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Democrats Huddle As Caucus Ascertains What’ll Happen This Week

Talking Points Memo logo Talking Points Memo 10/26/2021 Summer Concepcion
Schumer and Warren © CQ-Roll Call, Inc via Getty Imag Schumer and Warren

Today, both the House and Senate Democratic caucuses have their big meetings. As we’ve seen in recent weeks, these meetings can spur significant forward motion. We’ll be watching what comes out of them this week even more closely than usual — negotiations over the handful of unresolved issues in the reconciliation package have shrunk to, for the most part, include only leadership and the obstinate few (mainly Sens. Joe Manchin and Kyrsten Sinema).

There are deadlines coming up at the end of the week that will make Democrats’ lives harder if reconciliation is still dragging by then. The October 31 expiration of the highway funding extension will set up another pressure point to vote on the bipartisan infrastructure bill, like we saw at the end of September. And the White House really wants all of this finished up in time for President Joe Biden’s sojourn to Glasgow for the UN Climate Summit, which begins Nov. 1.

Following Manchin’s stated opposition to the Medicaid coverage gap plan, Democrats are now pitching an industry-friendly Medicaid workaround to gain the centrist senator’s support.

According to Politico, Democrats are coalescing around a plan that’s more friendly to the private insurance industry. The plan would reportedly offer a few years of subsidized private insurance to uninsured people with lower incomes in states that denied Medicaid expansion under the Affordable Care Act.

Lawmakers, staffers, advocates and lobbyists argue that the latest proposal, which would directly subsidize ACA plans without creating a federal alternative, is the best option to keep the Medicaid provision in the reconciliation package.

Echoing efforts by Sens. Jon Ossoff (D-GA) and Raphael Warnock (D-GA) to convince Manchin to support Medicare expansion, Rep. Sean Casten (D-IL) spearheaded a letter by House Democrats urging Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer (D-NY) to ensure the provision will be included in the reconciliation package.

Warren said that Manchin “is good with” the proposal. Manchin declined to confirm that himself when asked by an NBC reporter:

To be circumspect here, he says that about a lot of stuff. But if Warren is right, it sounds like this proposal has the votes — a big win when payfors have been one of the most vexing and enduring problems for Democrats to agree upon.

The deal on the corporate minimum tax is significant news for Democrats’ domestic policy hopes, but it has to be understood as part of a global effort.

The Biden administration committed to ending what it called the “race to the bottom” of corporate tax rates: the phenomenon by which corporations will legally domicile themselves in low-tax jurisdictions overseas. Tax havens, if you will.

Treasury Secretary Janet Yellen scored a victory here earlier this month, getting Ireland to agree to impose a — you guessed it — 15 percent corporate minimum. If enough countries agree, it could really limit the incentive for massive corporations to domicile themselves wherever the tax burden is lowest.

And, as Sen. Kaine suggested to TPM’s Kate Riga earlier, the global tax floor will be a topic of discussion at the upcoming G20 summit. The Warren-Sinema deal here gives him some ammunition for that event.

Sen. Angus King (I-ME) pegged the revenue the corporate minimum tax could bring in at $300-$400 billion over 10 years.

Sen. Sinema’s statement on her support for the corporate minimum tax measure may seal the deal on that provision’s inclusion in the reconciliation package, though, as we know, it’s not over until the package is voted on and signed.

Reports indicate that it came about thanks to negotiations between Sinema and Sen. Warren, who has long supported the corporate minimum as a way of preventing the country’s largest corporations from using what she has described as “a host of loopholes, deductions, and exemptions” to dramatically reduce their tax burden.

Sen. Sinema, the elusive key Dem vote, said that she’d support the Warren-Wyden proposal to set a tax floor of 15 percent on the country’s largest corporations.

“This proposal represents a commonsense step toward ensuring that highly profitable corporations — which sometimes can avoid the current corporate tax rate — pay a reasonable minimum corporate tax on their profits, just as everyday Arizonans and Arizona small businesses do,” Sinema said in the statement.

To be clear: this is different from raising corporate taxes. If enacted, the proposal would set a minimum that corporations with profits north of $1 billion have to pay, with tax credits preserved to still allow them to poke through the 15 percent floor.

Sens. Warren, Wyden, and King released a new version of their proposal to set a minimum tax for corporations. You can read a fact sheet about the proposal here.

Essentially, the measure would apply to around 200 corporations — those reporting more than $1 billion in profits. What it would do is set a 15 percent floor on taxes paid by those corporations, though, per the proposal, a number of tax credits would still be in effect.

House Speaker Nancy Pelosi (D-CA) told reporters this afternoon that a framework on reconciliation is enough to vote on the bipartisan infrastructure bill — a difference from Jayapal, who has insisted that they need full, back-to-back votes on both bills.

This is important. Last time, the House progressive caucus was helped in its efforts to push off a solo BIF vote by sympathetic congressional leadership. They weren’t really getting any pressure from the top (Clyburn wasn’t even whipping). If that dynamic is different in a few days, it’ll be much harder for progressives to stand their ground.

“I think Leader Schumer is trying to get it done by the end of the day tomorrow,” Kaine tells me. “That’s what he has said he really wants to do. That doesn’t mean everybody else will adjust to his timeline.”

“Everybody wants President Biden to go to the G20 with some sense of momentum for his values and our values,” he added.

Sen. John Tester (D-MT) remained neutral on the billionaire tax proposal, which would bring the unrealized capital gains of billionaires’ under the taxman’s purview.

(more…)

“Sure, there are a lot of ways to talk about exactly how to define it,” Sen. Elizabeth Warren (D-MA) told reporters, referring to Manchin’s stated opposition to the bank reporting requirement.

Asked whether a framework on reconciliation is feasible in the next 48 hours, Warren resoundingly replied “yes.”

“The granularity should be giving you hope. We’re finally talking amongst ourselves down at the ‘can I really live with this’ level in a lot of the detail,” Warren said. “And sure, there are some bumps in that, but the good news is we’re getting pretty far down the road toward a deal that helps give us the things the American people want.”

Sen. Kirsten Gillibrand (D-NY) told reporters that she is “optimistic” about finding an agreement with Sen. Manchin on paid leave. Gillibrand didn’t specify what’s in the new proposal, but said that it’s a different than the one she shared with reporters last night.

Yesterday, Gillibrand said that she is negotiating with Manchin on an “employer-employee matched” system to include paid leave in the final package.

Democrats’ are projecting optimism coming out of their lunch. Sen. Mazie Hirono (D-HI) told reporters that she anticipates a deal on the reconciliation package in the foreseeable future.

“I feel a lot better in terms of we’re going to get to — we’re going to get this done in a week or so,” Hirono said.

Folks, we may have an agreement on the plan to tax billionaires’ unrealized capital gains. Conceptually speaking, that is.

(more…)

Senate Finance Committee chair Ron Wyden (D-OR), one of the architechts of the billionaires tax proposal that would impose an annual tax on unrealized capital gains held by billionaires, told reporters that a paper detailing the proposal will be out tonight.

“I’m pulling out all the stops to get it in,” Wyden said. “I feel very strongly.”

House Speaker Nancy Pelosi (D-CA) and Congressional Progressive Caucus chair Rep. Pramila Jayapal (D-WA) will meet this afternoon, according to CNN.

The meeting between Pelosi and Jayapal comes as Democratic leaders work to reach an agreement on the reconciliation package this week before President Biden heads to the G-20 and then the UN Climate Summit in Glasgow. House Democratic leaders are also hoping to hold a vote on the bipartisan infrastructure bill as soon as tomorrow, but Pelosi reportedly made clear during a private caucus meeting last night that BIF won’t pass without a guarantee that reconciliation can pass in both chambers without any tweaks.

Per a White House official: “This afternoon, the chairs and a number of members of the Tri Caucuses, Women’s Caucus, and Equality Caucus are coming to the White House for meetings with senior staff on BBB.”

The Tri Caucus is made up of the Congressional Asian Pacific American Caucus, Congressional Black Caucus and the Congressional Hispanic Caucus.

Manchin ran into some climate activists on Capitol Hill, telling them that “we’re doing everything we can” to combat climate change. He placed the blame on Asia, saying countries there were the worst polluters.

Manchin has already killed the CEPP, as well as the carbon tax. The methane fee might be his next victim, as he drastically pares back what Democrats can do to mitigate climate change in the reconciliation bill.

After telling reporters that the House Ways and Means committee discussed the billionaires tax in a “very general way” during a meeting today and that a briefing on it will be held once there is legislative text, chair Rep. Richard Neal (D-MA) was pressed on Sen. Manchin stating his disdain for the proposal to require banks to report deposits and withdrawals of some accounts to the IRS in order to find tax cheats.

Neal said that despite Manchin’s opposition to the bank reporting provision, Democrats should be open to hearing the centrist senator out in order to get him to support the reconciliation package.

“I think that it ought to continue to be under discussion if Sen. Manchin is going to go over the goal line with us,” Neal said. “I think that we should be listening to some of what he has to say.”

Earlier today, Manchin told reporters that “no one should be in anyone’s bank account” when stating his opposition to the bank reporting requirement. Democrats have been eyeing the proposal as a revenue raiser for the reconciliation package, following Sen. Sinema’s opposition to taxes for corporations and the wealthy.

Sen. Mitt Romney (R-UT) has been making the rounds in his opposition to the billionaire tax currently being negotiated by Democrats as a potential major revenue stream.

He called it “a really bad idea if you’re encouraging entrepreneurship and job creation” to reporters Tuesday.

He was also spotted chatting to Manchin on the Senate floor; he said in response to a question about the conversation that the two “always” discuss reconciliation.

Manchin expressed coolness towards the methane fee proposal Tuesday morning, describing some of the conversation about it within the caucus as trying “to punish for the sake of punishing.” He did not say that he supported or opposed Sen. Carper’s methane proposal.

Manchin has systematically, and successfully, knocked out Democrats’ biggest climate proposals from the reconciliation bill so far. This morning, climate hawk senators expressed concern about the proposal’s fate, some saying they were still trying to ascertain if it’s even a live ball.

Sens. Jon Ossoff (D-GA) and Raphael Warnock (D-GA) have joined forces to try to convince Manchin to support Medicaid expansion and proposals to get Medicare to cover hearing, vision and dental (though dental is likely to come in some form less than a full benefit).

Ossoff said that he and Warnock are speaking “hourly” on the subject, and that they both spoke with Manchin multiple times over the weekend.

“The people of Georgia are paying taxes for health care that they cannot access while subsidizing health care in West Virginia and other states,” Warnock said, in what’s becoming his Medicaid expansion refrain.

The fight over giving Medicare the power to negotiate prescription drug prices sounds like it’s still a live one, despite Sen. Kyrsten Sinema’s (D-AZ) coolness towards the provision.

“We’re all still talking about it, but I want it understood: I will not accept some kind of fig leaf that somebody wants to call a negotiation,” Sen. Ron Wyden (D-OR) told a group of us.

Taken together with Sen. Chris Murphy (D-CT) telling us that he’s “very optimistic” about the likelihood of getting a deal on the drug pricing negotiations, it sounds like something is coming together. Whether it’ll be enough for both Wyden and Sinema remains to be seen.

Sen. Chris Murphy (D-CT) offered some insight to reporters into what was discussed during a Senate Democrats leadership meeting this morning:

  • Concerns about methane fee being in “jeopardy”
  • A few senators working hard to find a middle ground on prescription drug pricing negotiations, which Murphy is “very optimistic” about

Sen. Sherrod Brown (D-OH) told me that he spoke with President Joe Biden in the Oval Office last week about the effort to make the child tax credit permanently fully refundable, but that it’s not yet locked into the reconciliation package.

I reported on this battle last week, where Sen. Joe Manchin’s (D-WV) insistence on work requirements continues to be the biggest obstacle to making the full credit accessible to the poorest families, no matter how its value changes.

Asked whether he would vote against the reconciliation package if Medicare expansion was chosen over Democrats plan to close the Medicaid coverage in red states, Sen. Raphael Warnock (D-GA) reiterated that Medicaid expansion is a top priority of his.

“I think that what we’re trying to do is find a fix to a problem unnecessarily agreed by the state legislature in Georgia and other non-expansion states and I hope that we can get to a place where the working people of Georgia can rely on accessible, affordable health care,” Warnock told reporters.

Warnock then argued that the Medicaid provision would benefit Sen. Manchin’s home state of West Virginia more than Georgia. Manchin confirmed his opposition to the Medicaid coverage gap plan yesterday.

“At the end of the day, West Virginia is going to get a little bit more than us with this deal, and we’re happy to concede that,” Warnock said, before adding that he’s “still hopeful” that the proposal to close the Medicaid coverage gap will be included.

Pressed on the fate of the methane fee, Sen. Tina Smith (D-MN) stressed that she is working to preserve the emission reducing aspects of the reconciliation package.

“I’m all about getting the emissions reductions that we would’ve gotten with the Clean Electricity plan and there’s a lot of conversations going on about that,” Smith told reporters. “I’m going to continue to push to get the strongest possible emissions reductions in the plan.”

Sen. Tom Carper (D-DE) told reporters that a “methane fee” is “very much” still on the negotiation table as Democrats work to keep climate provisions in the reconciliation package, and as Sen. Joe Manchin (D-WV) works to slice them out. Manchin has already stated his opposition to both the Clean Electricity Performance Program (CEPP) and a carbon tax. Manchin has also, reportedly, stated his resistance to the methane fee.

Methane is a potent climate-change causing pollutant that can escape from natural gas infrastructure.

“For those emitters of methane that don’t want to pay any kind of fee at all, we either streamline technology to help reduce or eliminate those emissions, and if they successfully do that, they won’t have to pay a fee,” Carper said.

House Speaker Nancy Pelosi (D-CA) reportedly also told the caucus during a private meeting last night that Democrats have yet to see the language around the so-called billionaires tax proposal from the Senate, according to CNN. The tax would target the unrealized capital gains of taxpayers with capital assets valued at more than $1 billion.

Democrats began coalescing around the billionaires tax following centrist Sen. Kyrsten Sinema’s (D-AZ) opposition to taxing corporations and the wealthy.

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