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Democrats launch possible $ 2.5 trillion compromise reconciliation framework

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Democratic leaders laid out the outlines of a spending reconciliation framework and $ 2.5 trillion in tax cuts before senators left last week for a brief hiatus, in hopes that the whole of the caucus would accept a slightly lower price.

At a caucus meeting last Thursday with Senate Democrats, leaders launched a about $ 1.5 trillion in new spending for programs like child care, housing, climate policies and Medicare extensions, according to presentation slides obtained by HuffPost and key Senate advisers familiar with the presentation.

The bill would also provide about $ 1 trillion in “tax cuts for working families” – including an extension of the strengthened child tax credit, subsidy credits of the Premium Act. affordable care and tax credits for housing and clean energy. Overall, the price of the bill would be around $ 2.5 trillion.

Conservative Democrats continue to block passage of President Joe Biden’s $ 3.5 trillion Build Back Better plan, a sweeping proposal that would invest heavily in climate policies, parenting benefits, child care and pre-K universal, as well as housing and Medicare and Medicaid extensions.

The presentation offers a possible high-level figure of compromise that executives, including Biden, have been voicing for weeks.

White House Director of Legislative Affairs Louisa Terrell, Advisor to President Steve Ricchetti and National Economic Council Director Brian Deese leave a meeting with Senator Kyrsten Sinema (D-Arizona) in the Hart Senate office building on the Capitol Hill in Washington, DC, September 29.

Chip Somodevilla via Getty Images

“This presentation was Chief Schumer briefing Senate Democrats on what President Biden presented to House Democrats the week before,” said Justin Goodman, spokesperson for Senate Majority Leader Chuck Schumer (NY) .

But even $ 2.5 trillion is more than what Senators Joe Manchin (DW.Va.) and Kyrsten Sinema (D-Arizona), the two most conservative Democrats in the Senate, say they will support.

Manchin issued an expenditure figure of $ 1.5 trillion. Sinema refuses to divulge a prominent number to her colleagues in the Senate, but she would be comfortable with a number below the $ 2 trillion mark.

“As with any bill of such historic magnitude, not all members will get everything they want,” Schumer said in a caucus letter Thursday, while the senators were in their home countries. . “I deeply appreciate the sacrifices made by each of you.”

Some members of the Senate and administration are hoping Manchin and Sinema will partner with $ 1.5 trillion in new spending for the reconciliation bill and exclude lost revenue due to tax cuts in their calculations of the overall price.

But Democrats remain skeptical that even this framework would be enough to fully rally the two senators. Democrats need their 50 senators to agree on the reconciliation bill for it to pass. The proposal has no Republican support.

“Since Manchin and Sinema’s demands were a little more publicized, people were wondering what the fanciful ways were to get $ 2.5 trillion while still hitting their bottom line? A Democratic aide familiar with the situation told HuffPost.

Sinema and Manchin have both been in direct talks with the White House. Their offices did not return HuffPost’s requests for comment on the proposal.

Committee staff, who originally expected to do a heavy break during the break week to craft the reconciliation bill, were rather inactive, awaiting direction from Senate leadership – and Manchin and Sinema – on the overall spending numbers they should be working on.

In recent days, Congressional Democrats have been consider what to cut from Biden’s Build Back Better outline in order to reduce the number of first line to the taste of Sinema and Manchin. House Speaker Nancy Pelosi (Calif.) On Monday said Democrats will have to start making the “tough decisions” of deciding which policies are worth investing more and which proposals might need to be scrapped together.

Democrats launch possible $ 2.5 trillion compromise reconciliation framework
Democrats have proposed a possible compromise framework that would include roughly $ 1.5 trillion in spending on programs like child care and affordable housing.

Screenshot / Senate Democrat Caucus slides

But they didn’t pull a trigger. Progressive lawmakers have made it clear that they do not support removing major pillars from the agenda. It risks losing the support of more lawmakers, all of whom want the issues most important to them included, from investments to affordable housing to home care for elderly Americans.

But even as Manchin and Sinema team up with complex calculations to reduce the perceived price of spending on the bill, the question remains what needs to be “paid” in the proposal. The Democrats’ presentation said that “the framework of compromise would fully pay for the expenses of the Build Back Better Act” through increased tax enforcement, international and national corporate tax reform, drug pricing reform, etc.

While Manchin is open to the sources of income on offer, the senator said he not only wanted the bill to be fully paid, but he also wanted to pay off some of the country’s debt.

Meanwhile, Sinema doesn’t even support some of the party’s ways to increase income – even those Manchin agrees with.

Drug price reform is a potentially major hurdle: The Arizona senator has reportedly aligned with drug companies in opposing the Democrats’ plan to allow Medicare to negotiate drug prices, a hugely popular proposal that could bring in hundreds of billions of dollars in revenue. Manchin is more open to such reforms.

Likewise, Manchin seems much closer to the rest of the Democratic Party when it comes to taxing businesses, while Sinema opposes it. Meanwhile, Manchin, who has strong ties to West Virginia’s coal industry, is much more reluctant to tackle carbon pollution than Sinema.

Democrats set a deadline for reconciliation negotiations at the end of October, when House leaders said they would vote on the bipartisan infrastructure bill passed by the Senate.

But until Sinema and Manchin clarify what they will support, negotiations remain at a standstill.

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