Barriers to House Democrats accepting a Senate-drafted climate, tax and health care package appear to be melting away, but they’re still processing a shrunken bill that lacks their top priorities.
After a year of fragile negotiations, Democrats have Sen. Joe Manchin III’s support for a budget reconciliation bill that includes major pieces of the party’s agenda like clean energy incentives, provisions to lower drug costs and IRS funding. But it lacks relief from a state and local tax deduction limit and the Medicaid coverage gap, as well as immigration provisions and other measures House members demanded be part of the package.
The House is planning to return the second week of August to take up the package, assuming the Senate has sent it over by then, Speaker Nancy Pelosi said at her weekly news conference Friday. The California Democrat was confident her caucus will rally behind the measure, even though it does not include all the priorities they sought.
“It is, shall we say, not everything that I want — I mean not even close, not even half — but nonetheless what is in there is very good, historic,” Pelosi said. “When they send it to us, we’re going to pass it.”
Most House Democrats who lost out on hallmark issues are ready to take what they can get from the 50-50 Senate ahead of November’s midterm elections, but some are withholding support in hopes of securing more.
Democrats can’t lose more than four votes in the House with all Republicans sure to vote against the package. But their margin likely drops to three after the special election Aug. 9 in Minnesota to replace former Republican Rep. Jim Hagedorn who died earlier this year. Hagedorn's seat is expected to remain in GOP hands.
That gives Pelosi an impetus to call members back as soon as that week before Hagedorn's expected successor, former GOP Department of Agriculture official Brad Finstad, can be sworn in.
Sour on 'SALT'
The deal between Manchin, D-W.Va., and Senate Majority Leader Charles E. Schumer doesn’t include relief from the $10,000 limit on deducting state and local taxes. The “SALT cap” is a priority for Democrats from New Jersey, New York, California and a few others where taxes are high and the cap impacts higher-earning residents.
Schumer, a New York Democrat who personally pressed for SALT relief, pointed to Manchin’s opposition on Thursday, saying Democrats have to get a bill done. In his statement on the reconciliation deal, Manchin said the tax code “should not favor red state or blue state elites with loopholes like SALT.”
Some SALT proponents are falling in line.
“‘No SALT, no deal’ has always been about if they try to change the tax on the personal income tax code and so they’re not doing that,” said New York Rep. Tom Suozzi, who was part of a trio of House Democrats who took the hardest line on SALT.
The three had repeated there was no deal without SALT as long as the bill included taxes. Suozzi, who’s not seeking reelection, said Thursday he has no objections to the Senate’s SALT-less bill.
Rep. Bill Pascrell Jr., D-N.J., pointed out that he never drew a firm line on SALT and said Thursday that he’s leaning “yes” on the bill, but held off on committing because he still wanted to review the text.
Rep. Tom Malinowski, D-N.J., also avoided the “no SALT, no deal” demand but pushed for relief. He was a main architect of the version that made it into the House-passed reconciliation bill, which would lift the cap to $80,000 and extend it past its current 2025 expiration as an offset.
He said he’s still hoping to convince Manchin that doing nothing on SALT is bad for those who favor and oppose it alike, because it leaves the cap to expire completely in a few years. But he’s ready to take the deal.
“I mean, who can be against lowering prescription drug prices for seniors while making Amazon pay taxes?” Malinowski said, referencing a 15 percent domestic minimum tax on the largest corporations. “I want SALT for my constituents, but my constituents also want these other things.”
Immigration also caused issues in the negotiations last year, with a trio of Hispanic House Democrats — Reps. Lou Correa of California, Adriano Espaillat of New York and Jesús "Chuy" García of Illinois — threatening to vote against the reconciliation package if it did not provide a path to citizenship for millions of undocumented immigrants.
Democrats presented Senate Parliamentarian Elizabeth MacDonough three options for accomplishing that, all of which she rejected as not adhering to reconciliation rules that require provisions to have more than a "merely incidental" impact on spending or revenues.
The third option, narrower language to provide temporary work permits and deportation protections, was included in the House-passed bill that Correa, Espaillat and García supported.
Now, faced with a reconciliation package that lacks any immigration law changes, Correa said it’s causing “consternation.”
“I'll have to wait until I see the final language, but I've seen this movie a couple of times, so I think I know where it's going to end," he said.
If that ending excludes immigration provisions, Correa said, “I’m going to have some problems.”
Espaillat, however, said he is prepared to vote for the Manchin-Schumer deal.
“It's not exactly everything that I wanted, obviously,” he said. “But it's a step in the right direction and I think we must take this step.”
Espaillat said he’s pleased the administration has taken some executive actions and that President Joe Biden has committed to doing more.
Espaillat also cited separate legislative efforts, like a bill he introduced with Rep. Zoe Lofgren, D-Calif., and other Democrats to update the so-called immigration “registry” date — currently set at 1972 — to provide a path to legal status for certain undocumented immigrants who have lived in the U.S. for the past seven years. He said he expects the House to pass that measure this Congress and is hopeful for Senate action given it “is a traditionally bipartisan bill” and employers say they need more workers.
Medicaid, housing out
Democrats have complaints about other things that were left out of the package.
Pelosi cited her personal disappointment that it doesn’t include provisions to provide health coverage for low-income residents of states that did not expand Medicaid. A group of 50 Democrats sent a letter Thursday to Schumer requesting the Medicaid provisions be added.
“It is essential that relief be provided for our most economically disadvantaged neighbors who have been stuck in the coverage gap for over a decade,” the Democrats wrote.
Financial Services Chairwoman Maxine Waters said Thursday she wasn't committed to voting for the deal because it does not include funding to address the housing crisis.
Speaking at a press conference hosted by the National Low Income Housing Coalition, the California Democrat said it was “unconscionable” leadership would not address that or at least let proponents know in advance it was out so they could gather advocates to push harder before the deal was finalized.
Pelosi reminded reporters of the advice she always gives to her members, as she predicted frustrated Democrats will ultimately come around.
“You cannot judge something for what it doesn’t do but respect it for what it does,” she said. “And what this does is quite remarkable.”
Caitlin Reilly and Suzanne Monyak contributed to this report.