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Democrats closer to deal on budget reconciliation package

Drug pricing agreement could be catalyst for House floor vote on sweeping package this week

Senate Majority Leader Charles E. Schumer, flanked from left by Sens. Raphael Warnock, D-Ga., Patrick J. Leahy, D-Vt., and Amy Klobuchar, D-Minn., speaks during a news conference in the Capitol on Tuesday, Nov. 2, 2021.
Senate Majority Leader Charles E. Schumer, flanked from left by Sens. Raphael Warnock, D-Ga., Patrick J. Leahy, D-Vt., and Amy Klobuchar, D-Minn., speaks during a news conference in the Capitol on Tuesday, Nov. 2, 2021. (Bill Clark/CQ Roll Call)

Democrats could release text of their sweeping social spending and climate change mitigation package as soon as Tuesday night after cutting intraparty deals on prescription drug pricing and potentially on state and local tax deductions, among other sticking points.

“That’s the hope,” Speaker Nancy Pelosi told reporters Tuesday afternoon, after Democratic leaders announced an agreement that would let Medicare negotiate lower pharmaceutical prices, which had been one of the chief roadblocks to a deal.

Pelosi stopped short of pledging a vote on the measure this week, but with revised text in hand the Rules Committee could reconvene as soon as Wednesday to prep the sweeping package for the floor. Democrats earlier said they were still hoping to pass the bill this week along with a bipartisan infrastructure bill that would provide $550 billion in new money for public works projects.

The infrastructure bill would then go to President Joe Biden’s desk while the Senate takes up the reconciliation bill.

Senate Majority Leader Charles E. Schumer told reporters if the House passes the reconciliation measure this week, the Senate could take it up the week of Nov. 15 after a week spent doing a “scrub” of the text. That’s needed to ensure the measure complies with the fiscal 2022 budget resolution instructions and doesn’t have any “Byrd rule” violations, or things in it that trigger budget points of order that opponents could strip on the floor.

“That takes about a week because it’s a 2,000-page bill,” Schumer said.

The agreement on drug pricing comes after a broader House-drafted negotiation provision had been dropped from the package earlier after an offensive from the pharmaceutical industry, which claimed it would stifle drug innovation and research. 

Schumer told reporters after a caucus lunch Tuesday that “agreement has been reached” on drug pricing provisions that will “directly reduce out-of-pocket drug spending for millions of patients every time they visit the pharmacy or doctor.” 

Schumer specifically said Sen. Kyrsten Sinema, D-Ariz., had signed off on the compromise. In a statement, Sinema spokesman John LaBombard said she “welcomes a new agreement on a historic, transformative Medicare drug negotiation plan,” and that two House holdouts — Reps. Scott Peters, D-Calif., and Kurt Schrader, D-Ore. — also backed the deal.

Senate Finance Chair Ron Wyden, D-Ore., said the drug pricing deal would help reduce the cost of the most expensive drugs on the market. “We’re talking about cancer and arthritis. And we’re going to have a win on insulin and that will be for both seniors and others,” he said.

Earlier, two other past holdouts on the sweeping price negotiation language drafted by House leaders indicated they were prepared to back the new compromise. 

“I think we’re heading to a good place on prescription drugs,” said Delaware’s Thomas R. Carper.

Similarly, New Jersey’s Bob Menendez appeared ready to sign off.

“This is what I said to all of you in the very beginning, which is I want to ensure that consumers at the counter get the greatest relief possible, not just that the government saves money,” he said. “I think there are provisions in the latest version that will do that,” though he didn’t specify what those are or how they improved upon the original House-drafted price negotiation provisions.

Lawmakers were also trying to forge 11th-hour compromises on immigration policy and the details of implementing child care subsidies, which many Democrats want to speed up. And Democrats from high-tax states were nearing agreement with party leaders on a potential five-year suspension of the $10,000 cap on state and local tax deductions, though that break would be paid for by extending the current law cap five years beyond its 2026 expiration.

Senate Budget Chairman Bernie Sanders, a Vermont independent and leading progressive, said earlier he was still working to nail down the drug pricing agreement and to expand Medicare to include dental and vision benefits. But he also seemed ready to move the process forward, even if it meant some of his favored provisions don’t make it in the end.

“This process cannot go on week after week, month after month,” Sanders said. “It’s finally got to come to an end, and I will do everything I can procedurally to get a vote on the floor of the Senate as soon as possible, hopefully next week.”

But the fate of immigration provisions intended to create a pathway to citizenship for millions remained in doubt because the language is subject to a ruling from the Senate parliamentarian on whether it can be included in a reconciliation bill. The Senate’s “Byrd rule” limits what can be considered to items that have more than a “merely incidental” impact on the federal budget.

Progressives don’t want to wait on the parliamentarian to vote in the House, but some centrists are objecting to voting on contentious provisions that may get dropped in the Senate.

“Anything short of what can clear the parliamentarian in the Senate process is promising false hope to immigrants, and it’s cruel and unusual,” said Rep. Stephanie Murphy, D-Fla., whose family escaped from postwar Vietnam when she was six months old. “And as an immigrant myself, I believe in actually getting legislation across the finish line to help this community.”

CBO score

The effort to move the package forward in the House came a day after a key Senate holdout, West Virginia Democrat Joe Manchin III, said he would need more time to assess the bill’s impact. He also expressed concern that the measure would increase deficits and exacerbate inflation.

The Biden administration has insisted the package would be fully paid for, with almost $2 trillion in new revenue over the coming decade to fund $1.75 trillion worth of measures to expand the social safety net and combat climate change, though they also included a placeholder $100 billion for immigration-related costs.

On Tuesday, Manchin wouldn’t say much other than he’s not going to negotiate in public. He didn’t appear concerned about the House plowing ahead with a vote potentially as early as this week.

“The House can do what it wants,” Manchin said.

But the House appears likely to proceed with a vote before the Congressional Budget Office officially estimates its price tag, or “score.” And the CBO is unlikely to count what the White House says is the biggest single source of new revenue: $400 billion from increased IRS tax enforcement.

While a CBO score will be required before a vote in the Senate, the lack of one could unnerve House Democratic moderates on a key vote that is sure to be close. House leaders can’t afford to lose more than three Democratic votes with unified Republican opposition to the measure.

“Given so many changes and in such a short period of time, I think a lot of us would feel a lot more comfortable with a CBO score,” said Rep. Jim Costa, D-Calif.

But House Ways and Means Chairman Richard E. Neal, D-Mass., said the lack of a score should not hold up a vote. “Seldom in my career have we vetted an issue more substantially than we have this one,” he said Monday night. “So I think the score is ancillary.”

Most House Democrats appeared unfazed by Manchin’s public protest, saying they were ready to move ahead and trusted Biden’s promise that the bill would win a Senate majority.

“He said what he said, but we’ve been saying for three months that what we need is the text and a vote on both bills at the same time,” said Progressive Caucus Chair Pramila Jayapal, D-Wash., referring to the reconciliation package and the infrastructure bill. “That is what we’re getting. That is why we are now comfortable with moving forward.”

Democrats want to get the reconciliation bill signed by Thanksgiving at the latest. Sen. Tim Kaine, D-Va., said that was doable even with Manchin’s objections, though others weren’t as sure.

“I think we need to take as much time as necessary so people understand what they’re voting for,” Sen. Jon Tester, D-Mont., said. “I don’t know if that’ll take a week or six weeks, but I think that people need to be comfortable with what they’re voting on.”

Added Tester, “I don’t think it’s gonna pass unless it’s fully paid for.”

Methane fee

A proposed fee on methane emissions has also been a concern for Manchin, who represents a leading state for natural gas and coal production.

Carper, who leads the Senate Environment and Public Works Committee, said he was working with Manchin as well as House Democrats from Texas on their concerns with the proposal and that his staff was waiting for feedback from affected stakeholders.

The climate section is still being reviewed to ensure the provisions are “airtight” and don’t create unintended “loopholes,” Rep. Ro Khanna, D-Calif., said.

Chris Cioffi, Paul M. Krawzak, Niels Lesniewski, Caitlin Reilly, Jennifer Shutt and Caroline Simon contributed to this report.

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