White House, Dems hastily rework $ 2 trillion Biden plan


WASHINGTON (AP) – The White House and Democrats are hastily reworking key aspects of President Joe Biden’s $ 2 trillion domestic policy plan, cutting back on social services and climate change programs and rethinking new taxes on businesses and the rich to pay a reduced flat rate.

The changes come as Biden calls more forcefully on the American public, including in a televised town hall on Thursday, for what he says are middle-class values ​​at the heart of his proposal.

Biden mentioned during the evening of the challenge he faces in fighting over sharply divergent factions in the Democratic Party to agree on the final contours of the bill. With an equally divided Senate, he cannot afford to lose a single voice, and he sails between the competing demands of the progressives, who want major investments in social services, and the centrists, who want to see the price of the package drop. . .

“When you are President of the United States, you have 50 Democrats – each is President. Each. So you have to work it out, ”he told a CNN town hall.

Still, he expressed optimism about the process, saying “I think so” when asked if Democrats were close to a deal.

“It’s all about compromise. Compromise has become a dirty word, but bipartisanship and compromise have yet to be possible, ”he said.

Biden later said the talks were “reduced to four or five issues.”

On one issue – taxes to pay for the package – the White House idea seemed to be moving forward with a new strategy of scrapping plans to reverse Trump-era tax cuts in favor of an approach that would involve taxing the investment income of billionaires to help finance the deal.

Biden has faced resistance from major dissenters, particularly Sen. Kyrsten Sinema, D-Arizona, who disagreed with his party’s plan to reverse President Donald Trump’s tax breaks for large businesses or individuals earning more than $ 400,000 per year.

The president was unusually open Thursday night about sticking points in negotiations with Sinema and another key Democrat, Conservative Senator Joe Manchin of West Virginia.

While the president said Sinema “will not raise a single penny in taxes” on the rich or on corporations, a White House official later clarified that the president was referring to the increase in tax rates. highest tax, not the range of tax proposals “that Senator Sinema supports.”

Biden said Manchin did not want to “rush” the transition to clean energy so quickly that it would result in significant job losses in his coal-producing state.

Even though he seemed encouraged by the progress, Biden recognized major reductions from his original vision. He reported that the final plan would no longer provide free community college, but said he hoped to increase Pell Grants to make up for the loss of the policy.

“It’s not going to give us everything, but it’s a start,” he said.

He also said what had been envisioned as a multi-month family leave program paid for by the federal government would only last four weeks.

As longed-for agendas are adjusted or eliminated, Democratic leaders are working to bring talks to a quick conclusion, possibly in the days to come.

Talks between the White House and Democratic lawmakers are focused on reducing what was a $ 3.5 trillion package to around $ 2,000 billion, in what would be an unprecedented federal effort to expand social services to millions of people and face the growing threat of climate change.

“We have a goal. We have a timetable. We have milestones and we’ve all hit them, ”said House Speaker Nancy Pelosi, D-Calif., Who predicted Thursday,“ It will pass soon. “

A sharp change in course came on Wednesday night when the White House proposed new ways to pay for parts of the proposal.

Biden himself has signaled flexibility on the tax provisions of the bill, as long as he gets paid and doesn’t raise taxes for those earning $ 400,000 or less.

“I’m ready to make sure we pay for everything,” he said when asked which tax proposal he would support.

The proposed new tax provisions, however, are likely to embitter progressives and even some moderate Democrats who have long campaigned to abolish Republicans-backed 2017 tax cuts that many say unduly reward the rich and cost the wealthy. government of untold amounts of lost revenue at once. gaping income inequality. Many are furious that perhaps a single senator can thwart this goal.

Tax Drafting Ways and Means Committee chairman Rep. Richard Neal, D-Mass., Said he spoke for more than 30 minutes with the centrist Arizona senator, whose narrow opinions are a mystery to her colleagues .

“I said, Kyrsten, you and I both know it’s got to be okay. She said, “I couldn’t agree more,” “Neal told reporters on Capitol Hill.

Sinema’s office did not respond to a request for comment.

Under the current law adopted in 2017, the corporate tax rate is 21%. Democrats had proposed raising it to 26.5% for companies making more than $ 5 million a year. The top tax rate would drop from 37% to 39.6% for those earning over $ 400,000, or $ 450,000 for married couples.

Under the proposed changes, the corporate rate would not change. But not all of the revisions would be positive for big business and the wealthy.

The White House is reviving the idea of ​​a minimum corporate tax rate, similar to the 15% rate Biden proposed this year. It’s even for companies that say they have no taxable income – a frequent target of Biden, who complains of paying “zero” tax.

The new tax on the richest people would be modeled after the legislation of Senator Ron Wyden, D-Ore., Chairman of the Senate Finance Committee. He proposed taxing stock gains of people with more than $ 1 billion in assets, or less than 1,000 Americans.

Other tax options are also being considered, and Democrats are almost certain to include a provision to strengthen the Internal Revenue Service to prosecute tax evaders.

Biden and his party are trying to shore up middle-class households, tackle climate change and stem the trend of rising income inequality.

At least $ 500 billion to fight climate change, $ 350 billion for free child care and preschool subsidies, a one-year extension of the $ 300 monthly child tax credit put in up during the COVID-19 crisis, and money for health care provided by the Affordable Care and Medicare Act.

The president is particularly keen to push legislation forward before he leaves next week for a world climate summit in Scotland.

Manchin has made it clear that he opposes the president’s initial energy plan, which involved forcing the government to impose sanctions on electric utilities that fail to meet clean energy standards and provide financial rewards to those who do.

Instead, Biden is focused on providing at least $ 500 billion in tax credits, grants, and loans to power producers who meet emission reduction targets.

Democrats also want to add funding to provide dental, vision and hearing benefits to people on Medicare, proposed by Sen. Bernie Sanders, I-Vt.


Associated Press editors Alex Jaffe, Kevin Freking, and Josh Boak contributed to this report.

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