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Biden unveils $1.75 trillion spending plan, but divisions delay economic agenda

President Biden on Oct. 28 described the framework for his revised $1.75 trillion social spending bill after long negotiations on his economic agenda. (Video: Mahlia Posey/The Washington Post, Photo: Demetrius Freeman/The Washington Post)

President Biden on Thursday unveiled a new $1.75 trillion package to overhaul the country’s health-care, education, climate and tax laws, muscling through a slew of policy disagreements and internecine political feuds that had stalled his economic plans for months.

But the long-awaited proposal did not prove enough to advance his broader agenda, including a second, separate $1.2 trillion package to improve the country’s roads, bridges, pipes, ports and Internet connections.

The announcement Thursday marked a critical moment in Biden’s tenure, prompting the president to pay another visit to Capitol Hill and issue a call to action to his own party. In a private meeting, Biden told lawmakers they had worked “hours and hours and hours over months and months” on a spending compromise, he recalled later in televised remarks, as the White House labored to broker a truce between Democrats’ warring moderate and liberal ranks.

The call to action at first appeared to galvanize some Democrats, and the new $1.75 trillion framework soon generated praise. It also prompted House Speaker Nancy Pelosi (D-Calif.) to move toward holding a vote on the companion infrastructure bill on Thursday. That latter proposal had been held up by House liberals, who insisted on seeing a final, acceptable version of the safety-net plan before they moved a public-works package that moderates had championed.

“I think we’re going to be in good shape,” Biden told reporters as he departed the Hill.

But House Democrats ultimately scrapped their tentative plans for a vote by Thursday night, as some in the party remained unsatisfied with the process. Some liberal lawmakers continued to believe the framework put forward by Biden still might not have the full support of two moderate holdouts, Sens. Joe Manchin III (D-W.Va.) and Kyrsten Sinema (D-Ariz.), without which their spending plans are doomed. The two senators for months have tried to scale back Democrats’ plans for a package to overhaul health care, education, climate and tax laws.

In doing so, liberal-leaning lawmakers also reaffirmed an earlier threat that they would not vote for an infrastructure bill unless they could also vote around the same time on the rest of their spending priorities. With that legislative legwork unfinished, Pelosi opted to adjourn the House for the week.

The renewed stalemate denied Biden the victory he had hoped to achieve as he traveled abroad Thursday. Shortly after meeting with House Democrats, the president departed for Rome, where he plans to attend the Group of 20 summit of world leaders, before heading to Glasgow, Scotland, for a global conference focused on climate change. Entering those engagements, Biden had hoped to brandish billions of dollars in new aid to combat the deadly consequences of global warming.

Instead, the bickering in Washington now threatens to extend into another week as lawmakers haggle over the president’s agenda, their shared spending priorities and the direction of the Democratic Party itself. As the House prepared to adjourn, Pelosi on Thursday praised progress toward reaching the deal, telling lawmakers in a letter that there is still “good news” in the fact that their efforts are growing in support.

Many of the components in the retooled blueprint originate in the proposals Biden put forward in the spring. The ideas correspond with promises the president and other Democratic candidates made in the course of the 2020 election, when Biden ran on a refrain to “Build Back Better.”

But the policy framework is still a significant departure from the roughly $3.5 trillion that the president and many top party lawmakers once sought. Many of the cuts reflected a deep ideological divide between liberals, who saw this as a fleeting chance to enact an ambitious agenda, and moderates, who repeatedly tried to dial back the spending.

Left-leaning lawmakers led by Sen. Bernie Sanders (I-Vt.) initially hoped to leverage their rare — if razor-thin — majorities in the House and Senate to reshape broad swaths of the U.S. economy. In the earliest days of the debate, they had even envisioned a $6 trillion package that they likened to the Great Society and New Deal programs of generations past.

Yet the party’s liberal bloc ultimately had no choice but to scale back some of its ambitions to assuage Sinema and Manchin. The duo demanded steep spending cuts and other policy changes in exchange for their votes in the Senate, which is divided 50-50 between the parties and where Vice President Harris would break any tie.

Thursday’s new framework includes prekindergarten programs that White House aides described as part of the largest one-time education investment since the creation of public high school. The $1.75 trillion plan also includes new aid to help families afford child care and extends tax credits that millions of parents are receiving in the form of monthly checks.

When it comes to health care, the White House plan expands Medicare to cover new hearing benefits. The plan would lengthen the life of tax credits that have helped roughly 9 million Americans afford health insurance purchased on the Affordable Care Act exchanges. And it would provide new tax credits to help roughly 4 million low-income people afford health insurance in a dozen states that have not expanded Medicaid under the ACA.

The White House has endorsed roughly $555 billion to address climate change, including tax changes that officials said would help the country reach Biden’s goal to halve carbon emissions by 2030. That part of the package is especially critical to the president as he takes part in a major global climate summit next week.

Democrats are hopeful that another $100 billion will be included in the package for immigration measures, bringing its total cost to $1.85 trillion, but that money could be excluded for procedural reasons. The plan includes a provision for undocumented immigrants who arrived before 2010 to apply for a green card, a precursor to citizenship. The Senate parliamentarian has previously rejected such an item, but some Democrats view its inclusion as a placeholder of sorts, potentially to be replaced by a narrower measure that would provide protected status but not a path to citizenship.

In unveiling the details of its new spending plans, White House officials took great care to stress that the entire $1.75 trillion is financed in full. They aim to pay for the package through a variety of new tax policies, including newly proposed rules that require companies to pay a minimum 15 percent tax — seeking to address the fact some profitable, multinational corporations use creative accounting to lower their tax burdens to zero.

The idea is a significant departure from the rate increases Biden initially sought as part of a campaign pledge to unwind the tax cuts enacted under President Donald Trump in 2017. The White House also backed off a plan to apply a new billionaires’ income tax to roughly 700 Americans, including Amazon founder Jeff Bezos and Tesla founder and CEO Elon Musk. (Bezos owns The Washington Post.)

Instead, they proposed a special 5 percent rate for Americans with income above $10 million and an additional 3 percent surtax for those above $25 million.

A long slog still awaits lawmakers to turn their deal into a bill, then shepherd it through Congress, a fraught process where the Democrats’ slim majorities still leave little room for political error. Pelosi has just a three-vote margin, and Senate Majority Leader Charles E. Schumer (D-N.Y.) possesses only a tiebreaking advantage, meaning Democrats must stay together if they hope to deliver a package that Biden in recent days has described as transformational.

In doing so, many Democrats on Thursday seized on the exclusion of some of their top priorities, including a full expansion of Medicare to cover dental and vision in addition to hearing benefits and the loss of a policy that would have provided millions of Americans with new paid parental and sick leave benefits. Lawmakers insisted they would continue fighting for the provisions even after Biden presented the agreement.

As he unfurled the plan to Democrats, though, the president said he expected the framework to gain the Democrats’ support, emphasizing the framework had 50 votes in the Senate. He framed the stakes in the context of the 2022 election.

“I don’t think it’s hyperbole to say that the [Democratic] House and Senate majorities — and my presidency — will be determined by what happens in the next week,” he told House Democrats in a closed-door meetings, according to one person in the room, who spoke on the condition of anonymity because of the sensitivity of the discussions.

One of the longtime holdouts, Sinema, later offered positive comments about the deal, but without committing to vote for it. Manchin, the other centrist skeptic, similarly offered little comment, saying only, “In the hands of the House” when asked about the new framework in the Capitol on Thursday.

But their comments failed to assuage liberals. Rep. Pramila Jayapal (D-Wash.), who heads the Congressional Progressive Caucus, said she expected liberal lawmakers to “enthusiastically endorse” Biden’s new plan — but maintained that the bloc ultimately maintained its belief that the House should consider both bills in tandem.

The architect of the original $3.5 trillion plan, Sanders, encouraged House Democrats earlier in the day to hold off on voting until “clear language” is finalized on the safety-net bill with the support of 50 senators. He said he continues to work to advance issues including a more robust expansion of Medicare, but he also described the $1.75 trillion compromise as transformational, saying it is “the kind of legislation [that hasn’t] passed in Congress since the 1960s.”

The progressive caucus ultimately held its ground, a move that later provoked the ire of centrist House Democrats — offering a renewed sign of the intraparty war still on the horizon.

“Today, the President of the United States called on Democrats to rally together, pass the Bipartisan Infrastructure Framework (BIF), and deliver results to the American people,” said the moderate-leaning Blue Dog Coalition in the House. “Unfortunately, a small number of Members within our own party denied the President — and the American people — a historic win.”

Mike DeBonis and Marianna Sotomayor contributed to this report.