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Domestic bill talks press on

Handful of issues still need settling by Compiled Democrat-Gazette Staff From Wire Reports | October 23, 2021 at 4:30 a.m.
In this Sept. 28, 2021 file photo, Sen. Kirsten Gillibrand, D-N.Y., speaks during a Senate Armed Services Committee hearing on Capitol Hill in Washington. More than a dozen Senate Democrats are imploring President Joe Biden and congressional leaders to keep a national paid family leave program in his sweeping social services and climate change package. Gillibrand spearheaded the letter and says she's open to negotiating the terms of the program but she'd have a hard time voting for the legislation if it's not included. (AP Photo/Patrick Semansky, Pool)

WASHINGTON -- President Joe Biden and Congress' top Democrats edged close to sealing their domestic legislation Friday, though appearing to let the day's informal deadline slip as they worked to scale back the measure and determine how to pay for it.

Negotiations were expected to continue into the weekend, all sides indicating that just a few issues remained unsettled in the package of social services and climate-change strategies.

Biden met at the White House with House Speaker Nancy Pelosi and Senate Majority Leader Charles Schumer joined by video call from New York, trying to shore up details. The leaders have been working with party moderates and progressives to shrink the once-$3.5 trillion, 10-year package to around $2 trillion in child care, health care and clean energy programs.

Pelosi said a deal was "very possible."

She told reporters back at the Capitol that more than 90% of the package was agreed to: The climate change components of the bill "are resolved," but outstanding questions remain on health care provisions.

Biden wants a deal before he leaves next week for global summits in Europe.

Pelosi said she hoped the House could start voting as soon as next week, but no schedule was set. Democrats had imposed a Friday deadline to at least strike an agreement, but by early evening no deal was announced.

"Much of what we need to do has been written. Just a few decisions now," Pelosi said.

Sticking points appear to include proposed corporate tax increases to help finance the plan and an effort to lower prescription drug costs that has raised concerns from the pharmaceutical industry. Democrats are in search of a broad compromise between the party's progressives and moderates on the measure's price tag, revenue sources and basic components.

At the White House, the president has "rolled up his sleeves and is deep in the details of spreadsheets and numbers," press secretary Jen Psaki said.

Psaki compared the work to starting Social Security and other major federal programs decades ago, and then building on them in following years.

"Progress here is a historic package that will put in place systems and programs that have never existed in our society before," she said, noting the effort to expand child care and provide free pre-kindergarten for all youngsters.

Negotiations are proceeding as Biden appeals to the American public, including in a televised town hall session, for what he says are the middle-class values at the heart of his proposal.

In a Senate that is evenly divided between the Democrats and firmly opposed Republicans, Biden can't afford to lose a single vote. He is navigating his own party's factions -- progressives, who want major investments in social services, and centrists, who prefer to see the overall price tag go down.

"When you're president of the United States, you have 50 Democrats -- every one is a president. Every single one. So you gotta work things out," he said during a CNN town hall meeting Thursday.

Still, he expressed optimism about the process. "It's all about compromise. Compromise has become a dirty word, but bipartisanship and compromise still has to be possible," he said.

Biden said the discussions were "down to four or five issues."

TAXES ISSUE

On one issue -- the taxes to pay for the package -- the White House idea seemed to be making headway with a new strategy of abandoning plans for reversing Trump-era tax cuts in favor of an approach that would involve imposing a 15% corporate minimum tax and taxing the investment incomes of billionaires to help finance the deal.

Biden has faced resistance from key holdouts, in particular Sen. Kyrsten Sinema, D-Ariz., who has not been on board with her party's plan to undo former President Donald Trump's tax breaks for big corporations and individuals earning more than $400,000 a year.

The president was forthcoming Thursday night about the sticking points in the negotiations with Sinema and another Democrat, conservative Sen. Joe Manchin of West Virginia.

While the president said Sinema opposed raising "a single penny in taxes" on the wealthy or corporations, a White House official later clarified that the president was referring to raising the top tax rates, not the range of tax proposals "which Sen. Sinema supports."

If so, that could unlock a key piece of a deal. With a better understanding of the revenue available, Democrats can then develop a topline amount of spending for the package, and adjust the duration and sums for various programs accordingly.

Biden said Manchin doesn't want to "rush" the transition to clean energy so quickly it will result in major job losses in his coal-producing state.

But Biden acknowledged major reductions to his original vision.

He signaled that the final plan would no longer provide free community college, but he hoped to increase Pell Grants to compensate for the loss of the policy.

Republicans have firmly opposed it. Some say it's unfair to offer free tuition to wealthier students at the expense of taxpayers who choose not to attend college. And some Democrats, such as Manchin, want benefits limited to those under certain incomes.

Still, he pledged Thursday that the fight was not over. "I promise you -- I guarantee you -- we're going to get free community college in the next several years and across the board."

Supporters are lobbying to preserve the free community college. They say it would help more Americans earn degrees while also stabilizing the nation's community colleges, which saw enrollments plummet during the pandemic.

Biden also said that what had been envisioned as a federally paid, months-long family leave program would be just four weeks.

Another work in progress -- the idea of expanding Medicare to include dental, vision and hearing aid benefits for senior citizens, is a priority for Sen. Bernie Sanders, the independent of Vermont.

Biden said he likes the idea, but with Manchin and Sinema objecting, the proposal is "a reach."

Instead, Democrats, he said are considering offering senior citizens an $800 voucher to access dental care, as well as another program for hearing aids that Sinema may support. However, the vision care component, Biden said, has been harder to resolve, and there is no consensus yet.

BIDEN, PARTY AIM

Overall, Biden and his party say they are trying to shore up middle-class households, tackle climate change, and have the most wealthy Americans and corporations pay what Biden calls their "fair share" for the nation.

In the mix are at least $500 billion in clean energy tax credits and other efforts to battle climate change, $350 billion for child care subsidies and free prekindergarten, an extension of the $300 monthly child tax credit put in place during the covid-19 crisis, and money for health care provided through the Patient Protection and Affordable Care Act.

The newly proposed tax provisions, though, have rankled Democrats who have long campaigned on scrapping the Republican-backed tax cuts that many believe unduly reward the wealthy and cost the government untold sums in lost revenue at a time of gaping income inequality. Many are furious that perhaps a lone senator could stymie that goal.

Under the changes being floated, the 21% corporate rate would not change, nor would the top individual rate of 39.6% on those earning $400,000, or $450,000 for couples.

However, the White House is reviving the idea of a corporate minimum tax rate that would hit even companies that say they had no taxable income -- a frequent target of Biden, who says they pay "zero" in taxes.

The new tax on the wealthiest individuals would be modeled on legislation from Sen. Ron Wyden, D-Ore., chairman of the Senate Finance Committee. He has proposed taxing stock gains of people with more than $1 billion in assets -- fewer than 1,000 Americans.

The billionaire plan newly under consideration by the Senate faces objections among House Democrats, who already advanced a roughly $2 trillion tax package that included rate increases on the rich and on corporations. Some tax experts are also wary of creating a complicated new system of taxation in a matter of days. House Ways and Means chairman Richard Neal, D-Mass., said the Wyden plan could "become really complex."

"When you do rates, they're efficient and they're easily implemented. Unlike the more esoteric ideas of taxing this or taxing that, rates are simple by nature. People understand them," Neal said. "There's only one proposal on revenue that has passed a legislative body. It's ours."

Currently, wealthy Americans do not have to pay taxes on vast accumulations of wealth because they are taxed only once the asset is sold. Billionaires often borrow against their non-taxed assets, which allows them to spend enormous sums of money while effectively paying very low taxes relative to their incomes and worth.

Under the "Billionaire Income Tax" proposal, a summary of which was obtained by The Washington Post, the federal government would require billionaires to pay taxes on the increased value of their assets such as stocks on an annual basis, regardless of whether they sell those assets. Billionaires would also be able to take deductions for the annual loss in value of those assets.

It would also set up a system for taxing assets that are not easily tradable, like real estate. The tax would apply to billionaires and people earning over $100 million in income three years in a row.

A spokesman for Sinema, John LaBombard, did not confirm or deny her support for the billionaire tax. The spokesman said in a statement that the senator "is committed to ensuring everyday families can get ahead and that we continue creating jobs. She has told her colleagues and the president that simply raising tax rates will not in any way address the challenge of tax avoidance or improve economic competitiveness."

Information for this article was contributed by Lisa Mascaro, Darlene Superville, Alan Fram, Alex Jaffe, Kevin Freking, Zeke Miller, Collin Binkley and Will Weissert of The Associated Press; and by Jeff Stein, Mike DeBonis and Seung Min Kim of The Washington Post.

FILE - In this Sept. 27, 2021, file photo the Capitol is seen at dawn in Washington. Divided Democrats struggling to enact President Joe Biden’s domestic agenda are confronting one of Congress’ cruelest conundrums — your goals may be popular, but that doesn't ensure they'll become law or that voters will reward you.  (AP Photo/J. Scott Applewhite, File)
FILE - In this Sept. 27, 2021, file photo the Capitol is seen at dawn in Washington. Divided Democrats struggling to enact President Joe Biden’s domestic agenda are confronting one of Congress’ cruelest conundrums — your goals may be popular, but that doesn't ensure they'll become law or that voters will reward you. (AP Photo/J. Scott Applewhite, File)
In this Oct. 1, 2021 photo, President Joe Biden and Speaker of the House Nancy Pelosi, D-Calif., walk in a basement hallway of the Capitol after meeting with House Democrats, on Capitol Hill in Washington. Divided Democrats struggling to enact President Joe Biden’s domestic agenda are confronting one of Congress’ cruelest conundrums — your goals may be popular, but that doesn't ensure they'll become law or that voters will reward you.   (AP Photo/J. Scott Applewhite)
In this Oct. 1, 2021 photo, President Joe Biden and Speaker of the House Nancy Pelosi, D-Calif., walk in a basement hallway of the Capitol after meeting with House Democrats, on Capitol Hill in Washington. Divided Democrats struggling to enact President Joe Biden’s domestic agenda are confronting one of Congress’ cruelest conundrums — your goals may be popular, but that doesn't ensure they'll become law or that voters will reward you. (AP Photo/J. Scott Applewhite)
President Joe Biden participates in a CNN town hall at the Baltimore Center Stage Pearlstone Theater, Thursday, Oct. 21, 2021, in Baltimore. (AP Photo/Evan Vucci)
President Joe Biden participates in a CNN town hall at the Baltimore Center Stage Pearlstone Theater, Thursday, Oct. 21, 2021, in Baltimore. (AP Photo/Evan Vucci)
President Joe Biden participates in a CNN town hall at the Baltimore Center Stage Pearlstone Theater, Thursday, Oct. 21, 2021, in Baltimore, with moderator Anderson Cooper. (AP Photo/Evan Vucci)
President Joe Biden participates in a CNN town hall at the Baltimore Center Stage Pearlstone Theater, Thursday, Oct. 21, 2021, in Baltimore, with moderator Anderson Cooper. (AP Photo/Evan Vucci)

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