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Optimism waning in Senate about budget reconciliation vote this month

Procedural reviews, Manchin's vote are lingering obstacles to swift passage

Sen. Debbie Stabenow, D-Mich., speaks during the Senate Democrats' press conference in the Capitol on Oct. 5, 2021.
Sen. Debbie Stabenow, D-Mich., speaks during the Senate Democrats' press conference in the Capitol on Oct. 5, 2021. (Bill Clark/CQ Roll Call)

Senate Democrats on Tuesday softened their optimism that their party’s sweeping safety net and climate spending and tax package will pass before Christmas, citing uncertainty about whether Sen. Joe Manchin III, D-W.Va., is ready to support it and procedural steps that are far from complete. 

“It’s a tough timeline,” Michigan Sen. Debbie Stabenow, a member of Democratic leadership, said. “So we’re still pushing forward. We have a lot of agreement. But, you know, if this is not done in the next two weeks, we’ll come back in January and get it done.”

The House passed a $2.2 trillion version of the bill last month. Senate Democrats have released updated text for nine of their 12 committees that have jurisdiction over the package. The Energy and Natural Resources Committee that Manchin chairs is among the three committees that have not released text, along with Environment and Public Works and Judiciary. 

Democrats and Republicans have held separate meetings with the Senate parliamentarian to discuss whether provisions are in compliance with the Byrd rule, which governs the types of policy changes that can be made through reconciliation.

But formal bipartisan arguments to the parliamentarian, known as the “Byrd bath,” have yet to begin, except for immigration language. Senators have yet to receive the parliamentarian’s decision on those provisions providing temporary work permits and deportation protections for undocumented immigrants, despite having presented their arguments over a week ago.  

Sen. Bob Casey, D-Pa., said Democrats are hoping to start the floor process for the bill on Monday if they’re far enough in the Byrd bath process to begin debate. 

“I don’t think there’s a precise time when that will be concluded,” he said. 

‘To get it in play’

Senate Majority Leader Charles E. Schumer has repeatedly said his goal to get the package through the Senate before Christmas. But when questioned about the feasibility of that timeline Tuesday he declined to provide a firm commitment.

Instead the New York Democrat described committees’ ongoing work with the parliamentarian and “good progress” President Joe Biden is making in negotiations with Manchin.

“We’re doing all of the things we have to do to get it in play,” Schumer told reporters after Democrats’ weekly caucus lunch. 

Manchin said Tuesday afternoon he spoke to Biden “briefly” that day, following up on their phone conversation from Monday. Their talks came after Manchin has repeatedly called for a pause in considering the reconciliation package given high inflation and other economic “unknowns.”

The West Virginia Democrat also raised concerns about long-term costs of the reconciliation package after the Congressional Budget Office estimated that if the temporary provisions in the package were made permanent, it would add $3 trillion to the deficit. 

“I want people to understand where I am, and I think that’s where we’re getting more of an understanding,” Manchin told reporters Tuesday, declining to provide more details.  

Senate Minority Whip John Thune, R-S.D., said he and other Republicans have had conversations with Manchin in hopes of convincing him to oppose the bill.

“I think this argument that Manchin has made is a valid one, and that is … let’s get through the first quarter this next year, take a look at the economy see what’s happening with inflation before we move forward with this,” Thune said. “And I wish he would just say that emphatically because he could end this you know in terms of them trying to jam this through before the holiday.”

‘Put up or shut up’

Senate Democrats have different views about whether Schumer should call a vote on the motion to proceed to the bill if Manchin continues to waffle. 

Majority Whip Richard J. Durbin thinks scheduling the motion to proceed on the bill will force Manchin to “put up or shut up.” 

“As soon as it gets anything near a green light from the parliamentarian, I think we should move quickly,” the Illinois Democrat said.

Stabenow disagrees. “I think we should move when we have agreement,” she said. 

The Democratic leadership held a call Tuesday morning where they discussed details of how to get the bill done before Dec. 25, Sen. Christopher S. Murphy said. 

Senators’ desire to go home for Christmas is one of the “few forcing mechanisms” leadership has to wrap up negotiations, but if Democrats don’t meet that deadline they can still get the bill done next year, the Connecticut Democrat said. The Senate is scheduled to begin its 2022 session on Jan. 3, according to a calendar for the year Democrats released Tuesday.  

Murphy declined to say whether Schumer wanted to bring the reconciliation package to the floor Monday, but he noted Democrats can begin debate on the bill while the Byrd bath process is ongoing. 

“The Byrd bath process is not going to be what stops this from happening before [Christmas],” he said. “The problem is not the Byrd bath. The problem is we need 50 [votes]. And we’re getting closer, but that’s going to be the hurdle we need to cross.”

Methane compromise 

Schumer hosted a meeting with Democratic senators Tuesday to discuss climate provisions, including changes that are being made to provisions in the House bill intended to cut down on methane leakage from oil and gas facilities. Manchin, who has argued lawmakers should provide incentives, not penalties for companies to reduce emissions, said he had input on the changes but he’s not seen the final text. 

Environment and Public Works Chairman Thomas R. Carper, D-Del., said senators have negotiated “a very thoughtful compromise” addressing concerns that the methane fee in the House bill punished producers large and small with no phase-in or help for small producers to address their emissions. 

The version that passed the House provides $775 million to help oil and gas producers comply with methane reduction targets and charges a fee for excess emissions, which is phased in from $900 to $1,500 per ton over several years. Carper declined to provide details on what further changes senators were making but said they got good input from producers, the environmental community and states.

“Most of the heavy lifting’s been done and I think we have a good compromise,” he said. “My hope and expectation is we’ll vote on it as part of a bigger package and that it will be accepted.” 

‘SALT’ solution elusive

A compromise on how to provide relief from the $10,000 cap on the state and local tax deduction is proving more elusive.

The Senate Finance Committee left a placeholder for that portion of the bill when the panel released its portion of text on Saturday, acknowledging that senators will likely change the House-passed provision that would’ve lifted the cap to $80,000 and extended it past 2025 to cover the cost of immediate relief.

Schumer, whose home state of New York would benefit from allowing more deductions, has held meetings on the issue in recent weeks, including one last week. 

[Democrats’ ‘SALT’ headache hangs over budget reconciliation bill]

Two of the leading SALT negotiators, New Jersey’s Bob Menendez and Vermont’s Bernie Sanders, remain at an impasse but said Tuesday they’re still negotiating. 

Sanders, who’s been critical of the House plan for benefiting the wealthy, has pushed for leaving in place the $10,000 cap but with an exemption for anyone making less than $400,000 per year. He’s said that could raise hundreds of billions of dollars to fund an expansion of Medicare to include vision and dental benefits that are not currently in the package.

Menendez has said he won’t agree to a revenue-raising SALT plan and favors exemptions for individuals making up to $550,000 and married couples making close to but not above $1 million.

Sanders said he doesn’t want the exemption to go above $400,000, while Menendez has said that’s too low for him. While Democrats are negotiating around the threshold, they’re not currently analyzing entirely new options for SALT, according to a source familiar with the negotiations.

A range of senators with concerns about lifting the SALT cap have waded into discussions in recent weeks, after independent studies showed the benefit of the House-passed plan would lead to tax cuts for some of the wealthiest Americans including some millionaires.

Sen. Elizabeth Warren, D-Mass., has floated a tax on billionaires’ unsold assets as a trade-off for SALT, though she declined to say whether she urged that option in meetings with colleagues.

The billionaires tax, which Senate Finance Chair Ron Wyden proposed, would raise $557.2 billion over the next decade, according to a Joint Committee on Taxation analysis released by his office. But it has run into criticism from fellow Democrats including Manchin. 

“SALT is about a tax cut,” Warren said. “And the billionaires income tax — it is about requiring those at the top to pay. Right now, many billionaires are paying little or nothing in taxes, but hardworking people across this country have to foot the bill for running the country.”

Another tax challenge Democrats have yet to resolve is Manchin’s concerns about the long-term cost of the expanded child tax credit that provides monthly checks to families worth up to $300 per child. The House included a one-year extension of the expanded credit at a cost of $185 billion. The JCT estimated that making the provision permanent would cost $1.6 trillion. 

“He is not at this moment a fan of the child tax credit,” Sen. Michael Bennet said on a press call Tuesday.

The Colorado Democrat said he’s had numerous conversations with Manchin and is hoping he will allow the one-year extension to provide more data on the effectiveness of the credit.

“That’s part of the fight to make it permanent,” Bennet said.

Laura Weiss, Joseph Morton, Jennifer Shutt, Paul M. Krawzak, David Lerman and Mary Ellen McIntire contributed to this report. 

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