Big changes in White House ideas to pay for $ 2 trillion plan – NBC10 Philadelphia


In abrupt change, the White House on Wednesday launched new plans to pay off part of President Joe Biden’s $ 2 trillion climate change and social services package, suspending a proposed sharp increase in tax rates for corporations while also adding a new billionaire tax on the investment earnings of the wealthiest Americans.

The reversal came as Biden returned to his hometown of Scranton, Pa., To highlight middle-class values ​​that he says are at the heart of the package Democrats are striving to complete. Biden faces resistance from major dissenters, including Sen. Kyrsten Sinema, D-Arizona, who disagreed with his party’s plan to reverse Trump-era tax breaks to help pay them.

“It was declared dead on arrival from the time I presented it, but I think we’re going to surprise them because I think people are starting to understand what’s at stake,” Biden said in a speech at the Electric City Trolley in Scranton. Museum, his first visit to his home since becoming president.

Negotiations between the White House and Democratic leaders on Capitol Hill are underway over what is now a shrunken package, but would still be an unprecedented federal effort to expand social services to millions of people and deal with the growing threat of climate change. It’s associated with a separate $ 1,000 billion bill to update roads and bridges.

Biden and his Democratic Party have given themselves a deadline to strike a deal after working to fill his once-vast $ 3.5 trillion vision favored by progressives with a more limited focus that may win over the party’s centrists. He has no Democratic votes to spare to move through the heavily divided Congress, and leaders want a deal by the end of the week.

The proposed new tax provisions, however, are likely to embitter progressives and even some moderate Democrats who have long campaigned to undo the 2017 GOP tax cuts that many say unduly reward the wealthy, costing the federal government. untold amounts of lost income at a time of glaring income inequality.

Administration officials spoke to congressional leaders about tax alternatives, according to a person familiar with the private talks and granted anonymity to discuss them. The changes may be needed to convince Sinema, who had opposed plans to hike rates by corporations and high net worth individuals earning more than $ 400,000 a year, the person and several others said.

Right now, the corporate tax rate is 21% and Democrats want to raise 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 interest rate of 21% would remain the same.

However, not all revisions would be positive for big companies and the wealthy. The White House is reviving the idea of ​​a minimum corporate tax rate, similar to the 15% rate Biden proposed earlier this year. It’s even for companies that say they have no taxable income – a frequent target of Biden who complains about paying “zero” tax.

And there could be a new tax for billionaires, modeled after the legislation of Sen. Ron Wyden, D-Ore., Chairman of the finance committee, who proposed taxing stock gains of those overdue. ‘a billion dollars in assets – less than 1,000 Americans.

Sinema has not publicly stated his position and his office did not respond to a request for comment.

Another key Democrat, Conservative Senator Joe Manchin of West Virginia, has said he prefers a 25% corporate rate. He withheld his support for the bill with additional objections to its provisions on climate change and social services.

During the call with the administration and the White House, Wyden said he “stressed the importance of ending the two U.S. tax codes and finally showing workers in this country that the richest Americans are going. pay taxes like they do. ”

The possible change comes as Democrats appear to have moved forward in uniting, ready to ditch what was a nobler package in favor of a smaller, more workable proposal around which the party can unite.

In the mix: at least $ 500 billion to fight climate change, $ 350 billion for subsidies for child care and free preschool, a new federal program for at least four weeks of paid family leave, a one-year extension of the $ 300 monthly children’s tax credit put in place during the COVID-19 crisis and funding for health care provided through the Affordable Care Act and Medicare.

Likely to be wiped out or razed: plans for a tuition-free community college, a path to permanent legal status for some immigrants to the United States, and a clean energy plan that was the centerpiece of Biden’s strategy to fight against climate change.

“Nothing is decided until everything is decided,” said Rep. Pramila Jayapal, D-Wash., Leader of the Congressional Progressive Caucus after a morning meeting of House Democrats. “We’re just trying to do it.”

Democrats are increasingly worried about having little to show voters despite their campaign promises and have struggled to explain what they are trying to do with the massive package, made up of so many different proposals.

It’s a tall order that led to a total push on Wednesday to answer the question – “What’s in this damn bill?” – as said in a press release from Senator Bernie Sanders, the Vermont Independent.

The president is particularly keen to advance his national signing program to strengthen federal social services and tackle climate change ahead of his departure for a world climate summit next week.

Representative Ro Khanna, D-Calif., A progressive caucus member, said: “He really believes in American leadership, American prestige is at stake.”

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.

On other fronts, to preserve Biden’s initial sweep, Democrats are set to keep many programs but reduce their duration to cut costs.

Biden wants to extend the $ 300 monthly child tax credit that was put in place during the COVID-19 crisis by one year, rather than letting it expire in December, but not as long as Democrats wanted .

What had been envisioned as a federal paid family leave program lasting several months could be reduced to just four weeks – an effort to at least start the program rather than eliminate it.

Biden also wants to secure funding for health care programs, including home and community health care services, by supporting a move away from generalized nursing home care.

And a new program to provide dental, vision and hearing benefits to people on Medicare offered by Sanders, is likely to stick in a certain way.

Biden told lawmakers that after his top priorities, there would be $ 300 billion left.

This could reduce the overall price or be used for other programs.

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

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