UPDATE: House narrowly approves Biden’s social spending plan

Biden this week signed a $1 trillion package of highway and other infrastructure projects, another priority that overcame months of internal Democratic battling. The president has spent recent days promoting that measure around the country.

On Friday, Biden hailed the passage of the latest bill in the House, calling it “another giant step forward in carrying out my economic plan to create jobs, reduce costs, and make our country more competitive.”

Attempts by Democrats to pass the “Build Back Better” bill late Thursday was foiled by House Minority Leader Kevin McCarthy, R-Calif., who held control of the House floor and blocked the vote for more than three hours before Democratic leaders rescheduled voting for Friday morning.

Democrats appeared to have enough votes to pass the package once the House is able to vote, leaving little suspense as to its final outcome.

McCarthy used his speech to attack the bill, previewing his party’s midterm election messaging.

“For the first time in the country,” McCarthy said, “this generation doesn’t believe they’ll be better off than the generation before them. This bill almost guarantees it. They’re guaranteed they’re going to have to pay more and get less.”

McCarthy began speaking around 8:30 p.m. and, as a congressional leader, was able to continue to hold the floor so long as he kept speaking continuously. At 1 a.m. Friday he was still speaking.

A senior House Democratic aide said the House would end its session when McCarthy ended his speech, and return later Friday morning to resume the vote process.

The surprise last-minute hitch came after months of delays and negotiation among House Democratic moderates and progressives, Senate Democrats and the White House over the bill. During that time, the total price tag was halved to roughly $1.7 trillion, and some of its most progressive policies were cut or trimmed to win the support of centrists.

Why it matters

Still, the social spending bill — which Democrats call “Build Back Better” — would advance numerous priorities that progressives have been seeking for years, including expanding Medicare coverage to include hearing aids, allowing the federal government to negotiate some Medicare drug prices, implementing universal preschool for 3- and 4-year-olds and providing child-care subsidies for most Americans.

Rep. John Yarmuth, D-Ky., called it “the most consequential legislation for American families since the New Deal,” promising that it will “overhaul and reimagine entire sectors of our economy and society so that everyone, not just those at the top, will benefit from a growing economy.”

Republican opposition

But that overhaul — as well as the cost — has drawn strong rebukes from Republicans.

“This is an absolute disgrace,” Rep. Jason Smith, R-Mo., said of the bill. He said some provisions being considered, such as paid family leave and reinstating part of the federal deduction on state and local taxes, would benefit the wealthy at the expense of the middle class. “It will change America as we know it.”

McCarthy warned that the policy is so unpopular, Democrats could lose over 63 seats in next year’s midterm election if they enact it.

His speech, which aroused support from his fellow Republicans, came as McCarthy was facing faced questions about his leadership from some members of his caucus, including allies of former President Donald Trump like Rep. Marjorie Taylor Greene of Georgia, for not punishing members of his party who supported Biden’s infrastructure bill.

After passage in the House, the current bill will go through a gantlet in the Senate, where it will likely be changed, perhaps significantly, to get the support of all 48 Senate Democrats and the two independents. House Democrats would then have to vote again, which could push final passage into late December.

Several policy issues remain unresolved and will need to be addressed before a Senate vote.

Where Joe Manchin stands

The Senate is expected to strip the House’s provision for four weeks of paid family and medical leave due to opposition from Sen. Joe Manchin III, D-W.Va., a key centrist.

The House bill would provide deportation protection to immigrants who have been in the country illegally since before 2011 — a much less ambitious immigration policy than Democrats had hoped for. It is unclear whether the proposal can get through the Senate.

Credit: TNS

Credit: TNS

The bill is also expected to expand the federal deduction on state and local taxes — scaling back a Trump-era policy that has affected many Californians — but there is significant conflict between the House and Senate about how to do so.

The House plan would raise the so-called annual SALT cap from $10,000 to $80,000 through the end of the decade, and revert it back to $10,000 for one year in 2031. Sens. Bernie Sanders, I-Vt., and Robert Menendez, D-N.J., have a separate plan that would merely exempt people from a cap if their income falls under a certain amount, possibly $400,000.

But the idea of lifting the cap has already become a political cudgel for Republicans and even one Democrat, who say it is a reward for the wealthy. Rep. Jared Golden, D-Maine, said he would vote against the bill because of the “SALT giveaway.”

Joe Biden’s agenda

Despite the unfinished business, House Democrats are eager to make a show of progress after weeks of uncertainty over Biden’s agenda. Moderates who held up a vote on the social spending bill two weeks ago as they awaited the final cost estimates quickly fell in line once the figures were released on Thursday.

Earlier this month, Democrats abandoned plans to keep the social spending bill tied to another effort — a measure to address the nation’s crumbling roads and bridges. Biden signed the infrastructure bill into law earlier this week after progressive Democrats relented on their insistence that the two bills be voted upon together.

Progressives said they would place their trust in Biden to deliver the vote in the Senate, where Manchin and Sen. Kyrsten Sinema, D-Ariz., have already negotiated the bill down significantly from the $3.5-trillion plan Democrats once envisioned.

The political futures of both Biden and congressional Democrats are tied up in the two pieces of legislation. The president told congressional Democrats in a closed-door meeting last month that his presidency and their control of Congress may hinge on how the public views the measures. That thought took on even greater urgency as Democrats watched the Virginia gubernatorial election go for Republicans and as Biden’s approval ratings have fallen.

Democrats are already discussing an expansive campaign to sell the package and ensure that voters know it was Democrats who enacted the policies, some of which are expected to be popular.

In order to reduce costs, most of the policies would be in effect for only a few years. That would leave a future Congress — which could be run by Republicans — and White House with the question of whether to renew them or allow them to expire, setting the provisions up as 2024 presidential campaign issues.

The bill may also mark the last major legislative efforts for House Speaker Nancy Pelosi, D-Calif., who said in 2018 that she would not serve as speaker beyond 2022. The universal pre-K and child-care provisions — as well as enhanced subsides in the Affordable Care Act — provide a capstone to her decades-long focus on children and universal healthcare.

Other major pieces of the bill include a one-year extension of the monthly child tax credit, which the White House estimates would reach the parents of 90% of children in America. It would provide health coverage to low-income people in states that did not expand Medicaid under Obamacare, closing the so-called Medicaid coverage gap.

The bill also attempts to address homelessness by funding repairs to public housing and helping low-income people afford housing, although large cities with major public housing projects are more likely to benefit than a low-density public housing state like California.

Much of the bill would be funded through a higher tax on Americans who make more than $400,000 a year, plus an additional 5% tax for those making over $10 million — a policy the White House estimates would apply to 0.02% of Americans. Large corporations would face a new 15% minimum tax on the profits they report to shareholders.

The Congressional Budget Office, which provides nonpartisan economic analyses for Congress, said the bill would add $160 billion to the deficit over a decade. Democrats have said the bill would be budget neutral.

IRS provision

The White House has encouraged Democrats to use its own estimate of the savings from a new Internal Revenue Service policy, which the administration says would generate $400 billion in revenue, rather than the CBO’s $207-billion estimate. Under the White House estimate, the bill would reduce the deficit.

The IRS provision — the agency will get $80 billion over the decade to beef up enforcement of tax evasion — is controversial in more ways than one. Republicans predict that conservative groups and ordinary people will be more likely to have their taxes audited under the policy.

No filibuster

Democrats plan to pass the social spending bill through the Senate using a fast-track legislative process that prevents a GOP filibuster. But the process, called reconciliation, requires that all provisions adhere to Senate rules requiring that all provisions relate to the budget. The process of reviewing the bill for violations could result in more cuts or rewrites.

Democrats quickly found that even without Republicans, crafting the social spending bill was difficult and time-consuming. Disagreements between centrists and progressives bogged down the negotiations. Sinema and Manchin, who voiced concerns about the cost and expansiveness of the plan, became frequent guests at the White House to negotiate with Biden or his staff.

In a 50-50 split Senate, Democrats need every vote to pass the measure, giving Manchin and Sinema extraordinary leverage. Progressives faced pressure to give up many of their long-sought priorities or risk passing nothing at all.

Sinema objected to rolling back President Trump’s cut in the corporate tax rate and allowing Medicare to negotiate a full slate of drug prices.

No free community college

Free community college fell by the wayside as the overall price tag was forced to come down.

Manchin rejected the Clean Electricity Performance Program, which would have encouraged utilities to increase their use of renewable energy through a combination of payments and fines.

The climate provisions that remain would invest about $500 billion into tax incentives and grants that would attempt to move the country away from fossil fuels. While supporters they say it is the most ambitious climate policy ever enacted, it has few competitors, and is far less ambitious than they had hoped for.

In a comparison that causes unease among some moderates and fiscal hawks, many Democrats have likened the bill’s expansive scope and funding to legislation from the New Deal era.

Majority Leader Steny H. Hoyer, D-Md., called the measure “an extraordinary investment, as the president says, a ‘generation-changing’ investment in the lives of average working men and women in this country, and their access to health care, their access to education and access to opportunity.”

Information provided by The Associated Press was used to supplement this report.