Democrats draw red lines in spending fight

S E E D E D   C O N T E N T

Tensions are flaring among congressional Democrats amid growing red lines over the party's $3.5 trillion spending plan.

The frustrations among Democrats, which have simmered for weeks, are boiling over as lawmakers return to Washington and immediately plunge into a debate over tax hikes to pay for the plan. The House Ways and Means Committee unveiled its tax proposals on Monday.

Democrats are pushing up against a self-imposed deadline to finish drafting the $3.5 trillion spending bill by Wednesday and have it on the House floor by the end of the month - two timelines that have sparked pushback from moderates.

"I think it would be very hard to do," Sen. Joe Manchin (D-W.Va.) told reporters about the Wednesday deadline, adding that "there's an awful lot to be done."

Manchin and other centrists are also likely to be uneasy over a number of the tax provisions, which may not go far enough from the point of view of liberals in the House and Senate.

Veteran Democrats say the battles are to be expected, while acknowledging the differences are real and difficult to move past.

"We have work to do. ... It's our chance to square off, see one another eyeball to eyeball and work out our differences, but there are clearly differences," said Sen. Dick Durbin (Ill.), the No. 2 Senate Democrat.

The fights increasingly are taking place in public, with various members sparring in television interviews and on social media.

Manchin used a pair of TV interviews to reiterate that he can't support $3.5 trillion and to also respond to criticism from Rep. Alexandria Ocasio-Cortez (D-N.Y.), who he referred to as a "young lady" who he had only briefly met.

The remarks sparked immediate progressive pushback, with Senate Budget Committee Chairman Bernie Sanders (I-Vt.) saying Manchin's call for a much lower price than $3.5 trillion is "not acceptable."

Ocasio-Cortez seized on Manchin's description of her, tweeting that: "In Washington, I usually know my questions of power are getting somewhere when the powerful stop referring to me as 'Congresswoman' and start referring to me as 'young lady' instead."

The war of words between Manchin and the two progressives is in many ways a proxy fight for the larger divisions that are building among moderates and progressives over the party's two-part infrastructure strategy.

Moderates are eager to get the Senate-passed $1 trillion infrastructure bill to President Biden's desk, while progressives want to use the larger bill to make good on a handful of promises including combating climate change, expanding Medicare and immigration reform before taking final action on the narrower bill.

"I think a lot of things are going to have to be worked out. A lot of arguments are going to be made. It's not just Joe Manchin or Sen. Sinema. It's other people," Sanders said Monday.

Biden and Democratic leaders need to get past those differences with little room for error. Speaker Nancy Pelosi (D-Calif.) can lose just three of her members while in a 50-50 Senate, Majority Leader Charles Schumer (D-N.Y.) can lose none.

"There's an effort underway to get all 50 senators on a bill," Durbin said. "It's going to take some personal negotiation, person to person, to see what's acceptable"

Progressives are drawing a hard line on keeping the spending bill at $3.5 trillion. Both House and Senate Democrats passed a budget resolution last month that allowed Democrats to pass a bill of up to $3.5 trillion without GOP support.

"We can either spend $3.5 trillion to address the climate now, or we can spend much more than that later - when the crisis has escalated even further and taken even more lives," the Congressional Progressive Caucus warned Monday.

But moderates in both chambers have signaled unease over the spending, and Manchin and Sen. Kyrsten Sinema (D-Ariz.) have specifically said they can't support $3.5 trillion.

Democratic leaders aren't predicting where the final bill will ultimately end up.

Even as big pieces of the Democratic plan, including how to pay for it, remain in flux, Democratic-led House committees are days into voting on pieces of the bill.

But the pieces being voted on by the House are likely to undergo significant changes, as they try to figure out what provisions can win enough support to get through the chamber.

Sen. Elizabeth Warren (D-Mass.) praised the House's child care language but said that she would "like to see us do more to make billionaires, giant corporations and tax cheats pick up the ticket for this package."

Durbin noted there has been some progress, with four to five Senate committees working out deals with their House counterparts ahead of Wednesday's deadline. Yet roughly a dozen are involved in drafting the bill, meaning more furious work will be taking place on both sides of the Capitol in the next 48 hours.

For example, House Democrats are proposing a corporate tax rate of roughly 26.5 percent, though Manchin and Sen. Mark Warner (D-Va.) have indicated they don't want it to go above 25 percent. Asked about the House's higher rate, Warner on Monday said he wasn't an automatic no but that "it depends on how the pieces all fit together."

A group of House moderates on Monday also took issue with energy language, saying that policies from their colleagues are "targeting the U.S. oil, natural gas, and refining industries."

Sen. Sheldon Whitehouse (D-R.I.) called climate provisions a "pretty red" line.

"At the end of the day we're going to have a deal and it's going to be good enough on climate or it won't go," he said.

And House and Senate Democrats bristled over the House Ways and Means Committee not including changes to the Trump-era state and local tax (SALT) deduction cap, which has hit taxpayers in certain parts of New York, New Jersey and California particularly hard.

"We are committed to enacting a law that will include meaningful SALT relief that is so essential to our middle-class communities, and we are working daily toward that goal," Reps. Bill Pascrell (D-N.J.) and Thomas Suozzi (D-N.Y.) said in a joint statement Monday.

Sen. Bob Menendez (D-N.J.) added that he was "extremely disappointed" it was left out of the House bill.

"I expect the final House bill will include a full repeal," he added, "otherwise it'll be hard to support it."