

Senate Finance Chair Ron Wyden, D-Ore., waves to celebrity influencer Paris Hilton in the Capitol on Thursday, Oct. 21. (Mary Ellen McIntire/CQ Roll Call)
Senate Finance Chair Ron Wyden, D-Ore., waves to celebrity influencer Paris Hilton in the Capitol on Thursday, Oct. 21. (Mary Ellen McIntire/CQ Roll Call)
Posted October 22, 2021 at 5:32pm, Updated at 6:13pm

Democrats ended the legislative week Friday without a “framework” agreement on their partisan spending and tax package, but leaders said they’d continue negotiating through the weekend on a handful of unresolved issues.

Optimism was so high that Speaker Nancy Pelosi told reporters the House may vote on the budget reconciliation package next week. 

“I’m hopeful,” the California Democrat said. “There are many decisions that have to be made. I would say that more than 90 percent of everything is agreed to.”

President Joe Biden and congressional Democrats are hoping to reach agreement on a reconciliation framework “no later than the end of the weekend,” House Majority Leader Steny H. Hoyer, D-Md., said on CNBC Friday morning. 

Meeting that deadline would make a floor vote possible but still a daunting task. In floor remarks on next week’s schedule, Hoyer said he could bring the reconciliation package up, along with a separate Senate-passed bipartisan infrastructure bill, “if they’re ready.” 

The infrastructure bill is not undergoing changes, but progressives have said they would only vote for it if the reconciliation bill is done. Surface transportation programs expire Oct. 31, so Congress will need to pass a short-term extension if the House can’t clear the broader measure. 

Hoyer indicated the more concrete deadline for getting both bills to the president’s desk is Dec. 3. That’s also the deadline Congress created for funding the government and lifting the debt ceiling with temporary stopgaps enacted over the last month.

“Those are four pieces of big legislation we want to do before Dec. 3,” Hoyer said in floor remarks.

Members doubtful 

While Democratic leadership was optimistic about getting the reconciliation package finalized, rank-and-file members were more skeptical. 

Rep. Ilhan Omar, D-Minn. the Congressional Progressive Caucus whip, said she’s worried leadership’s “deadline-driven” mentality could force progressives to “compromise too much,” like what happened in negotiations in the 2010 health care law.

“I think desperation, sort of, makes things not work out the best for anybody," Omar said Friday.

Rep. Dean Phillips, D-Minn., thinks a framework is imminent and votes will come soon after.  But he expressed concerns about lack of rank-and-file input in the hurried negotiations and warned that's complicating efforts to close the deal. 

“I think it’s fair to say … you can’t build the ship the day before you want to set sail, culturally,” he said. “You’ve got to engage people at the takeoff if you want to have them there at the landing.”

One Democrat facing a potentially tough reelection fight is Rep. Jared Golden, D-Maine, who outlined numerous concerns with the current package in a five-page letter to statehouse Democrats that said the measure "is not yet in a place where it would earn my vote." 

Golden's problems with the initial House bill, first reported by the Bangor Daily News, range from electric vehicle subsidies going to well-off households to new tobacco and e-cigarette taxes hitting the poor. His spokesman said Golden is "actively engaged with the White House" to try to resolve his concerns.

Rep. Stephanie Murphy, co-chair of the fiscally conservative Blue Dog Coalition, said leadership has not conducted the same level of outreach to reluctant House moderates as it has to Sens. Kyrsten Sinema of Arizona and Joe Manchin III of West Virginia. 

“Here in the House, there are members who have already voted 'no' and so it’s important those concerns are heard and addressed,” the Florida Democrat said, referring to herself and a handful of other Democrats who voted against pieces of the package in committee markups. 

Murphy voted against every Ways and Means Committee subtitle because she felt the process was too rushed and lawmakers didn’t have Congressional Budget Office scores to evaluate the cost of the proposals.

The CBO still hasn’t put out scores of some committee products or the combined package, which is now being renegotiated, and it's unlikely they'd be able to produce an estimate of whatever bill Democrats can agree to by next week. 

“I think it's really important on a package this size for us to have a CBO score before we take a vote,” Murphy said. 

Rep. Ron Kind voted against a retirement savings package in the Ways and Means Committee markup that would require employers to automatically enroll workers in 401(k) plans, IRAs or other retirement accounts or face penalties.

The Wisconsin Democrat said he preferred a narrower bipartisan approach that just had the carrot, not the stick. But if the changes aren’t made, Kind said he wouldn’t let that influence his vote on the broader package. 

“You don't want one tree to take down the entire forest,” he said. 

Outstanding issues 

Pelosi met with Biden at the White House Friday morning. Senate Majority Leader Charles E. Schumer, D-N.Y., whose chamber finished its legislative business for the week Thursday, joined remotely. 

After the meeting, Pelosi cited health care as a policy area where there are “a couple outstanding issues.” 

She also said the tax-writing committees were still discussing the final mix of revenue raisers that would fully offset the package, which is expected to cost around $2 trillion, perhaps a little less. Pelosi suggested the topline was still fluid based on the unresolved spending matters. 

Meanwhile, programs in the bill to combat climate change “are significant and they are resolved,” Pelosi said.

Democrats had been looking at ways to replace a $150 billion "Clean Electricity Performance Program" that would reward or penalize utilities based on their carbon output after Manchin said he wouldn’t support it. 

Biden said at a CNN town hall Thursday night that “nothing has been formally agreed to” but that Manchin was open to ideas for spending the $150 billion on “things that don’t directly affect the electric grid in the way that there's a penalty.”

Instead, Biden proposed funding new technologies like underground high-tension wires that could replace electric wire towers that have been the source of some forest fires in the west. 

Revenue redo

Sinema’s opposition to two of the major revenue raisers in Democrats’ original plan —corporate and individual tax rate increases and a cost saving prescription drug pricing overhaul — has Democrats scrambling for alternatives. 

Together the House Ways and Means and Senate Finance committees have proposed enough potential offsets, but there’s not yet universal agreement on all the pieces that will go into the final package. 

A sweeping proposal to allow Medicare to negotiate prices for hundreds of prescription drugs would have saved roughly $500 billion. Sinema and a handful of other Democrats in both chambers opposed that version, so leaders are now trying to negotiate a more narrow proposal.

Lawmakers involved have been pretty mum on details about where those negotiations stand. But Murphy, one of the House members opposed to the broader plan, said “a lot of conversations are being had amongst the folks who have expressed concern.”

On taxes, Sinema appeared to be the sole opponent to raising rates. Biden said Thursday she’s adamant about that, but is open to raising taxes on the wealthy through other means. 

House Democrats on Friday continued to argue the revenue raisers the Ways and Means Committee marked up in September should provide the bulk of the offsets. House tax writers are especially skeptical about Senate Finance Chair Ron Wyden’s effort to get complex new taxes he’s not marked up in committee into the package. 

[Tax rates tug of war threatens budget package progress]

Wyden's proposals include a 2 percent tax on stock buybacks, minimum corporate tax based on earnings reported to investors and an annual tax on unrealized gains from billionaires’ stock holdings and other assets. Biden mentioned the 15 percent minimum corporate tax during the CNN town hall.

“You're taking a dive on stuff that isn't fully fleshed out,” Rep. Earl Blumenauer, D-Ore., said. “We've been working on these things for months and we start down this path without agreed upon text, understanding what the impacts are. I don't know.”

Ways and Means Chairman Richard E. Neal, D-Mass., said Friday he is “not looking at stock buybacks at the moment” and concurred that a minimum tax on corporate income reported to investors would be tricky. He said those are “esoteric ideas” compared to raising rates, which he said is more “efficient” and “easily implemented.”

In particular, House leaders described Wyden’s proposal to tax unsold wealth of billionaires each year as too unwieldy to legislate now, even though they agreed with it in concept.

His plan would tax publicly traded assets like stock and derivatives annually, and levy a deferral charge on top of taxes on real estate, art and other non-public wealth when they're sold. Wyden, D-Ore., released a 33-page outline of this sort of wealth tax in 2019, but hasn’t publicly produced a bill.

Hoyer said on CNBC Friday that he generally supports the idea of taxing billionaires’ wealth regularly rather than letting it accrue until it’s sold like under current law. He said current law, for example, allows billionaires to borrow against their wealth and then use the gains to pay off the debt, thus escaping taxation.

But Hoyer said how to handle large stock losses is a concern with the plan. “I don’t think that proposal has necessarily been adopted at this point in time,” Hoyer said.

Neal said he has “no philosophical opposition” to taxing billionaires’ assets but he is discussing his concerns about its complexity with the administration.

Kind said he raised the idea of a proposal like Wyden’s with two previous administrations and that “it didn’t fly very far.” It’s difficult to assess an annual charge on stocks or similar assets that fluctuate from month to month, he said. 

“Hard to be introduced in the 11th hour when it’s a new, complicated concept for most members to wrap their head around,” Kind said. “I just don't know how realistic that will be.”

Jennifer Shutt, Lauren Clason, Mary Ellen McIntire and Jessica Wehrman contributed to this report.