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Washington Watch: Here’s what’s in Democrats’ big social-spending bill, as alternatives to corporate-tax hike sought

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Negotiations continue among Democratic moderates and progressives over President Joe Biden’s “Build Back Better” plan, a sweeping proposal targeting “human infrastructure,” climate change and other party priorities.

Biden and other top Democrats had been aiming for a $3.5 trillion social-spending package that would move in tandem with a bipartisan infrastructure
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bill, but objections from intraparty moderates may result in the bill shrinking to around $2 trillion.

As Biden pushed his economic agenda in a Wednesday speech in his birthplace of Scranton, Pa., administration officials were reportedly seeking alternatives to pay for the massive spending plan. A proposed hike in the corporate tax could be jettisoned in favor of items including a tax on billionaires’ assets.

As the party aims to reach agreement by Oct. 31, below are key proposed categories for the spending.

Free community college: This item appears to be in serious jeopardy. Biden, whose wife Jill Biden is a community-college professor, campaigned on making two years of community college tuition-free, and the proposal is among the major parts of the Build Back Better Act. But the president has reportedly told progressive lawmakers that it will likely be cut from the final package. Education Secretary Miguel Cardona recently fretted that the idea could be dropped. “That would be a shame, because we’re so close to leveling the playing field for so many students,” Cardona said in Detroit in September, Politico reported.

Universal pre-K: On the earlier side of the education spectrum, Democrats are proposing universal pre-K for 3- and 4-year-olds. They would spend about $450 billion on universal pre-K and lowering the cost of childcare, according to the House Education and Labor Committee. As a result, most families would not pay more than 7% of their income on childcare, Democrats say.

Medicare expansion: The Democratic-run House Ways and Means Committee backs having the Build Back Better Act provide new vision and hearing services to Medicare recipients starting in 2022 and 2023, respectively, while dental benefits would kick in in 2028. Sen. Bernie Sanders, the Vermont independent who typically votes with Democrats, criticized the delay for dental benefits last month, but the progressive lawmaker and two-time contender for the Democratic presidential nomination, emphasized that the party is bound to encounter disagreements while trying to formulate its big social-spending package.

Let Medicare negotiate drug prices: Biden and other top Democrats have pushed for having the Build Back Better Act include provisions that would lead to Medicare negotiating the price it pays for prescription drugs
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but it’s not clear that will happen. The House Energy and Commerce Committee rejected that proposal last month following opposition from three moderate Democratic lawmakers. “These negotiations are going to take time, and it remains to be seen if there is any version of ‘direct negotiation’ that can get 50 votes in the Senate,” said Capital Alpha Partners analysts in a recent note.  

Expand on Obamacare: Democrats want to make permanent an increase in Affordable Care Act subsidies that were passed early this year as part of the American Rescue Plan, the COVID relief act. House leaders are reportedly leaning toward prioritizing the subsidies, as well as closing the Medicaid coverage gap in states where the program wasn’t expanded. Yet focusing on those two provisions at the expense of expanding Medicare would risk alienating Sanders, making healthcare one of the thorniest negotiations among Democrats.

Paid family and medical leave: All workers in the U.S. would get up to 12 weeks of paid family and medical leave. In touting the plan, Democrats have emphasized that just 23% of Americans have access to paid family leave, with lower-wage workers the least likely to have access. Paid leave could increase families’ incomes by more than $28 billion, they say.

Clean-electricity performance program: This program — which would provide grants to utilities that increase their use of clean electricity — appears all but dead. Sen. Joe Manchin, the conservative West Virginia Democrat, is opposed to the $150 billion provision, and other Democrats are crafting separate climate measures — such as making buildings more energy-efficient — with the expectation this program will be dropped, the Wall Street Journal reported.

Also read: ‘U.S. will look ridiculous if they show up with nothing’: Biden could be weakened at Glasgow as clean energy likely cut from budget bill

Extended child tax credit: Expanded child-tax-credit payouts began in July, stemming from March’s $1.9 trillion stimulus law, but they’re due to fade away next year. The House Ways and Means Committee supports extending the new CTC payouts (up to $300 a month per child) through 2025, but some moderate Democrats want stricter income limits for recipients. Biden has told progressives that it may be extended for just one year, Politico reports.

EV tax credits: The House Ways and Means Committee has proposed tax credits for electrical vehicles worth up to $12,500. However, automobile makers with nonunionized workforces such as Tesla
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have spoken out against a provision that would reduce the credits for their vehicles by $4,500, as only union-made vehicles assembled in the U.S. would qualify.

Don’t miss: Automobile industry’s future ‘is electric, and there’s no turning back,’ Biden says, as he touts EV goal; Tesla not invited to EV event because it focused on 3 biggest employers of UAW members

Paying for it: Democrats had been aiming to get wealthy Americans and companies to pay higher taxes, which would fund the social-spending package. The White House is now looking for alternatives as it faces opposition to corporate tax hikes, according to multiple reports. Biden’s advisers are floating plans including a tax on billionaires’ assets, a minimum tax on corporations and a tax on companies issuing stock buybacks, according to a Washington Post report. Sen. Kyrsten Sinema, a now-pivotal Arizona Democrat, reportedly opposes tax increases for businesses or the wealthy, a stance that has forced her party to rethink the means of paying for its plans.

Now read: White House mulls Plan B, with new taxes for billionaires, stock buybacks: report

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