Democrats see tax ‘framework’ to pay for huge $3.5T package
WASHINGTON — The White House and congressional Democrats have agreed to a framework of options to pay for their huge, emerging social and environment bill, top Democrats said Thursday. Now they face the daunting task of narrowing the menu to tax possibilities they can pass to fund President Joe Biden’s $3.5 trillion plan.
Senate Majority Leader Chuck Schumer of New York and House Speaker Nancy Pelosi of California announced the progress as Biden administration officials and Democratic congressional leaders negotiated behind the scenes. The package aims to rewrite tax and spending priorities to expand programs for Americans of all ages, while upping efforts to tackle income inequality and fight climate change.
Staring down a self-imposed Monday deadline, lawmakers said they would work nonstop to find agreement on specifics. Democrats’ views on those vary widely, though they largely agree with Biden’s idea of raising taxes on corporations and the wealthy to fund the package.
“We certainly think it’s progress,” Biden press secretary Jen Pskai said at the White House.
Biden has been putting his shoulder into the negotiations, inviting more than 20 of his party’s moderate and progressive lawmakers to the White House for lengthy meetings this week. He’s working to close the deal with Congress on his “Build Back Better” agenda at a time when his presidential campaign promises are running into the difficulty of actually governing.
But the party has been divided over many of the details.
Moderate Democrats, most prominently Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, are demanding that the massive dollar total be reduced. The revenue options to pay for it — that mostly means taxes — being considered can be dialed up or down, the leaders say. The ultimate price tag may certainly slip from the much-publicized $3.5 trillion.
Republicans are solidly opposed to the package, calling it a “reckless tax and spending spree.” So Democrats will have to push it it through Congress on their own, which is only possible if they limit their defections to a slim few in the House and none in the Senate.
“We’re proceeding,” Pelosi said. “We intend to stay the course and pass the bill as soon as possible.”
The congressional leaders huddled early Thursday with the chairmen of the tax writing committees to agree to the framework, pulling from work already being done on those panels. They are intent on sticking to Biden’s pledge not to raise taxes on people making less than $400,000 a year.
Rep. Richard Neal, D-Mass., the chairman of the House Ways & Means Committee, has already drafted his version, which would raise about $2.3 trillion by hiking corporate tax rates to 26.5% for businesses earning more than $5 million a year and increasing the top individual tax from 37% to 39.6% for those earning more than $400,000, or $450,000 for married households.
The House panel’s bill also includes a 3% surtax on the adjusted incomes of very wealthy people making more than $5 million a year.
The Senate Finance Committee under Sen. Ron Wyden has not yet passed its bill, but has been eyeing proposals that further target the superrich including efforts to curtail practices used to avoid paying taxes.
“I’m not going to get into any specific stuff today, but I’ve made it very clear as chairman of the Finance Committee a billionaire’s tax will be on the menu,” Wyden said.