Live Updates: Biden Implores Democrats to Embrace $1.85 Trillion Climate and Safety Net Plan


ImagePresident Biden and Speaker Nancy Pelosi at the Capitol on Thursday. The framework leaves out several key planks of the economic agenda that the president laid out on the campaign trail and shortly after taking office.
Credit…Sarahbeth Maney/The New York Times

President Biden pleaded with House Democrats on Thursday to embrace his “framework” for a $1.85 trillion economic and environmental bill, saying its fate would help determine that of his presidency and his party’s hold on Congress, and its success would restore the nation’s standing on the world stage.

The president, who delayed his departure for a trip to Europe to try to nail down an accord on his domestic agenda, used a morning meeting at the Capitol to attempt to rally House Democrats around the emerging deal.

“We have a framework that will get 50 votes in the United States Senate,” Mr. Biden told the group, according to a person familiar with his private remarks. “I don’t think it’s hyperbole to say that the House and Senate majorities and my presidency will be determined by what happens in the next week.”

Later, in public remarks at the White House, Mr. Biden hailed the plan as “historic.”

“No one got everything they wanted, including me,” he said in the East Room before departing on a trip to Rome. “But that’s what compromise is. That’s consensus. And that’s what I ran on.”

Crucial details of the legislation remained in flux, even as the president pushed 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. House leaders were pressing Democrats to vote for the public works legislation later Thursday, in what amounted to a huge gamble for the president and his party that they would be able to pull together their fractious ranks without a final deal in hand.

“We badly need a vote on both of these measures,” Mr. Biden privately told them on Thursday morning, according to the person.

Former President Barack Obama chimed in with a public statement calling the outline “a giant leap forward.”

But liberals were still unsatisfied with a plan that was clearly unfinished — and that omitted many of their cherished priorities.

“What I would say is you have the outline of a very significant piece of legislation — I want us to make it better,” said Senator Bernie Sanders, the Vermont independent and Budget Committee chairman.

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.

In a statement, Ms. Sinema stopped substantially short of such a promise, although she sounded an upbeat note on the talks.

“After months of productive, good-faith negotiations with President Biden and the White House, we have made significant progress on the proposed budget reconciliation package,” she said.

Mr. Manchin did not commit to supporting it either, saying only, “It’s in the hands of the House.”

But one person close to both senators said they had privately indicated that they supported Mr. Biden’s framework.

At the Capitol, the president framed the success of his push as crucial at a time when “the rest of the world wonders whether we can function.”

The package is considerably more modest than the cradle-to-grave expansion of the safety net that the president initially envisioned, having been stripped of ambitious climate change programs and provisions to provide federal paid leave, a broad expansion of Medicare and two years of free community college.

But provisions to provide universal preschool for more than six million 3- and 4-year-olds and subsidies to limit the costs of child care to no more than 7 percent of income for most families would offer a significant boost to the middle class.

And about $555 billion for programs to move Americans to electric vehicles and entice utilities away from natural gas and coal would be the largest federal investment in combating climate change.

Democratic leaders were keen to hand the president a victory before he arrived overseas for a week of summitry. The president planned to attend a climate summit on Monday in Scotland, where he hoped to point to the deal as evidence of the United States’ commitment to tackling climate change.

Democrats 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.

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transcript

Biden Promotes New Spending Framework

President Biden unveiled a revised spending plan in an effort to try to pass a $1.85 trillion social safety net bill and a $1 trillion infrastructure measure.

I’m pleased to announce that after, after months of tough and thoughtful negotiations, I think we have a historic — I know we have a historic — economic framework. It’s a framework that will create millions of jobs, grow the economy, invest in our nation and our people, turn the climate crisis into an opportunity, and put us on a path not only to compete, but to win the economic competition for the 21st century against China and every other major country in the world. It’s fiscally responsible, it’s fully paid for, 17 Nobel Prize winners in economics have said it will lower the inflationary pressures on the economy. And over the next 10 years, it will not add to the deficit at all. It will actually reduce the deficit, according to the economists. I want to thank my colleagues in the Congress for their leadership. We spent hours and hours and hours over months and months working on this. No one got everything they wanted, including me. But that’s what compromise is. That’s consensus, and that’s what I ran on. I’ve long said compromise and consensus are the only way to get big things done in a democracy — important things done for the country. I know it’s hard. I know how deeply people feel about the things that they fight for. But this framework includes historic investments in our nation and in our people.

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President Biden unveiled a revised spending plan in an effort to try to pass a $1.85 trillion social safety net bill and a $1 trillion infrastructure measure.CreditCredit…Sarahbeth Maney/The New York Times

President Biden announced Thursday a revised framework to try to pass a $1.85 trillion social safety net bill and a $1 trillion infrastructure measure, just hours before he planned to leave for a six-day European trip to meet with world leaders.

“After months of tough and thoughtful negotiations, I think we have — I know we have — a historic economic framework,” the president said. “This framework includes historic investments in our nation, and in our people.”

Mr. Biden delivered his remarks from the East Room of the White House after returning from Capitol Hill, where he pleaded with Democratic lawmakers to put aside their differences and vote for both measures as a way of advancing their common agenda.

“No one got everything they wanted, including me,” he said. “But that’s what compromise is. That’s consensus. And that’s what I ran on.”

For Mr. Biden, the announcement of the framework is a major step toward making good on the heart of his campaign promises: to invest in infrastructure, rebuild the social safety net, shrink the gap between the rich and poor and prove democracy can work.

Mr. Biden acknowledged that some parts of his agenda will not get done in the current round of legislation, including free community college and federal paid family leave.

“I know how deeply people feel” about their priorities, he said.

But he began what aides said will be a robust effort to sell the benefits of the plan to the American people, calling it a historic effort that will begin to fundamentally alter the way government provides services to the American public in the years to come.

In concluding his remarks, he urged lawmakers to “get this done” and took no questions from reporters.

“This agenda, the agenda that’s in these bills, is what 81 million people voted for,” he said. “Their voices deserve to be heard, not denied.”

Credit…Sarahbeth Maney/The New York Times

President Biden met with lawmakers on Thursday morning to lay out a framework on a $1.85 trillion effort to spend heavily on climate change, child care and a wide range of other economic programs, paid for by an estimated $2 trillion in tax increases on corporations and high earners, though it was not immediately clear if it has the votes to pass.

White House officials refused to say if all holdout Democrats in Congress had expressed support for the framework, which still may change.

The framework leaves out several key planks of the economic agenda that Mr. Biden laid out on the campaign trail and shortly after taking office. It does nothing to reduce prescription drug costs for seniors, and it omits what would have been the nation’s first federally guaranteed paid family and medical leave for workers. It does not include free community college for all, as Mr. Biden had promised. It would expand Medicare coverage to include hearing, but not vision or dental services.

It also would not raise the corporate tax rate or the top individual income tax rate, and it would not impose a new tax on the unrealized wealth gains of billionaires, as Democrats had recently proposed.

The key provisions of the proposal include:

  • $555 billion to fight climate change, largely through tax incentives for low-emission sources of energy.

  • $400 billion to provide universal prekindergarten to 3- and 4-year-olds, and to significantly reduce health care costs for working families earning up to $300,000 a year.

  • $200 billion to extend an expanded tax credit for parents through 2022, and to permanently allow parents to benefit from the child tax credit even if they do not earn enough money to have income tax liability.

  • $165 billion to reduce health care premiums for people who are covered through the Affordable Care Act, to provide insurance for an additional four million people through Medicaid and to offer hearing coverage through Medicare.

  • $150 billion to reduce a waiting list for in-home care for seniors and disabled Americans, and to improve wages for home health care workers.

  • $150 billion to build one million affordable housing units.

  • $100 billion for immigration streamlining, in part to reduce a backlog of nine million visas. House Democrats proposed provisions last month to address the legal immigration system, including a plan to recapture hundreds of thousands of unused visas various administrations failed to use over several decades and allow green card applicants to pay higher fees to expedite their processing. The investment outlined on Thursday would also expand legal representation for migrants and streamline processing at the southwest border, officials said. Mr. Biden has faced criticism from both Republicans and Democrats for his handling of migration to the border.

  • $40 billion for worker training and higher education, including increasing annual Pell grants by $550.

Offsetting that spending is an estimated $2 trillion in revenue increases, including:

  • A 15 percent minimum tax on the reported profits of large corporations.

  • Efforts to reduce profit-shifting by multinational companies, including a separate 15 percent minimum tax on profits earned by U.S. companies abroad — and tax penalties for companies that have their headquarters in global tax havens.

  • A 1 percent tax on corporate stock buybacks.

  • Increased enforcement for large corporations and the wealthy at the Internal Revenue Service.

  • An additional 5 percent tax on incomes exceeding $10 million a year and another 3 percent tax on incomes above $25 million.

  • Efforts to limit business losses for the very wealthy and to impose a 3.8 percent Medicare tax on certain people earning more than $400,000 a year who did not previously pay that tax.

Credit…Al Drago for The New York Times

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.

On Thursday, the White House rolled out its own set of tax proposals, including a surtax on the wealthiest Americans and a new tax on publicly-traded companies that buy back their own shares.

The frantic attempt to overhaul the complex U.S. tax code remains in a state of flux given the disparate tax proposals being considered — and rejected.

On Wednesday, with Senator Joe Manchin III and some House Democrats expressed reservations about the 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.

But the White House did not throw its support behind that plan and instead proposed a surtax on the very rich. It would differ from the billionaires tax in that it would apply to income, rather than the value of liquid assets like stocks and bonds. Those with incomes exceeding $10 million would face a 5 percent tax and another 3 percent tax would be levied on those with incomes above $25 million.

A second proposal, which Mr. Biden also included in the new framework released on Thursday, 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.

Credit…Stefani Reynolds for The New York Times

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.”

Credit…T.J. Kirkpatrick for The New York Times

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.

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.

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.



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