Progressives embrace climate and tax deal despite disappointments

WASHINGTON — With passage of a major part of the Democratic domestic agenda within days, progressives in Congress are rallying, reluctantly but decisively, around a climate, health and tax package that is a shadow of ambitious social policy from cradle to grave overhaul once requested.

Bowing to the reality of their party’s slim majorities in the House and Senate, liberals seem ready to embrace a package written, cut and rewritten to suit the centrists in their ranks — and then presented to them as the only option to achieve one more piece of their ambitions while the Democrats still control the government.

“It’s a gun to your head,” Sen. Bernie Sanders, a Vermont independent and chairman of the Appropriations Committee, said in an interview Friday. He laments the fact that two Democrats — Sens. Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona — insisted on a big reduction in spending and tax increases before agreeing to the package.

“Am I disappointed by this? I certainly am,” he said, declining to commit to voting on the final product. “On the other hand, what you have to weigh is that the future of Earth is at stake.”

The measure, which faces a crucial test vote on Saturday and is set to clear Congress by the end of next week of unanimous Republican opposition, would fulfill a number of long-awaited Democratic priorities, giving the party and President Biden a victory in the midterm elections. for Congress. With nearly $400 billion in climate and energy proposals, it is the largest single federal investment in the effort to slow global warming — “not to be sneezed at,” Mr. Sanders conceded.

It would also extend the Affordable Care Act’s expanded subsidies and make changes to the tax code to make it fairer. And the legislation would deal the drug industry a notable defeat by allowing Medicare, for the first time in its history, to negotiate prescription drug prices directly with pharmacists, potentially saving some older Americans thousands of dollars each year.

“The American people are on our side,” Senate Majority Leader Chuck Schumer, D-New York, said at a press conference on Friday. “The American people know we’re advancing these priorities, and they overwhelmingly support what Democrats are doing.”

But the measure has none of the proposals to invest in public education and expand the nation’s safety net for parents by providing child care, paid leave or a monthly payment to most families with children.

Sitting in a conference room on Friday, Mr. Sanders — who had pushed to spend as much as $6 trillion — noted some of those omissions, calling most parts of the legislation modest steps forward. He has taken to the Senate floor in recent days to describe his frustration with what he sees as the inadequacies of the bill and has vowed to force votes in the coming days to try to get it together.

There have also been additions that have angered progressives. Mr. Manchin secured several concessions for the state’s coal and fossil fuel industries, including tax breaks for carbon capture technology and a requirement that the federal government auction off more public waters and lands for drilling. He also won a separate pledge to complete a controversial pipeline in West Virginia.

Ms. Sinema rejected a proposal aimed at limiting the tax exemption enjoyed by wealthy businessmen, including private equity executives and hedge fund managers, that allows them to pay a much lower tax rate on some income than other taxpayers.

Mr. Schumer noted on Friday that while some lawmakers were disappointed to see that proposal rejected, several liberal senators were pleased that it was replaced in the bill with a new tax on corporate stock buybacks.

However, the progressives’ acceptance of the plan reflects a substantial change in their attitude. With Democrats newly in control of Washington last year, the party’s liberals had envisioned a transformative domestic policy plan that would spend up to $3.5 trillion, financed by tax increases on corporations and the wealthiest Americans, to provide child care and parental leave. strengthen care for the elderly and disabled and expand public education.

They flexed their muscles at critical moments, at one point refusing to support a bipartisan $1 trillion infrastructure package that was a key piece of Mr. Biden’s agenda until they could be sure of the success of his social policy and climate plan. But with Republicans strongly opposed, Democratic leaders had no room to maneuver in the 50-50 Senate, giving Mr. Manchin and Ms. Sinema effective veto power over the package.

Mr. Manchin, a defender of coal and oil, said he feared overspending would exacerbate inflation. Ms. Sinema has embraced investments to fight climate change, but rejected plans to overhaul the tax code and raise tax rates on corporations and the wealthy. Negotiations dragged on for months and just weeks ago appeared to have collapsed, leaving the climate and tax measures deadlocked. But in the space of a week, Mr. Manchin and Ms. Sinema both came after substantial changes to win them over.

Liberals said the resulting package was less than they wanted, but a clear indication of their influence on Capitol Hill and in the White House, where they argued their strong support for a more ambitious bill helped prevent further shrinking of the plan .

“You have to recognize that this is a huge step forward and this is a huge progressive victory,” Rep. Pramila Jayapal of Washington, the chairwoman of the Congressional Progressive Caucus, said in an interview. “And that doesn’t mean it’s all a progressive victory.”

The measure could still change. Senators announced Friday they plan to include $4 billion for drought relief in parched western states, while Senate rules officials reviewed whether the bill met the arcane requirements of the budget reconciliation process. Those rules, which shield the measure from a Republican filibuster, could force revisions in the coming days.

While liberals have set their sights high, particularly after successfully completing the $1.9 trillion pandemic law in March 2021 without Republican votes, some Democrats said rising inflation in recent months has dampened enthusiasm for significant more federal spending.

“Looking back, the $3.5 trillion package was too aggressive — I know others would disagree,” Sen. Mark Warner, D-Virginia, said in an interview. “But when you have a 50-50 Senate, the idea that we could fix it all in one bill was, again, probably too aggressive.”

Mr. Warner, who helped negotiate the $3.5 trillion budget plan that allowed Democrats to begin work on the package and worked closely with Mr. Manchin and Ms. Sinema to assuage their concerns, acknowledged that legislation had its disappointments. “This has been, you know, obviously, a long and winding road, but I think there’s a really good product,” he added.

The Liberals have been particularly focused on climate change investment, squarely crediting young activists and voters for pushing their party into action.

“This is a once-in-a-lifetime opportunity — the Finance Committee has never done anything like it,” said Sen. Ron Wyden of Oregon, the committee’s chairman.

Democratic leaders said they believed they had enough support from Democrats in both chambers to advance the measure in Congress next week. In a sign of that confidence, House Democratic leaders asked lawmakers to prepare to return to Washington on Aug. 12 for a final vote on the measure.