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Democrats Address Tax and Medical Obstacles with $ 2 Trillion Bill

Washington — Disagreements over tax increases and medical proposals have become a central stage in Democratic talks Approximately $ 2 trillion in social policy and climate framework, President Biden and top lawmakers met again to resolve the remaining issues.

Top Democrats hope to outline the bill in the coming days and compete to vote for another $ 1 trillion infrastructure bill in time for the October 31 deadline. The Democratic Party has linked the passage of the public works bill to the house with an agreement on social policy and climate change packages. These are two delicate steps that took months.

Democrats say President Biden has met with a number of lawmakers this week and has made progress towards an agreement, but serious issues remain unresolved.Biden Hosts Speaker of the House

Nancy Pelosi

(Democratic Party of California) At the White House on Friday morning, Senate leader Chuck Schumer (Democratic Party of New York) virtually attended the meeting.

“Much of what we want to do is written,” Mrs. Pelosi said after the meeting. “Now, it’s just a small decision.”

At the heart of the negotiations is finding a way to make enough money to cover legal spending.Thrown by Senator Kyrsten Cinema (Democratic Party of Arizona) Many of the Democratic tax increases are at stake, She claims that she does not support raising marginal tax rates on businesses, capital gains or individuals.

That position encourages Democrats Trying to find a set of optionsTo fill the hundreds of billions of dollars in revenue gap left by the absence of these rate hikes, including a new annual tax on billionaires’ unrealized profits. Other possibilities that Cinema seems to be open are excise taxes on stock repurchases and a 15% tax increase aimed at companies currently paying low tax rates for the legal use of tax incentives. Includes the minimum corporate tax rate of.

However, some alternatives face skepticism from other top Democrats and represent a potentially long-term effort to develop a new income plan.

“Paying a fee is efficient and easy to implement, unlike the more esoteric idea of ​​taxing or taxing it. Fees are simple in nature and people understand it. “More,” said Richard Neil, D., Massachusetts, chairman of the Houseways and Means Commission.

“It’s hard to go back and revisit all of that,” he added.

On Friday, White House spokesman Jen Psaki mentioned closing the Medicare tax gap as a proposal under live debate. Current legislation has a layer of Medicare tax that applies to people who earn more than $ 200,000 or couples who earn more than $ 250,000, with an additional 3.8% in addition to the normal tax rate.

These 3.8% taxes apply to wages, investment income and self-employed income, but not to active business income. The gap was given to taxpayers —Including Mr. Biden himself— Ability to characterize income as business income to avoid taxes.For many Closely held business owners, The proposed tax may represent a tax rate increase.

The House Ways and Means Committee’s tax bill included a rule that a 3.8% tax would be levied on its active business income. The proposal will raise $ 252 billion in 10 years.

While many of the bill’s revenue measures are plagued by uncertainty, the Democratic Party is heading to an agreement on several spending programs. At a CNN event on Thursday, Mr Biden elaborated on many of the cuts the Democrats would make to their packages to strengthen their support at Capitol Hill.

At the CNN event on Thursday, President Biden elaborated on many of the Democratic cuts on packages.


Photo:

JONATHAN ERNST / REUTERS

He said the law does not include a two-year tuition-free community college, and a 12-week paid vacation proposal is likely to eventually cover only four weeks, expanding Medicare for visual, auditory, and dental care. Care. Mr Biden said policymakers are discussing a $ 800 voucher for dental insurance.

The president also acknowledges that the $ 150 billion program aimed at encouraging utilities to generate more electricity from clean sources will not be part of the final bill.

Still expected as part of the bill are a universal kindergarten program, childcare subsidies, and a range of tax incentives for clean energy sources.

Mrs. Pelosi said on Friday that Democrats need to reach an agreement on the bill’s medical provisions. This is expected to be funded in a shorter period of time than the Democrats originally wanted.

The Democratic plan to pay President Biden’s $ 3.5 trillion Build Back Better initiative needs to be properly balanced to appeal to progressives without alienating moderates. WSJ’s Gerald F. Save discusses with tax policy reporter Richard Rubin.Photo Illustration: Todd Johnson

Democrats who wanted to create a permanent, affordable care subsidy that was expanded as part of the $ 1.9 trillion Covid bailout package earlier this year were probably extended for three years, according to an aide. Said it would be.

Lawmakers also wanted to permanently close the coverage gap for certain states in the state who chose not to expand Medicaid as part of the ACA. Plans to create a new federal Medicaid program could be too expensive and too time-consuming to establish, and instead the legislators are more likely to qualify those people for years with ACA subsidies. Said.

Democrats are also expected to include a permanent extension of Medicaid’s postnatal coverage from 60 days to a year, based on a temporary extension included in the Covid bailout bill passed by Congress earlier this year. Was there.

“Too many women have died from having babies in the United States,” said Congressman Robin Kelly (D., IL), who called for the clause to be included.

Congressman Robin Kelly of Illinois has demanded that the bill include a clause that permanently extends Medicaid’s postpartum coverage from 60 days to one year.


Photo:

Justin L. Fowler / Associated Press

Parliamentarians said negotiations were ongoing over the proposal To allow Medicare to negotiate directly with pharmaceutical companies To reduce the cost of prescription drugs. According to people involved in the debate, there remains a proposal to impose excise taxes of up to 95% on certain eligible drugs if federal negotiators and pharmaceutical companies cannot agree on prices.

Continued negotiations on social policy and climate packages have increased the likelihood that Democrats will have to postpone voting on infrastructure bills again. The infrastructure bill passed the Senate this summer with widespread bipartisan support, and the Democratic Party of Japan called for support for the Senate for a vote in the House.

“Let’s just separate these two bills and reflect the reality that they aren’t related. There’s no leverage to withhold one bill,” said Stephanie Murphy, Democratic Party of Florida. I added.

Other Democrats said they were not worried about the impending deadline. Mr Biden had previously supported postponing the House’s vote on the infrastructure bill. Progressivists are considering withholding public works bills as a way to pressure centrists to support social policy and climate bills.

“Whether it happens today, tomorrow, or next Friday isn’t as important to me as receiving a good invoice,” said Congressman James McGovern, D., Massachusetts.

Democratic budget plan

Write in Andrew Duehren at andrew.duehren@wsj.com , Natalie Andrews Natalie. Andrews @ wsj.com And Christina Peterson kristina.peterson@wsj.com

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Democrats Address Tax and Medical Obstacles with $ 2 Trillion Bill

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