WASHINGTON – Standing in front of the Capitol on Thursday, between twin banners emblazoned with the words “care can’t wait,” Sen. Patty Murray assured a crowd of parents, home health aides and other caregivers Democrats are about to extend a historic helping hand to make their lives better.
“We are on the cusp of a once-in-a-generation investment in our kids and our families, the largest since the New Deal,” Murray said. “And we can do it all by just making the wealthiest individuals and the largest corporations pay their fair share.”
Her party, the Washington Democrat told the crowd, is fighting to make sure a wide range of social programs and measures to combat climate change are included in the legislative package it intends to pass using a once-a-year tool that will let Democrats get around a Republican filibuster.
Those priorities, Murray said, include “quality jobs,” affordable child care, a national paid leave policy, higher wages for care workers, a pathway to citizenship for immigrants and making new monthly child tax credit payments permanent.
The reality is more complicated.
After laying out a 10-year, $3.5 trillion bill to transform the U.S. social safety net and combat climate change, paid for by raising taxes on large corporations and the wealthiest Americans, Democrats are in the awkward position of selling the nation on legislation roughly half that size.
Democrats have, in effect, taken the country on a shopping spree only to find themselves counting change at the checkout counter, figuring out what they have to put back after their credit card was declined.
In this overwrought metaphor, lawmakers like Murray – along with the majority of her Democratic colleagues – are the fun aunts and uncles who have piled the shopping cart high with longtime progressive priorities. The stingy parents are Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, centrist Democrats who balked at the bill’s original price tag and forced Biden to tell lawmakers on Tuesday they should settle for a total between $1.75 trillion and $1.9 trillion.
Such an investment would still be historic, as Murray told the crowd, both in its total value and its scope. But with half the money they had hoped for, Democrats are scrambling to find ways to cut costs without dismantling the agenda they campaigned on.
“I myself mourn the fact that we don’t have the $3.5 (trillion), but even half of that is bigger than anything we’ve done before, and it would be a good first step,” House Speaker Nancy Pelosi, D-Calif., told the crowd before Murray spoke, repeating those last words slowly and deliberately: “A good first step.”
Child tax credit
Despite what Murray told the crowd, even the $3.5 trillion proposal would not make the revamped child tax credit permanent. That credit, part of the pandemic relief bill Democrats passed in March over universal GOP opposition, has sent families monthly payments of $250 to $300 per child since July.
Rep. Suzan DelBene, a Democrat whose district stretches from the Seattle suburbs to the Canadian border, has been one of the leading advocates of making those payments a long-term piece of the U.S. social safety net. But even DelBene has only pushed for the program to be extended through 2025, when the previous version of the child tax credit was already set to expire.
Now, after lengthy meetings with Biden on Tuesday, Democrats are reportedly considering extending the child tax credit for just one or two years to cut costs. But DelBene said Wednesday she was still pushing for an extension through 2025.
“I still think the right strategy is to focus on making sure we do things well, and a policy like the child tax credit – which is already a proven policy, having an impact on families right away – it’s so important for us to give long-term visibility,” she said. “So I’m going to keep pushing for that.”
The Internal Revenue Service estimates the new child tax credit reaches nearly 90% of American kids, and a Columbia University analysis found the first two months of payments lifted 3.5 million children out of poverty.
The tax credit is also one of the most costly components of the Democrats’ agenda, and Manchin has proposed cutting its cost by adding a work requirement and making it available only to families earning up to about $60,000 a year, Axios reported Sunday. That idea prompted pushback from DelBene and other proponents of the current credit, who warned that Manchin’s proposal would exclude many families, including those where grandparents care for children but don’t work.
An analysis by the Niskanen Center, a nonpartisan think tank, found that under Manchin’s proposed $60,000 income cap, 70% of children in Washington and 65% in Idaho would stop receiving the monthly payments.
DelBene, who met with Biden on Tuesday, said the next day the meeting was “incredibly productive” and she had strongly opposed restricting who is eligible for the child tax credit.
“I think the president also understands how important it is to make sure the benefits are available broadly for middle-class families and low-income families,” she said. “That continues to be a push, and we’ll continue to fight efforts to put further restrictions on the accessibility of the tax credit.”
Democrats have also sought to include major immigration reform in the bill, but the Senate parliamentarian – a nonpartisan legislative referee – ruled in September that such a provision couldn’t be passed through the process Democrats are using, known as budget reconciliation, which applies only to legislation that affects the federal budget.
Sen. Robert Menendez, D-N.J., told Axios on Wednesday his party was still trying to find a way to give legal status to the more than 10 million unauthorized immigrants living in the U.S. without a pathway to citizenship, but the parliamentarian could block that effort as well.
Short-term funding decried
The problem with short-term funding, critics point out, is that while the Democrats’ legislation aims to raise revenue over a 10-year period, funding programs for only a few years with the goal of extending them later effectively hides their true cost.
“These proposals don’t actually shrink the package; they just shorten it,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget – a nonpartisan watchdog group – said in a statement.
“Relying on these gimmicks and games doesn’t make sense. The most ardent supporters of these policies should reject a framework that puts their long-term fate in jeopardy to make room for lower priorities. And advocates of fiscal responsibility should reject it because it will create immense pressure for further borrowing.”
Other provisions of the Democrats’ legislation, dubbed the Build Back Better Act, also appear likely to receive only short-term funding, and some may be jettisoned altogether. A proposal to make community college tuition free for two years, for instance, may be replaced by a narrower scholarship program.
GOP vs. Dems
Republicans universally oppose the Democrats’ legislation, which would partially roll back some of the tax cuts for corporations and the wealthy they passed in 2017, using the same budget reconciliation process to bypass a Democratic veto. It remains unclear if Democrats being forced to curtail their spending aspirations will take any wind out of GOP sails, as Republicans have so far focused their criticism on the total cost of the Democratic proposals.
Democrats say they aim to agree on a framework for their legislation on Friday and could pass the bill by the end of October. With the GOP united in opposition, nearly all House Democrats and all 50 of their Senate counterparts – including Manchin and Sinema – would need to vote for the bill.
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