Budget Bill Reopens Divide for Dems    09/17 06:26

   One side is energized by the prospect of the greatest expansion of 
government support since the New Deal nearly a century ago. The other is 
fearful about dramatically expanding Washington's reach at an enormous cost.

   WASHINGTON (AP) -- One side is energized by the prospect of the greatest 
expansion of government support since the New Deal nearly a century ago. The 
other is fearful about dramatically expanding Washington's reach at an enormous 
cost.

   They're all Democrats. Yet each side is taking vastly different approaches 
to guiding the massive $3.5 trillion spending bill through Congress.

   The party is again confronting the competing political priorities between 
its progressive and moderate wings. The House version of the bill that was 
drafted this week ushered in a new phase of the debate that could test whether 
Democrats can match their bold campaign rhetoric on everything from income 
inequality to climate change with actual legislation.

   Any stumble may have serious consequences for the party's prospects during 
next year's midterms, when it will try to prevent Republicans from retaking 
Congress. The finished product could alienate centrists who say it goes too 
far, or frustrate those on the left who argue it's too timid at a moment of 
great consequence.

   "This is critically important for Democrats and for their message in next 
year's election," said former New York congressman Joe Crowley, a veteran 
Democrat who was upset in the 2018 primary by progressive star Rep. Alexandria 
Ocasio-Cortez. "We're going to blink and we're going to be in 2022."

   Crowley said bills proposing trillions of dollars in spending were "simply 
something I never had to deal with in my 20 years" in office. "These are 
enormous figures by any standard," he said.

   But, Crowley added, no matter the final price tag, "Let's not lose sight of 
the fact that this will be transformational regardless."

   With Republicans universally opposed to the bill, Democratic leaders have a 
narrow path as they navigate an evenly divided Senate and thin House majority.

   Many Democrats agree on the goals included in the legislation, such as 
providing universal pre-kindergarten and tuition-free community college while 
increasing federal funding for child care, paid family leave and combating 
climate change. The party also is aiming to expand health care coverage through 
Medicare and create pathways to citizenship for millions of immigrants in the 
country illegally.

   But there are differences over how much such a measure should cost and how 
it should be paid for.

   Democratic Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, 
who met privately with President Joe Biden on Wednesday, have balked at the 
$3.5 trillion price tag.

   House Democrats, meanwhile, have proposed a 26.5% top corporate tax rate to 
help cover the cost. That's less than Biden's 28% target. But Manchin has 
pushed for an even lower corporate rate of 25%.

   There are also divides over how to impose levies on top earners. Biden has 
advocated restoring the top tax rate on capital gains to 39.6%. House 
Democrats, however, would tax such income, which is often generated by the 
wealthy, at 25%. They would also impose a 3% surcharge on individual income 
above $5 million.

   Biden further supports higher taxes for those earning at least $400,000 
annually, even as some progressives would like to see a lower threshold for 
higher taxes to kick in.

   "We're not going to raise taxes on anyone making under $400,000. That's a 
lot of money," the president said Thursday. "Some of my liberal friends are 
saying it should be lower than that."

   Biden discussed the matter Thursday with House Speaker Nancy Pelosi and 
Senate Majority Leader Chuck Schumer, and the White House said they agreed "it 
is only fair" that the spending bill is paid for "by repealing the Trump tax 
giveaways to the wealthiest Americans and big corporations."

   Differences over tax thresholds are technical, but they represent a desire 
among many House Democratic leaders to protect their most vulnerable members in 
moderate districts from attacks that they support profligate taxes and spending.

   "There's a supposition by our friends on the progressive left that it hardly 
matters what you do, as long as it's big," said Will Marshall, president of the 
Progressive Policy Institute, a centrist Washington think tank. Instead, 
Democrats are ideologically diverse enough that "people who run in competitive 
races simply can't embrace the same kind of ideas that people who run in safe, 
blue Democratic districts," Marshall said.

   Joseph Geevarghese, executive director of the progressive activist group Our 
Revolution, countered that "It would be incredibly problematic for the 
president to say, 'Look we won both chambers of Congress. We won the White 
House. We couldn't deliver better health care, we couldn't deliver 
transformational change on the climate.'"

   "It is not going to be explainable to the American people," Geevarghese 
said, "and I think there'll be consequences as a result."

   Democrats have been here before. The progressive versus moderate divide 
dominated the early stages of the party's 2020 presidential primary with Biden 
and Vermont Sen. Bernie Sanders serving as the most prominent representatives 
of each end of the spectrum.

   Sanders, an independent who caucuses with the Democrats, scored early 
victories. But the party ultimately coalesced around Biden, in part because of 
an urgent desire to unify behind a candidate who could have the broadest appeal 
and defeat then-President Donald Trump.

   Biden has since largely kept the party unified by adopting many top 
progressive priorities, such as spearheading a $1.9 trillion coronavirus relief 
bill that passed in March and supporting a now-stalled proposal to raise the 
national minimum wage to $15 per hour. He has resisted, however, some of the 
biggest progressive goals, including the universal health care proposal known 
as Medicare for All.

   But it's unclear whether that equilibrium can be maintained.

   Already, Our Revolution and other progressive activists have staged protests 
outside the offices of moderates including Manchin. They've begun referring to 
themselves as the "tea party of the left" combatting "obstructionist corporate 
Democrats."

   Manchin is so far unmoved. "I've been very clear and very open" about the 
need to reduce the budget bill's price tag, he said.

   In the House, meanwhile, Democratic Florida Rep. Stephanie Murphy, head of 
the moderate Blue Dog Coalition, opposed parts of the spending package in 
committee, arguing that her party's effort to muscle it through was too rushed.

   Progressives, though, have responded by playing their own legislative 
hardball. Democratic Rep. Pramila Jayapal of Washington, co-chairwoman of House 
Progressive Caucus, said the group remains unified behind a vow not to support 
a separate bill that many moderate Democrats are more excited about -- a $1 
trillion, bipartisan public works measure -- until the spending bill advances.

   "Joe Manchin has power, of course. We need his vote. But so do, really, 
every single one of us, because in the House, (Democrats) have a margin of 
three votes," Jayapal said on a conference call with progressive activists. 
"Everyone's a Joe Manchin here."

   Sanders, who spearheaded the proposal as head of the Senate Budget Committee 
after some progressives pushed for spending plans worth as much as $6 trillion, 
says the current price tag is compromise enough and has vowed not to accept 
further cuts. He says tax increases on the rich can resonate with working class 
voters from both parties.

   Marshall said many voters in battleground House districts do indeed applaud 
higher levies for the wealthy as "tax fairness," but that support wanes if 
additional spending focuses more on social programs than economic stimulus.

   "It has to be tied to a plan to create good jobs, spur innovation and 
growth," said Marshall, who added that many in swing districts have also 
expressed concerns about running up federal debts and contributing to rising 
inflation.

   Still, he said, it would be even more costly for Democrats if the squabbles 
over the budget proposal's final price tag drag on.

   "I think Democrats will find a way to compose their differences simply 
because they can't afford to have this president fail," Marshall said. "The 
margins are just too narrow."