President Biden’s stalled $3.5 trillion social welfare bill, the subject of intense and prolonged negotiations between moderate and liberal Democrats over possible cuts, is loaded with liberal goodies that would expand the entitlement state.
Sen. Joe Manchin III and other moderates are increasingly frustrated with the White House and far-left Democrats over their reluctance to significantly cut the size and scope of the package.
Mr. Manchin, West Virginia Democrat, argues that liberals have been too ambitious in crafting the package, filling it with policies and programs out of the political mainstream.
“I don’t believe that we should turn our society into an entitlement society,” said Mr. Manchin. “I think we should still be a compassionate, rewarding society.”
Dubbed “human infrastructure,” the $3.5 trillion package is being pitched as the most “consequential” expansion of the federal government since the New Deal.
Among the proposals:
- $108 billion to pay for at least two free years of community college for all students, regardless of citizenship status.
- $450 billion to fund a universal pre-kindergarten program for children ages 3 and 4.
- $225 billion over the next decade to pay for 12 weeks a year of paid family and medical leave.
- $5 million in annual grants to the Small Business Administration for helping “felons transition into entrepreneurs.”
- $1 billion to deploy electric vehicle charging stations across the country.
- $3 billion for a campaign to increase “tree equity” across the U.S. in hopes of further curbing greenhouse gas emissions.
“Our political task is not just to improve life for working families in terms of decent income, health care, education, etc.,” said Sen. Bernard Sanders, a socialist from Vermont. “It is to change the political paradigm so that people demand their full rights as human beings and not just scraps from the table.”
On top of free community college, Mr. Biden is pushing for an additional $80 billion for Pell Grants to help cut tuition costs.
To make it easier for people with children to attend college or reenter the workforce, Democrats have proposed an ambitious child care agenda. Mr. Biden also wants to extend child care subsidies pushed through earlier this year as part of the coronavirus relief package.
Mr. Manchin has said privately that Democrats should pick one or the other to save federal tax dollars.
Liberal Democrats are refusing to even consider the idea. They argue that child care is just as vital as reliable transportation systems for job creation.
“It’s no good to have roads and bridges if people don’t have child care to be able to get to work,” said Rep. Pramila Jayapal, a Washington state Democrat who chairs the Congressional Progressive Caucus.
To complement such provisions, Democrats aim to expand health care programs such as Medicare and institute a nationwide paid family and medical leave framework.
Mr. Sanders has secured provisions to expand hearing, dental and vision coverage for seniors relying on Medicare. The expansion is meant to go “hand in hand” with $400 billion for home care for the elderly.
“Senior citizens in America should not have to be toothless or lack hearing aids or eyeglasses,” said Mr. Sanders. “Dental care, hearing and vision are essential parts of health care.”
Perhaps the most ambitious portion of the package deals with climate change.
Mr. Biden proposes to phase out fossil fuels from electricity production by 2035 to bring the U.S. in line with the Paris climate accords. To meet the goal, Democrats have called for spending $198 billion on a tax credit system for incentives to electric utilities to transition to wind and solar power.
Mr. Manchin has threatened to fight such provisions. He says they would jeopardize energy independence and do nothing about rising energy costs.
“I am all for clean energy, but I am also for producing the amount of energy that we need to make sure that we have reliability,” he said.
Mr. Biden has said that phasing out gas-powered cars will be a significant step toward combating climate change because 29% of all U.S. greenhouse gas emissions come from the transportation sector.
Mr. Biden’s bill earmarks $7.5 billion for the federal government to switch to an all-electric fleet to speed up the transition. A further $7 billion is prioritized for the U.S. Postal Service to transition its mail delivery vehicles to electric.
To ensure there are plenty of workers to plant the trees, Mr. Biden is pushing for the creation of a “civilian climate corps.” Based on the New Deal-era Civilian Conservation Corps, the program would put young Americans to work on green-energy-related projects.
Participants would be paid $15 an hour or more for weatherizing buildings, planting trees and capping oil wells. The program would be an extension of AmeriCorps and is estimated to cost upwards of $3.5 billion.
Republicans say the program should be the first to be cut when Democrats explore ways to whittle down the $3.5 trillion package.
“There is absolutely no reason to funnel money toward a program like this when so many of our industries are already struggling to find workers,” said Rep. Lauren Boebert, Colorado Republican.
Democrats say the $3.5 trillion package would be funded with massive tax increases and does not need to be cut out of concerns for fiscal restraint.
They say the higher taxes on corporations and the wealthy that House Democrats have proposed are more than sufficient to cover the cost of the bill.
“The cost of the … package is zero,” said Ms. Jayapal. “Because it would be paid for by finally making corporations and the wealthiest individuals pay their fair share — which most Americans support.”
The menu of tax hikes discussed includes doubling the federal tobacco tax to more than $2 per pack and boosting the top income tax rate to 39.6% from 37%.
Democrats say they will boost revenue by investing $79 billion to beef up the Internal Revenue Service’s tax enforcement division. As part of the effort, banks would be required to report any financial transactions above $600, including from personal and business accounts, to the IRS.
Overall, the 40 tax hikes would boost federal revenue by $2 trillion over the next decade, Democrats say, adding up to one of the largest tax increases in U.S. history. According to the Joint Committee on Taxation, the proposal even breaks Mr. Biden’s campaign pledge of not raising taxes on individuals making less than $400,000 annually.
The tax hikes would adversely impact not everyone. Newspapers and media outlets with fewer than 750 employees would receive a $50,000-per-year journalist tax break.
Moderate Democrats say the package’s ideological and politically beneficial provisions are preventing liberals from compromising. They say far-left Democrats cannot bring themselves to gut long-sought programs such as universal child care and climate change initiatives.
Ms. Jayapal acknowledged as much during a recent appearance on CBS News.
“We can’t pit child care against pre-K. We can’t pit pre-K against climate change. We can’t pit housing against immigration,” she said. “So all of these priorities need to be in there, and I think we’re kind of coalescing around that.”
Instead of gutting programs outright, Congress should shorten the effective dates to cut costs, liberals say. The programs in the current bill would expire after a decade because of legislative rules.
Moderates say that is unlikely to be enough. For now, they have the upper hand because Democrats can pass the social spending package only via a special process known as budget reconciliation. The process allows some spending and tax measures to avoid the Senate’s 60-vote filibuster threshold and pass with a simple majority of 51 votes.
Because the Senate is evenly split between the parties, every Democrat needs to be on board for the reconciliation package to succeed.