We do have new information. We learned that the White House has given up on keeping paid family and medical leave in the deal, and the billionaires’ tax appears to be gone. The White House acknowledged that the provision allowing the government to negotiate prescription drug prices doesn’t have enough support.
Those are tough losses. But there’s a lot of good in the emerging framework. First of all, the White House committed to a set of revenue raisers that could help combat inequality and reorient our political economy. And a lot of good climate provisions remain in the bill.
Here are the highlights of what the White House says is in the framework:
Child care, health care and the care economy:
- Extending the expanded child tax credit, but only for one year, through 2022.
- Universal pre-K, authorized for six years.
- Child-care funding that will ensure that families of four earning less than $300,000 per year will pay only up to 7 percent of income on child care for kids under 6 years old.
- Funding to reduce premiums for 9 million who buy insurance on the ACA marketplaces by $600 per person per year, through 2025.
- Closing the Medicaid coverage gap in red states that haven’t expanded Medicaid, but not with the original proposal: Instead, subsidies will be offered through the Affordable Care Act exchanges.
- Expanding Medicare to cover hearing. Vision and dental may be out.
- A new 5 percent surtax on income above $10 million and an additional 3 percent surtax on income above $25 million.
- Corporate minimum tax of 15 percent on corporations of a billion dollars or more.
- Global minimum tax of 15 percent on foreign profits of U.S. corporations, to curb multinational corporations from shifting profits overseas.
- Funding for the Internal Revenue Service to crack down on wealthy tax cheats.
- One percent tax on stock buybacks.
- Tax credits for clean energy production, such as wind, solar and electric cars, and tax credits on solar panels and electric vehicles. The White House announced a $555 billion investment.
Provisions that have been cut out of the deal:
- Medicare negotiating the prices of prescription drugs.
- Paid family and medical leave.
- Billionaires’ tax.
It appears that Manchin has been given much of what he wanted. He objected to paid leave and the billionaires’ tax; both are out.
Sinema, too, has gotten her way on key matters: Obviously, hikes on corporate and high-income tax rates, as originally conceived, are gone. But there is a new form of rate increase in the surtax.
What remains unclear is whether Sinema will agree to this. On the call, White House officials said they were “confident” this framework will get 50 senators. That seems to mean a private deal has been reached with Sinema in principle to support these new rate hikes.
Here’s what the White House isn’t saying. It will not say whether Biden is pushing for a vote on the bipartisan infrastructure bill before he departs abroad, and before a final deal on the Build Back Better reconciliation bill is finalized and the bill written.
“He’s calling for each bill to pass when it comes up for a vote,” one White House adviser told reporters, adding that Biden would defer to House Speaker Nancy Pelosi (D-Calif.) on timing.
Obviously, that’s cagey on whether Biden is privately urging Pelosi to hold the infrastructure vote first. Pelosi’s office has not said what she will ask for. This means the matter might still be in the hands of progressives — if they vow to sink the infrastructure bill until there’s a text on the reconciliation one, the former might still be put on hold.
An aide to a senior progressive House member tells me the Congressional Progressive Caucus still wants to see a final reconciliation bill that’s agreed to by all centrists before agreeing to a vote on the infrastructure bill.
The aide also says progressives want a side-by-side vote on the two bills. The aide predicted that around 50 progressive members will vote no on infrastructure if those conditions aren’t met.
So there might not be any infrastructure bill vote yet, though Pelosi hasn’t made her position known, which might change things.
The big picture here is that, while there is still no certainty that Manchin and Sinema will support this package, it appears the rough outlines are there for a deal. We do lose a lot of good things, but the investments in climate, children, health care and education will arguably amount to the most ambitious economic and social policy bill in decades.
And while the failure to raise corporate and high income tax rates is a loss, the provisions on taxes could also be transformative. The corporate minimum tax will hopefully curb tax gaming by profitable corporations, and the very high-end tax hikes plus the IRS cracking down on tax cheats might begin to reorient our political economy, if only a bit.
The global minimum tax could point a way toward a salutary multilateralism that strives for economic fairness. If Biden can lead at the global climate conference in Glasgow, and persuasively make the case to other countries that the new climate provisions constitute a genuine U.S. commitment, that and the global minimum tax might contain the seeds of a constructive new liberal internationalism.
Of course, Manchin and Sinema have to agree to the deal first.