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Tuesday, June 25, 2024 | Back issues
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New tax on wealthy Americans drives wedge at spending bill finish line

The White House has suggested domestic policy dealings will conclude Wednesday, but progressive and moderate senators within the president's own party are still at odds over how to pay for the bill and what it will include.

WASHINGTON (CN) — Before President Joe Biden heads to Europe for a series of summits and high-stakes meetings on the climate, to say nothing of smoothing over America's worst diplomatic strife with France in decades, turmoil over his long-suffering spending package may require a trip first to Capitol Hill.

The detour comes amid new pushback from Democratic Party moderates over a recent proposal by progressive Democrats to fund Biden's ambitious domestic policy goals with a tax on billionaires.

Narrowing the scope of Biden's initial commitment to raise tax rates only on Americans earning more than $400,000, or to lift the 21% corporate tax rate, the billionaires’ tax would affect just 700 Americans, targeting unrealized asset gains for people with more than $1 billion in assets.

For the West Virginia Senator Joe Manchin, however, the bill is still "very convoluted."

“I don't like the connotation that we're targeting different people," he told reporters Wednesday morning.

Along with Arizona Senator Krysten Sinema, Manchin has been the make-or-break vote for Democrats in the evenly split Senate. Vermont Senator Bernie Sanders scoffed at new wrinkle Wednesday, telling reporters, “every sensible income option seems to be destroyed.” 

As tensions ratchet up, and Biden readies for his meeting at the Vatican with the pope on Friday, the White House sent key aides Steve Ricchetti, Louisa Terrell, Brian Deese and Susan Rice to Capitol Hill to meet with Manchin and Sinema. The White House did not rule out the president also making a trip to the hill later in the day or delaying his foreign trip for a few hours to encourage negotiations on the bill. 

Such a meeting would come only a day after Biden, Manchin and Sinema sat down Tuesday night at the White House. 

A White House official close to the negotiations said progress was made and that the White House is "look[ing] forward to next steps so that we can equip Americans for high-paying jobs, deliver historic investments to make health care and child care more affordable for American families, and take on climate change.”

Over months of negotiations with Congress as it aims to address priorities including paid family leave, child care, climate change strategies and Medicare expansion, Biden's spending package has been whittled down to about $1.75 trillion. The bill will be passed by a budget process known as reconciliation that does not require a filibuster-proof majority but in a 50-50 Senate, Biden will need all of the Democrats to pass the bill. 

The reconciliation bill has also been tied to the bipartisan infrastructure bill that includes funding for roads, broadband and other public works. This bill must be passed by Oct. 31 to avoid a gap in funding when federal transportation funds expire. 

White House Press Secretary Jen Psaki pushed back on skepticism from reporters when asked how there could be agreement on the bill Wednesday when so many issues remain in flux. Psaki said that there were agreements between Democrats in Congress over creating a unified path forward to address issues like the care economy, early childhood education, health care access and the climate crisis. 

“What we're talking about is which components of cutting costs and making healthcare more affordable and accessible there is enough agreement on to get this across the finish line,” Psaki said during her briefing. “So those are the final details that need to be worked through and that's what our team’s on the Hill working on.” 

At a separate press conference organized by the Congressional Black Caucus, Congresswoman Joyce Beatty said they had seen progress on many of its priorities. Beatty did not say what on their priority list would be included in the bill but suggested it could include investments in housing, historically black colleges and universities, child care, the child tax credit, and more coverage for seniors and individuals on Medicaid. 

“While it’s not a perfect ending, it is a lot of progress,” Beatty said. 

The White House, Manchin and Sinema have signaled support for a 15% minimum tax for corporations with more than $1 billion in income. 

Follow @KelseyReichmann
Categories / Financial, Government, National, Politics

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