President Joe Biden’s economic agenda took a step forward Thursday as House Democrats advanced several major expansions of the safety net, with tougher battles ahead on how to pay for the new benefits.
The House Ways and Means Committee voted to approve 12 weeks of paid family leave for American workers and a mandate to enroll employees in tax-deferred retirement accounts. The committee also approved child care grants to states to expand access to child care by improving buildings and raising wages.
In addition, the Education and Labor Committee was on track to approve on Friday $761 billion in benefits, including $450 billion for child care and universal pre-K education and $111 billion to provide two free years of community college.
More votes are planned in coming days, including on tax credits and rates as well as drug-price provisions and Medicare benefits. Once committees’ work is finished, it will get merged together in a bill the House intends to pass later this month with as much as $3.5 trillion in social spending.
Republicans warned that the legislation creates new burdens on employers and that the taxes to be unveiled in coming days would lead to an economic downturn. Their unified opposition to the Biden package means that House Speaker Nancy Pelosi can only afford three “no” votes when the bill comes to the floor.
“This is an historic moment to make investments that reflect what we’ve learned during the pandemic so that the American people will be healthier and our economy will be more inclusive and resilient for generations to come,” said Ways and Means Chairman Richard Neal, a Massachusetts Democrat.
One red flag for Pelosi emerged Thursday, as Representative Stephanie Murphy, a moderate Democrat from Florida, said she voted against family leave and other benefit proposals in committee because she has not yet seen enough of the Biden economic package.
‘Rushed’ process
Murphy, a leader of the fiscally conservative Blue Dog Caucus, said during a House Ways and Means Committee meeting that the process has been “rushed” and she cannot evaluate the benefits without knowing the total cost and tax increases used to pay for it.
In the Ways and Means committee, GOP lawmakers offered dozens of amendments to the legislation, arguing it was hastily drafted and could be open to fraud and abuse.
Biden, Pelosi and Democrats “are ramming through trillions of wasteful spending and crippling tax hikes that will that will drive prices up even higher, kill millions of American jobs and drive them overseas, and usher in a new era of government dependency with the greatest expansion of the welfare state in our lifetimes,” said Kevin Brady of Texas, the top Republican on the Ways and Means panel.
Elsewhere on Capitol Hill, the Small Business committee approved a $25 billion portion of the bill directing grants to businesses in underserved communities. The Natural Resources Committee approved its $25.6 billion slice of the measure, which includes funds aimed at protecting the Arctic National Wildlife Refuge and the Outer Continental Shelf from future fossil fuel drilling.
The Energy and Commerce committee also unveiled its own plans to expand Medicare, Medicaid and Obamacare benefits.
The panel is proposing to extend the Affordable Care Act’s tax credits for the first time to the millions of people who make too much money to qualify for Medicaid in states that haven’t expanded their public health insurance programs, until a federally run Medicaid program can be created in 2025. It is also proposing to allow Medicare to negotiate drug prices and to penalize drugmakers for rapid drug-price increases.
Tax credits
Energy portions of the draft bill would finance a large expansion of electric-vehicle tax credits and send grants to utilities to convert to more environmentally friendly sources of energy.
The benefit expansions approved or unveiled Thursday are the easier part of the legislative process for Democrats. Far more difficult is uniting around changes to the tax code, including proposals to raise capital-gains levies and ease the $10,000 cap on the state and local tax deduction.
Those talks continued behind the scenes on Thursday, with the possible release of proposals for tax credits as soon as Friday and details on tax increases potentially delayed until the weekend or early next week.
Neal said Ways and Means Democrats have “pretty much reached an accord with ourselves” on tax provisions and are now working to align themselves with the Senate and White House.
“This is really a three-institution negotiation,” Neal said.
Neal said he speaks to Senate Finance Chairman Ron Wyden daily and Treasury Secretary Janet Yellen regularly.
“I think we are headed to an agreement,” he added.
Complicating work in the House are obstacles in the Senate, where moderate Democrats Joe Manchin of West Virginia and Kyrsten Sinema of Arizona are objecting to the proposed $3.5 trillion price tag of the legislation.
House moderates want to avoid voting on any legislation that cannot pass the Senate, so there are efforts to make sure the Senate has input into whatever the House drafts before the House vote this month on the full bill.
“Getting the Senate and the House together is a yeoman’s task. I think that task is just as serious as getting Republicans and Democrats together,” said Representative Bill Pascrell, a Democrat on the Ways and Means Committee.
