The Biden administration’s plans for a sweeping ‘build back better’ package funded by tax cuts on the wealthy was under threat Thursday, this time by the reported objections by Sen. Kyrsten Sinema with programs to pay for it.
Much media attention has focused on Sen. Joe Manchin (D-W.Va.), who has spoken disapprovingly of the size and timing of the passage, while making known he is opposed to a new climate program and other features of the $3.5 trillion plan.
More enigmatic has been Sinema, who has not made public her specific policy concerns with the bill, and who has become a subject of progressive ire for her negotiating posture.
Sinema has told lobbyists she is against any tax increase in the bill, the Wall Street Journal reported. Her stance applies to the plans increases in the top corporate tax rate, hiking the top income tax brackets, and boosting the tax rate on capital gains.
Sen. Kyrsten Sinema (D-AZ) arrives to the U.S. Capitol Building for a vote on October 19, 2021 in Washington, DC. She is opposed to programs that would tax the wealthy in President Joe Biden’s build back better plan
All three provisions would bring in substantial revenue over a decade, funding social programs in the package and allowing lawmakers to keep the overall cost score down.
Under the version reported by the House Ways & Means Committee, the top individual rate would rise to 39.6 per cent for individuals earning more than $400,000. The top corporate rate would rise to 26.5 per cent for corporate income over $5 million. The top capital gains rate would rise to 25 per cent for those earning more than $400,000.
All three provisions would target the wealthy and bring in revenue to fund Biden’s wish list, which includes universal pre-K, paid family leave, an extended child tax credit, and other provisions.
Sinema ‘has told lobbyists that she is opposed to any increase in those rates, according to a person familiar with her remarks,’ according to the Journal.
To enact the program, the Democrats must first reach unanimity in order to get it through the 50-50 Senate on a party-line vote.
Any senator has the ability to hold out for concessions. Her opposition to tax hikes raises the possibility that the White House could win over Manchin for a scaled-back program, only to find they are still shy what they need by a single vote.
The tax hikes are overwhelmingly supported within the overall Democratic caucus. The White House and congressional negotiators are already in the process of paring back programs to lower the price tag. But if they are denied the revenue, they would be forced to take negotiations in another direction.
Sinema’s hesitancy to tax the rich comes as President Biden continues to hammer corporations who paid no income taxes. He brought up the ultra-rich – a group he said he has no animosity toward – in remarks Wednesday in Scranton.
Sinema’s objections to tax hikes come as Sen. Joe Manchin has been negotiating on a scaled back plan
‘Just pay your fair share,’ President Joe Biden said in remarks in Scranton, Pa.
U.S. Sen. James Lankford (R-OK) (L) talks with U.S. Sen. Kyrsten Sinema (D-AZ) prior to a United States Senate Committee on Finance hearing. The Journal reports she has told lobbyists she is opposed to any increases in the top corporate rate, capital gains rates, and the top income tax rate for individuals
‘You know how much money the billionaires made last year, collectively?’ he said, citing an IRS calculation. One trillion – they increased their collective income. One trillion. Just pay your fair share’ he said.
‘It’s all paid for,’ he said of the bill.
Sen. Ben Cardin of Maryland told Politico Sinema may not be entirely dug in. ‘There is strong support in our caucus to raise the corporate rate. And it depends how you do it for high earners,’ he said. ‘I don’t think she’s opposed to some of the issues for high-income [taxpayers].’
The scrutiny of Sinema comes amid a report that Manchin is reportedly considering leaving the Democratic Party – something he flatly denied.
The West Virginia Democrat has told associates he has a plan to leave his party if his liberal colleagues cannot find a way to cut down the $3.5 trillion budget reconciliation plan to $1.75 trillion, according to left-leaning publication Mother Jones.
If Manchin follows through with the plan, he would switch from Democrat to Independent.
The senator reportedly has a two-part plan for his exit. First, he would send a letter to Sen. Majority Leader Chuck Schumer, D-NY, asking to be removed from leadership, as he currently serves as the vice chairman of the Senate Democrats’ policy and communications committee.
WARNING: STRONG LANGUAGE
Manchin says he would then wait to see if that showed Democrats how serious he was about leaving if negotiations don’t go his way. Then, after about a week, he would change his voter registration from Republican to Democrat.
‘It’s bulls***,’ Manchin said of the report he was considering leaving the party. ‘I have no control over rumors.’
‘I’ve been walking around here telling everybody around here the same thing,’ he said, after reporters pounced on the senator to confirm the report.
Asked if he was staying in the Democratic Party and caucus, he said: ‘I am where I am.’
Manchin, along with Sen. Kyrsten Sinema, above, is a key moderate Democrat in the Senate, and their votes remain the last bulwark against their party’s massive social spending bill
Asked about the report by DailyMail.com, White House press secretary Jen Psaki said: ‘I’m not going to speak on an anonymous report about a senator that can speak for himself.’
Still, the report serves as a warning to progressives to get serious about compromise.
On Tuesday, progressives who met with Biden said his bottom line number was $1.9T to $2.2T, though they wanted it to be much higher.
‘It’s not the number that we want. We have consistently tried to make it as high as possible,’ Jayapal, the head of the Congressional Progressive Caucus, told reporters outside the White House after their two hour meeting with the president.
Manchin, along with Sen. Kyrsten Sinema, is a key moderate Democrat in the Senate, and their votes remain the last bulwark against their party’s massive social spending bill.
It is not clear how Manchin’s potential party change would affect his voting, as the only two other Independents in the Senate, Bernie Sanders and Angus King, still caucus with Democrats.
Manchin met with President Biden on Tuesday, as well as Sanders, chair of the Senate Budget Committee, and Rep. Pramila Jayapal, chair of the House Progressive Caucus this week to try to find common ground.
Manchin has repeatedly pushed back against his fellow Democrats’ penchant for spending, warning that it could create an ‘entitlement mentality’ and sounding the alarm on rampant inflation.
Manchin even dared his party to elect more progressives if they wanted to pursue the massive spending.
‘All they need to do is we have to elect more – I guess for them to get theirs – elect more liberals but I’m not asking them to change,’ he told reporters late last month.
Manchin on Tuesday appeared to try to tamp down the intra-party war he’s been embroiled in, throwing his arm around Sanders, who is pushing for a much larger package, and asking the press to take a photo.
Sanders wrote in West Virginia’s largest newspaper, the Charleston Gazette-Mail, turning up the heat on Manchin back at home to vote for the social spending bill.
The friendly encounter came after a fiery exchange where Manchin lashed out at ‘out-of-stater’ Sanders after his op-ed ran over the weekend.
Sanders’s op-ed – titled Let’s stand together to protect working families – highlighted the wealth disparities in the U.S. and claimed the Build Back Better plan would help shrink the gap.
‘The $3.5 trillion Build Back Better bill, supported by President Biden and almost all Democrats in Congress, is an unprecedented effort to finally address the long-neglected crises facing working families and demand that the wealthiest people and largest corporations in the country start paying their fair share of taxes,’ Sanders wrote.
Manchin immediately issued a stinging rebuke, taking to social media to condemn Sanders and accuse the twice-failed presidential candidate of having no idea of what was best for West Virginians.
‘This isn’t the first time an out-of-stater has tried to tell West Virginians what is best for them despite having no relationship to our state,’ Manchin wrote.
‘Millions of jobs are open, supply chains are strained and unavoidable inflation taxes are draining workers’ hard-earned wages as the price of gasoline and groceries continues to climb,’ he added.
House Speaker Nancy Pelosi has set an Oct. 31 deadline for Congress to pass the infrastructure plan and his budget package of social programs.
Manchin has expressed doubt a deal can be reached at the end of the month.
‘There’s an awful lot that’s going on. I don’t know how that would happen,’ Manchin said Monday. ‘But once you get a meeting of the minds, if you ever come to an agreement, a meeting of the minds, you might be able to work something out.’
Sinema, meanwhile, has dealt with her own onslaught from Democrats daring her to leave the party. Progressives in her state have already mounted a primary campaign against her, launching the Primary Sinema PAC.
Sinema has been more tight-lipped about what she wants to see in a final budget reconciliation package, but reportedly opposes any tax increases on individuals and large corporations and has signaled she will not vote for the social spending plan until the House passes the $1.1T bipartisan infrastructure plan.