House Democrats were racing toward a vote on their sweeping safety net expansion and clean energy bill as soon as Thursday night, as party leaders tried to tamp down concerns that the package wasn’t fully paid for.
The Joint Committee on Taxation weighed in Thursday morning with a cost estimate of tax provisions in the revised 2,135-page version released the day before. Revenue offsets total $1.5 trillion over a decade, while party leaders and White House officials touted additional savings from prescription drug provisions and IRS enforcement that haven’t yet been “scored.”
“We’ve met every obligation we’ve had,” House Ways and Means Chairman Richard E. Neal, D-Mass., said Thursday morning. “The bill is paid for.”
According to the Treasury Department, total offsets in the measure could reach nearly $2.2 trillion, including around $250 billion from prescription drug savings and another $400 billion from stepped-up IRS efforts to collect taxes. The Congressional Budget Office hasn’t released estimates of either provision, however, and in the past their prediction of IRS enforcement savings has been half that of Treasury’s.
Most House Democrats left their caucus’s weekly whip meeting Thursday saying they weren’t expecting to get a CBO score before the vote but the JCT score proving the measure is offset was enough information. Whether that’s enough to soothe the concerns of centrists who’ve demanded a full CBO score and 72 hours to review the text remained to be seen, however.
One of those moderates, Kurt Schrader of Oregon, said he wasn’t ready to back the bill on Thursday and others weren’t either. “They don’t have nearly enough votes yet,” he said.
Schrader added that lawmakers were still going through the bill and discovering new items, such as tax breaks for local news outlets, union members, recording studios and others. “I’m not sure what that has to do with what we’re trying to do,” he said.
Speaking at a news conference after the meeting, Speaker Nancy Pelosi declined to specify vote timing for the huge tax and spending bill. “I’ll let you know as soon as I wish to,” the California Democrat said. “Stay tuned.”
But lawmakers leaving the meeting said Pelosi communicated a goal of voting Thursday night, followed by final passage Friday of the separate, Senate-passed infrastructure bill that would tack on another $550 billion in new spending.
“That’s what I’ve heard, and that’s personally the sequencing that I think is going to work,” said Rep. Mark Takano, D-Calif. “I think we’ve got to get this bill over to the Senate. And senators are going to do what they’re going to do, and the parliamentarian is going to do what they do. But I ultimately think it’s really important to get this potato out of our lap and pass it on to the other body. And I think we can do it.”
Rep. Suzan DelBene, D-Wash., confirmed that the goal is to vote on reconciliation later Thursday and pass both bills this week, although she added that “nothing’s firm right now.”
Several members said there’s no talk of a potential weekend session. A delegation of lawmakers is scheduled to head to the United Nations Climate Change Conference in Glasgow, Scotland, after the House adjourns Friday.
Progressives for weeks held up a vote on the infrastructure bill in an attempt to get centrists to compromise on the larger spending bill. Then some said last week that they’d back both bills as long as they passed the House in tandem.
Now it’s party centrists who have qualms, however, given that the Senate is likely to make changes to whatever the House passes. Originally, the plan was to “pre-conference” the package so that House members wouldn’t have to vote for contentious language that ultimately got stripped out by senators.
“There’s a lot of good things” in the underlying bill, Rep. Henry Cuellar said. “So I’m looking at what are the bad things, because I don’t want to see” a scenario like the 2009 “cap and trade” energy and climate bill that House lawmakers took a tough vote on, only to see it die in the Senate. A number of House Democrats who voted for that measure lost their seats in the 2010 midterms.
Cuellar, D-Texas, cited provisions intended to create a pathway to citizenship for undocumented immigrants as well as a new fee on oil and gas companies for methane emissions leakage as things that might have to come out in the Senate.
“I mean, I’d like to have the 50 senators. That was the agreement we made that was publicly said by everybody, you know, that was the agreement. I wish we would stick to what we said,” Cuellar said after the whip meeting.
Cuellar then went on CNN later saying he would “vote to move the bill forward” despite his discomfort. But it was unclear if other moderates who’ve had similar concerns had been convinced to vote for the measure. Lou Correa, D-Calif., a Blue Dog Coalition member, said he “probably” wouldn’t vote for the package, however, because of concerns over the immigration language.
Some of those same centrists also have been pushing for a vote on the bipartisan infrastructure bill since September, after the Senate passed it with 69 votes in August. Many Democrats have blamed lack of movement on that measure, as well as the broader reconciliation bill, as one reason for their party’s poor showing in Virginia and New Jersey gubernatorial races Tuesday.
“I think we know that we don’t help anybody until we get the bills done. So we’re very focused on getting things accomplished [and] across the finish line,” DelBene said.
House Democratic Caucus Chair Hakeem Jeffries downplayed concerns about passing a bill in the House that may not have the votes to pass the Senate in its current form.
“The most important thing right now is we have the president’s imprimatur on whatever we move in the House and his commitment to secure 50 votes in the Senate,” said Jeffries, D-N.Y.
‘SALT’ in focus
One of the areas that remains in flux is how to provide relief from a $10,000 cap on state and local tax deductions that hits hardest in high-tax blue states like New York, New Jersey and California.
At the moment, House Democrats are moving ahead with a compromise plan from Reps. Tom Malinowski, D-N.J., and Katie Porter, D-Calif., that would lift the cap to $72,500 but then extend it through 2031, beyond the current smaller cap’s 2025 expiration date. The JCT said that provision would actually raise revenue by a token $2 billion over the decade, despite cutting taxes by some $222 billion in the first five years.
Sanders and Menendez say their plan would prevent tax breaks from going to the richest households. “We’re working on details to come up with a sensible approach which protects the middle class but does not give massive tax breaks to the wealthy, and I think we will reach that,” Sanders told reporters Thursday.
Malinowski said he planned to meet with Sanders to discuss the issue on Thursday.
“I’m a little concerned about some of the details and lack thereof that I’ve heard from these other proposals, but I’m open to talking to everybody. I think we have something that is totally vetted, very simple, 100 percent scored,” Malinowski said. “It’s a proposal that’s gonna pass the Senate, so I think the burden is really on others to show that they have a better approach.”
He said a $400,000 income limit to qualify for the full deduction, for instance, “would exclude a significant number of people in my district” as well as those in neighboring districts represented by Democrats Josh Gottheimer and Mikie Sherrill. “And I don’t mean super rich people. I mean, like if you’re a doctor married to a teacher, you’re out,” he said.
It wasn’t immediately clear if Gottheimer, Sherrill or New York’s Tom Suozzi, who’s been pushing for full repeal, were on board with the House plan. But Democratic leaders were hopeful they could gain consensus quickly.
“We hope to hear what they have to say,” Neal said, referring to Menendez and Sanders. “But we want that put to bed.”
The new revenue estimate shows House Democrats shaved the size of their proposed tax increases on wealthy households and corporations down by over $500 billion from the version that Ways and Means approved in September.
Taxes on corporations are estimated at roughly $814 billion, down about $150 billion from the September package, while high-income individuals would face $640 billion in tax increases, down from $1 trillion in the earlier version. Other provisions were scaled back considerably as well; a tax increase on tobacco and vaping products dropped from about $97 billion to less than $9 billion.
At the same time, the cost of tax breaks for families, infrastructure and housing, child care, green energy and more came down from roughly $1.3 trillion to about $560 billion. Despite that reduction, the overall clean energy incentive package grew in size by about $50 billion as House tax writers compromised with Senate Democrats prior to Biden’s trip to Glasgow for the climate summit.
Still, it wasn’t clear all of those provisions would survive the Senate intact when that chamber takes up the package later this month. “I suspect that they’re probably going to make some changes and send it back,” said Rep. Mike Thompson, D-Calif., head of the Ways and Means Select Revenue Measures Subcommittee.
David Lerman, Joseph Morton, Caitlin Reilly, Caroline Simon and Jessica Wehrman contributed to this report.