President Biden will go to the Capitol on Thursday to announce he has reached a “framework” agreement for a social safety net and climate change bill that would most likely bolster support for child care and early childhood education while coaxing the economy away from fossil fuels.
Details were still unclear on the precise shape of the package, but people familiar with his plans said the president, who delayed his departure for a trip to Europe to nail down an accord on his domestic agenda, would use a 9 a.m. meeting at the Capitol to rally House Democrats around the emerging deal.
He was pushing to convince liberal members that a final compromise was close enough to allow them to support a separate, $1 trillion infrastructure bill that has already passed the Senate.
One of the people, who spoke on the condition of anonymity, said Mr. Biden expected the plan would secure the support of every congressional Democrat. But at least one lawmaker involved in the talks had been told as of Thursday morning that two crucial holdouts, Senators Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona, had yet to commit to voting for it, according to another person briefed on the discussions, who also spoke on the condition of anonymity.
Representatives for the two senators did not immediately respond to requests for comment.
After speaking to Democrats on Capitol Hill, Mr. Biden was scheduled to deliver remarks from the East Room at the White House before leaving for Rome.
The package that he and top Democrats were expected to lay out is likely to leave some critical issues unresolved, including how to pay for it. And the components that have been agreed to were considerably more modest than the cradle-to-grave expansion of the safety net initially envisioned for a bill that would have been at least twice as large.
But the provisions expected for young children would offer a significant boost to middle-class families that have struggled for decades with economic uncertainty. And the roughly $500 billion expected to be included for programs to move Americans to electric vehicles and entice utilities away from natural gas and coal would represent by far the largest federal investment in combating climate change.
Democratic leaders were keen to hand the president a victory before he departed for Europe this week. The president planned to attend a climate summit on Sunday in Scotland, where he hoped to point to the deal as evidence of the United States’ commitment to tackling climate change.
They also hoped the agreement would be enough to persuade the House’s most liberal members that Congress was on the verge of passing a truly progressive package — and that those liberals, in turn, would join more moderate and conservative Democrats to send the $1 trillion bipartisan infrastructure bill to Mr. Biden for his signature and a much-needed boost for his party.
Some liberals remained adamant that without legislative text — and a clear promise of support from Ms. Sinema and Mr. Manchin — that they would not vote for the infrastructure measure.
Still, the extremely close governor’s race in Virginia was another motivating factor for Democrats to act on the public works bill, according to two House members. The Democratic candidate, the former Gov. Terry McAuliffe, would like to spend the last days of the campaign barnstorming the state to show where new projects would be built.
Liberal members of the House and Senate will most likely have plenty to lament. The centerpiece of Mr. Biden’s climate change policy — a measure to reward utilities for switching to renewable energy and to punish those that won’t — was stripped out at Mr. Manchin’s insistence. One of the biggest social policies in the original package, a $500 billion federal paid family and medical leave benefit, is also expected to go.
The promise of two years of free community college will go unfulfilled, and the expanded child tax credit, passed in March to give most families a $300-per-child income support, is expected to be extended only into 2023, not made permanent.
Other measures remained unresolved, including a widening of Medicare benefits to cover hearing, vision and dental care. A bid to expand Medicaid in the 12 states that have refused to do so under the Affordable Care Act appeared to fall short, but a Senate aide, speaking on the condition of anonymity, said it was likely that the plan would instead include health insurance subsidies through 2025 for people in those states.
Speaker Nancy Pelosi of California has said repeatedly that the final social policy measure will be “for the children,” and she will likely be able to claim she fulfilled that pledge. Under the expected agreement, most families would receive six years of assistance with child care costs, ensuring that a smaller percentage of their total income is devoted to nursery care.
Universal prekindergarten benefits would last even longer, in effect extending public school downward to age 3. For older Americans, the framework is expected to include several years of community and home health care.
It also contains substantial sums for rental assistance, home-buying help, public housing repair and other affordable housing programs.
“We have the biggest investment in housing since the New Deal,” said Representative Pramila Jayapal of Washington, who heads the House Progressive Caucus. “There’s a lot of really good things in this bill, but we have to finish it, and we also have to vote it through.”
The biggest legislative negotiation in years is taking place on Capitol Hill and at the White House, with key holdouts shuttling back and forth, lawmakers locked in intense private meetings and the news media providing minute-by-minute coverage of the developments.
And Republicans in the House and the Senate have absolutely nothing to do with any of it.
Sidelined by budget rules that give majority Democrats full control over the social safety net bill they are trying to push through, Republicans are strictly spectators as they revel in the internal Democratic disputes, snipe at the emerging legislation and game out how best to take advantage of the situation for next year’s crucial midterm elections.
Top Republican lawmakers who are usually mobbed by reporters walk unimpeded through the Capitol corridors while Democrats are chased down for any snippet of the current state of play. The lack of attention has not gone unnoticed.
“We’re a little bit surprised you’re even here today, because we know all the news is being made on the other side,” Senator Mitch McConnell, Republican of Kentucky and the minority leader, told reporters who showed up for his weekly news conference on Tuesday.
It is not an unprecedented situation. As recently as 2017, Republicans went it alone on their Trump-era tax cuts using the budget reconciliation process, which shields legislation from a filibuster, knowing that Democrats would not support the corporate tax breaks that the Republican Party was eagerly handing out. In 2009 and 2010, Democrats had substantial enough majorities in the Senate and the House that they could enact the Affordable Care Act on their own over universal Republican resistance.
Aware that Republicans would never support the kinds of social and climate programs they are trying to enact in the safety net legislation, Democrats are the ones using reconciliation this time. With the shoe on the other foot and with razor-thin Democratic majorities, the one-sided legislating has rendered Republicans virtually irrelevant as Congress debates potentially momentous legislation expected to cost at least $1.5 trillion.
“As somebody who is open to ideas from both sides and works on a lot of different initiatives with Democrats, to really not be involved or engaged in any aspect of it is just really odd,” said Senator Lisa Murkowski of Alaska, who is among the few Republicans who occasionally join with Democrats on important legislation.
But there seems to be no fear of missing out among Republicans, given their hostility to the emerging domestic policy package, which would lead to a level of social spending that is anathema to Republican lawmakers.
“They just have to satisfy their political base to the point where it gets pulled so far left,” Senator John Cornyn, Republican of Texas, said of the Democrats. “Obviously we don’t like being shut out of the policymaking, but that is the choice they made.”
The budget reconciliation process allows Congress to advance certain spending and tax bills on a simple majority vote, freeing lawmakers in the Senate from the 60-vote threshold most legislation must meet to be considered. Democrats are aiming to use the process to pass their sweeping social safety net and climate change measure, which carries much of President Biden’s agenda, in the face of united Republican opposition.
The process begins with a budget resolution, which establishes a blueprint for federal spending and directs congressional committees to write bills to achieve certain policy results, setting spending and revenue over a certain amount of time. Its name refers to the process of reconciling existing laws with those directives. Here are some key things to know about the legislative maneuver.
There are strict rules on what can be included.
While reconciliation allows senators to scale procedural and scheduling hurdles, it is also subject to strict limits that could constrain any package Democrats seek to pass.
In the Senate, the “Byrd Rule,” established by former Senator Robert Byrd of West Virginia, bars extraneous provisions — including any measure that does not change revenue or spending, that affects the Social Security program or that increases the deficit after a period of time set in the budget resolution. It is intended to ensure that the reconciliation process cannot be abused to jam through unrelated policies.
The rule’s name lends itself to a number of bird-related puns commonly used to describe the stages of the process. There is the “Byrd bath,” when the Senate parliamentarian scrubs and analyzes a bill for any provision that violates the rule if a senator raises a concern about a violation. Anything that does not survive the scrutiny is known as a “Byrd dropping” and is removed from the legislation.
Vice President Kamala Harris could overrule the parliamentarian, but that has not been done since 1975.
The legislative math is proving tough for Democrats.
A budget blueprint was advanced in August and committees have been working on drafting the reconciliation legislation, but centrist Democrats in the Senate who have balked at the $3.5 trillion price tag have created an impasse as party leaders try to negotiate a compromise.
Because Republicans have made it clear they are unified in their opposition, Democrats cannot afford to lose even one vote from their party in the Senate. In the House, the math is almost as challenging: If every representative voted, Democrats could afford to lose only three of their members.
As they hunt for revenue to pay for their sprawling spending bill and try to unite a fractured caucus, Democrats are attempting to rewrite the United States tax code in a matter of days, proposing the kind of sweeping changes to how America taxes businesses and individuals that would normally take months or years to enact.
The effort has effectively discarded trillions of dollars of carefully crafted tax increases that President Biden proposed on the campaign trail and that top Democrats have rolled out in Congress. Instead, lawmakers are throwing a slew of new proposals into the mix, including a tax on billionaires, hoping that they can pass muster both legally and within their own party.
The frantic attempt to overhaul the complex U.S. tax code remained in a state of flux on Wednesday, with Senator Joe Manchin III and some House Democrats expressing reservations about a tax on billionaires that was proposed earlier in the day by Senator Ron Wyden of Oregon. On Tuesday, Mr. Manchin shot down a plan that would have given the Internal Revenue Service more visibility into certain taxpayers’ bank accounts in order to catch tax cheats, forcing a group of Senate Democrats who support the provision to try to negotiate a compromise.
Mr. Manchin’s opposition to a new federal paid leave program also appeared to doom its chances of being included in the final legislation, although supporters of the provision said they would fight to keep it intact.
Senator Mark Warner, a Virginia Democrat, acknowledged on Wednesday that the rapid pace of the legislative process posed risks and said it would be preferable to “allow some of this very, very complicated tax policy to get an appropriate airing back and forth.”
The need to roll out new tax proposals stems largely from the concerns of business groups — and moderate Democrats — who effectively killed Mr. Biden’s initial plan to raise the corporate tax rate to 28 percent from 21 percent to pay for his clean energy and social policy initiatives. Other ideas proposed by the White House, including raising the top marginal rate for the wealthiest taxpayers and doubling the capital gains tax, have also been jettisoned.
The new policy proposals include elements of the kind of wealth tax that Mr. Biden shied away from during his campaign in favor of other tax increases. Under the new plan, billionaires, who often pay little to nothing in federal income taxes, would have to pay taxes on the increased value of certain liquid assets, like stocks and bonds, even if those assets were not sold and the gains were not realized. A second proposal, which Mr. Biden has supported in the past, would impose a 15 percent tax on companies that report at least $1 billion in profits to shareholders but have little or no federal tax liability as a result of tax deductions and other loopholes.
If enacted, the taxes would likely apply to fewer than 1,000 companies and individuals. But the breakneck speed at which changes are being considered and crafted is rattling business groups and some powerful Democrats, who have expressed concern about the consequences of moving so quickly.