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Wednesday, December 8, 2021

Pelosi is optimistic about Biden deal, but Manchin cuts taxes on billionaires


WASHINGTON (AP) – House Speaker Nancy Pelosi told colleagues Wednesday that Democrats are in “pretty good shape” over President Joe Biden’s vast domestic plan, but new concerns have emerged as a key Democrat instigated a new billionaire tax to help pay $ 1.75 trillion. package.

Biden and the Democrats are rushing to take stock of the talks ahead of the president’s departure this week for overseas global summits, in part to show foreign leaders that the US is pursuing its goals under his still new administration.

The president can visit Capitol Hill at the end of the day, and the administration is assessing the situation hour by hour, White House spokeswoman Jen Psaki said.

“We are now on track to move forward once we reach an agreement,” Psaki said at the White House.

Upbeat comments from Democratic leaders about Biden’s big proposal for social services and climate change programs raised new hopes for Wednesday’s announcement of the deal. But the talks turned into further setbacks – the just-proposed tax on billionaires could be lifted after Democratic Senator Joe Manchin of West Virginia objected, according to a senior party aide who asked to remain anonymous to discuss private negotiations. Manchin called this an unfair targeting of the rich.

“People in the stratosphere, instead of trying to punish, we should be happy that this country is capable of producing wealth,” Manchin told reporters.

Manchin said he prefers a fixed “patriotic tax” of at least 15% to keep the richest Americans out of their taxes. “There is a patriotic duty to pay something to this great country,” he said.

However, he said: “We need to move forward – the president has made it very clear that he wants to move forward and we owe the president a debt.”

White House officials met at the Capitol with Manchin and another key opposition figure, Democratic Senator Kirsten Cinema of Arizona.

“Progress,” said Cinema, rushing into the elevator.

The acceleration in the pace of negotiations came as Biden pushed for a deal ahead of global summits. There is also a Sunday deadline to approve a smaller, bipartisan road and bridge infrastructure bill, otherwise there is a risk that funds for regular transportation programs will expire. But that $ 1 trillion bill has been delayed by progressive lawmakers who refuse to lend their support without a bigger deal with Biden.

Pelosi, in a letter to colleagues, called for a committee meeting on Thursday to consider the packages, a typical step required before a sold-out vote. Her previous remarks were conveyed during a private meeting of House Democrats.

Democrats hoped that a tax on billionaires would help resolve the revenue side of the equation after Cinema rejected an earlier party idea to end Trump-era tax breaks for corporations and the rich.

The new billionaire proposal taxes those with more than $ 1 billion in assets or more than $ 100 million in income for three consecutive years.

Starting in tax year 2022, it will affect the richest Americans, under 800, and require them to pay taxes on gains on stocks and other tradable assets rather than waiting for assets to be sold.

A similar billionaire tax will apply to non-tradable assets, including real estate, but it will be deferred and the tax will not be charged until the asset is sold, although interest will have to be paid.

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Overall, the billionaire tax rate will be in line with the capital gains rate, which is now 23.8%. Democrats said he could generate $ 200 billion in revenue that will help fund Biden’s package over 10 years.

“No senator wants to stand up and say, ‘Gee, I think it’s okay for billionaires to pay little or no taxes,” said Oregon Democratic Senator Ron Weiden, chairman of the Senate Finance Committee. new effort.

Taken together, the new billionaire proposal, coupled with a new minimum corporate tax of 15%, is intended to satisfy Biden’s desire for wealthy big business to pay their “fair share.” They also live up to his promise that no new taxes will affect those earning less than $ 400,000 a year or $ 450,000 for couples. Biden wants his package to be paid in full without accumulating debt.

“I’ve been talking about this for years,” said Sen. Elizabeth Warren, Massachusetts, who participated in the presidential campaign on wealth tax and supports Wyden’s approach. “I even made the billionaires cry about it.”

While the new tax proposals seemed acceptable to Manchin and could attract the attention of Cinema, whose support is needed in the 50-50 Senate, where Biden has no extra votes, Republicans ridiculed the billionaire tax as “reckless”, and some spoke out … suggested that this would run into a legal problem.

The idea of ​​a billionaire tax has also been criticized by other Democrats as cumbersome or worse.

Democratic MP Richard Neal of Massachusetts, chairman of the Ways and Means Committee, said he told Wyden that the billionaire tax could be more difficult to implement than the path his group took by simply raising the stakes for corporations and the rich. , repealing the 2017 law. tax cuts.

According to the House of Representatives bill approved by the Neal Commission, the maximum individual income tax rate will rise from 37% to 39.6% for those earning more than $ 400,000 a year or $ 450,000 for couples. The corporate rate will increase from 21% to 26.5%. The bill also proposes a 3% income tax for the richest Americans with adjusted incomes in excess of $ 5 million a year.

Together, Manchin and Cinema’s objections struck one or two blows, disrupting Biden’s overall plan and halving what was a $ 3.5 trillion package.

It has also led to difficult reductions, if not abolition, of political priorities – from paid family leave to childcare and benefits for the elderly in dentistry, ophthalmology and hearing aids.

The once hefty climate change strategies are also losing their effectiveness, focusing from punitive pollutants objected to by the coal state of Manchin to rewarding clean energy instead.

Mood is running out as fellow Democrats tire of repeated objections from Manchin and Sinema.

Senator Bernie Sanders, The Vermont Independent: “48 out of 50 people support a program that works for the American people.”


Associated Press authors Farnush Amiri, Darlene Superville, and Colleen Long contributed to this report.

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