Centrist Sen. Joe Manchin says Democrats are unlikely to reach a deal Wednesday on Joe Biden’s nearly $2 trillion social spending bill — but both he and fellow party holdout Sen. Kyrsten Sinema have support a 15 percent minimum tax on corporate profits to help pay for it.
Biden had hoped for an agreement before he flies to Europe Thursday for a trip that will culminate in a climate summit in Glasgow, Scotland. He originally sought $3.5 trillion for social and environmental programs, but a bill is expected to be half that size if Democrats can reach an agreement.
He hosted Manchin (D-W.Va.) and fellow moderate Sinema (D-Ariz.), at the White House Tuesday night but the sitdown didn’t resolve disagreement on new taxes to pay for the plan.
“We’re not going to do everything today,” Manchin told reporters on Capitol Hill Wednesday.
Manchin said that a new proposed “billionaire’s tax” on unrealized capital gains was “convoluted” and “I don’t like it” — after Sinema torpedoed Biden’s original plan to raise the corporate tax rate and hike taxes on incomes over $400,000. The proposed tax would hit the gains of those with more than $1 billion in assets or incomes of more than $100 million a year.
Sinema, meanwhile, has embraced an alternate proposal for a 15 percent minimum tax on corporate profits, and Manchin supports that policy.
“There should be a 15 percent patriotic tax,” he said Wednesday. “We’ve all agreed on a 15 percent corporate tax.”
Democrats also say that an IRS crackdown on tax avoidance also would raise funds but Manchin and many others are troubled by that course of action as a broad invasion of privacy — with legislators first proposing banks provide data to the Internal Revenue Service on accounts with gross annual inflows and outflows of $600 and then upping the threshold to $10,000 after pushback from lawmakers, states and private banks.
Manchin said he told Biden the notion was “screwed up” when they met in Delaware Sunday and that the president agreed it should not be included in the final bill.
“I said, ‘Do you understand how messed up that is to think that Uncle Sam’s going to be watching,’” the West Virginia senator said on Tuesday of what he told Biden. “I told him…this cannot happen, this is screwed up.”
Staffers at the meeting were reportedly looking at each other back and forth, Manchin said, before revealing Biden said, “I think Joe’s right on that.”
Manchin on Wednesday said that there also wasn’t yet agreement on Medicare expansion or federal subsidies for paid parental and family leave.
“I am truly absolutely concerned about the deficit of our country at almost $29 trillion,” Manchin said. “In good conscience, I have a hard time increasing basically benefits… when you can’t even take care of what you have.”
He is reportedly is working to shrink the size of new environmental programs in the spending package — believed to be about $500 billion — and publicly rejected other plans, such as federally financed preschool for 3- and 4-year-old, which he has said his state established without federal help.
The original plan also called for free community college, which is unlikely to make the cut, and would cap childcare expenses at 7 percent of income for most people. It also would generously fund home health care for the elderly and disabled and extend a temporarily increased child tax credit from $2,000 annually to $3,000, or $3,600 per child under six.
Democrats can pass the legislation using special budget reconciliation rules that allow for a bare majority in the evenly divided Senate, but the qualms of Manchin and Sinema are preventing consensus.
Democrats also reportedly fear that potential losses next week in governor’s races in New Jersey and Virginia could sink momentum on the bill and a separate Senate-passed $1.2 trillion bipartisan infrastructure bill.