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Democrats drive toward a scaled back $1.75 trillion spending agreement

<i>Anna Moneymaker/Getty Images</i><br/>President Biden and Democratic leaders are driving toward a $1.75 trillion agreement that will unlock the votes for the separate infrastructure package.
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Anna Moneymaker/Getty Images
President Biden and Democratic leaders are driving toward a $1.75 trillion agreement that will unlock the votes for the separate infrastructure package.

By Phil Mattingly and Lauren Fox, CNN

Listening mode is done. Informational meetings are over. Public posturing and private positioning are a thing of the past. Now — after what seems like roughly a dozen straight “critical weeks” for President Joe Biden’s sweeping multi-trillion agenda — is the moment the rubber meets the road.

Biden and Democratic leaders are driving toward a $1.75 trillion agreement that will unlock the votes for the separate infrastructure package — and arm Biden with two momentous legislative victories — as he departs for the world stage later this week.

The reality remains there are a handful of significant — and thorny — policy disputes that still must be reconciled in a matter of days. But there is no question that in the minds of top White House officials and congressional Democrats, the time for busted deadlines or elongated policy deliberations have come to an end.

The bottom line is that by the time Biden leaves for his foreign trip on Thursday, his $1.2 trillion bipartisan infrastructure bill could be signed into law, with an agreement on a $1.75 trillion economic and climate package in hand. Biden told reporters on Monday, “With the grace of God and the goodwill of neighbors,” a deal will be made before the trip, adding, “It’d be very positive to get it done before the trip.”

But the former doesn’t happen without the latter. And after a weekend of intensive negotiations from Wilmington, Delaware, to Washington, DC, the latter is still very much a work in progress.

Still, with momentum and a clear (and attainable, officials say) goal, one source involved in the talks framed the moment like this: “It’s time for an outcome. Period.”

The countdown

  • Days until Biden travels to Rome: Three
  • Days until surface transportation funding patch expires: Six
  • Days until Biden arrives for UN Climate Change Conference: Seven
  • Days until the Election Day in Virginia: Eight

Just flagging

Lawmakers have roughly six weeks until, short of action, the government runs out of funds and the US defaults on its debt.

Where things stand

The topline

CNN’s Manu Raju reported Manchin has told Democratic leaders he is open to $1.75 trillion as the topline for the economic and climate package — up from his long-held topline of $1.5. That is significant — and right around where White House officials and Democratic leaders have been trying to land things in the last several days.

But Manchin hasn’t explicitly agreed to that topline yet, two sources said, noting it’s still a work in progress.

The timeline

Raju also reported that Democratic leaders are targeting a vote on the infrastructure proposal as soon as Wednesday.

That will only be possible if a detailed agreement is reached on the climate and economic package. But, if accomplished, that vote would time out in a way that would give Biden a win the day before he departs for Rome for the Group of 20 conference.

Veteran advice

In terms of timeline, it’s clear what Democratic leaders are driving toward, the intent of that timeline and the merits in hitting their target. But in negotiations like this, even over a detailed outline, here’s a good rule of thumb: Always take the over.

If there’s a hard deadline for any infrastructure vote, to the extent any ever exists, it’s Saturday, when the surface transportation funding patch expires (and the day before Biden arrives at the UN Climate Change Conference in Glasgow).

Overall outstanding issues

For the sake of accuracy, there’s value to shorthanding here with the most overused adage on Capitol Hill: nothing is agreed to until everything is agreed to. (It’s basically the equivalent of someone saying “it’s all gonna come down to turnout” in the lead up to the election. Yeah, no kidding.)

So from housing to health care, climate to corporate taxes, things remain very fluid. But the key issues and thorniest holdups remain consistent:

Medicare expansion

It’s clear dental coverage won’t be in there, though the $800 voucher program is still in play, sources involved say. How they finesse hearing and vision, given independent Vermont Sen. Bernie Sanders has practically made it a redline, is hugely important in this moment.

Paid leave

White House officials thought they’d figured out a way to thread the needle by dropping the duration of their proposal to four weeks from 12, and the overall price tag from roughly just shy of $500 billion to roughly $100 billion. But this is still subject of intense debate, sources said, and when asked about it on CNN, Pelosi didn’t exactly give explicit assurances: “That’s our hope, that’s what we’re fighting for.”


This is now a negotiation between Arizona Democratic Sen. Kyrsten Sinema, White House officials and the chairs and staff of the House Ways and Means and Senate Finance Committees. There are a number of options in play and on the table, according to people involved. They are listed below. There is still significant work to do on this front to fully flesh out and knit together the financing pieces of the package, people involved said.


The big question remains what happens to the $150 billion allocated for the Clean Energy Performance Program, which has been dead for several weeks. Biden said during the CNN town hall that Manchin was open to directing most, if not all, toward bolstering emissions-reducing tax credits and incentives. There are already $300 billion locked into the proposal. The shape of that final $150 billion is still an intense debate, people involved say.


Critical for northeastern Democrats (including Schumer), this has been back and forth for several days. It’s costly and primarily benefits the wealthy. But the reality here is without it, House Democratic leaders have made clear they won’t have the votes — New York and New Jersey Democrats have been that explicit about the need for something on this front.

It’s still very fluid and a two-year delay in the cap is currently being pursued, people involved say.

What Manchin is still looking for

This is a good reminder that the topline here isn’t all that White House officials have been working through with Manchin. The West Virginia senator’s list of concerns straddles a large range of the Democratic programs this bill touches. The four weeks of paid family leave are still very much a concern for Manchin, who has strong ties to the business community. He’s also continuing to push for means testing on a buffet of benefits that Democrats would offer to American families from child care to the child tax benefit. And then there is the energy provisions, which still are in flux.

Biden told reporters on Monday that his meeting with Manchin and Schumer “went well. A few more things to work out, but it went well.”

Sinema’s sticking points

Might as well put them here: taxes, taxes. taxes. Democrats spent much of the weekend working to formulate their billionaire’s tax, a provision that is so complicated that the Finance Committee has been trying for two years to write it.

Want to know how real Sinema’s position that she won’t raise the corporate tax rate? Look no further than the herculean effort that transpired over this weekend to finish up language on this billionaires tax and a corporate minimum tax. Her position is real and unmovable and, despite grumbling from House Ways and Means Chairman Richard Neal, it appears that the tax provisions are going to move in her direction. Aides say they hope to have a proposal ready to unveil by mid-week. We’ll see.

Filling the revenue gap

It’s not a great development to have a roughly $600 billion shortfall in your revenue proposals due to the opposition of one senator.

Yet that’s where Democrats have found themselves and the scramble has opened the door to potential tax proposals progressives could have only dreamed of just a few months ago.

To be completely clear here: the process of vetting, scrubbing and including a proposal to tax the unrealized annual gains on the specific liquid assets of billionaires or those who report income of $100 million for three consecutive years is, in the words of one official, “a real lift.”

Yet Pelosi told Tapper she expected it would be included in a final proposal and she expected to be publicly released Monday.

Senate Finance Committee Chairman Ron Wyden, an Oregon Democrat, and his staff have worked on the proposal for several years, putting out the first white paper in September 2019, so it’s not new by any means.

But the questions of implementing a mark-to-market system ranging from the administrative to the enforcement to the valuing of illiquid assets remain very real at the moment, and not just from those who oppose the idea outright.

Beyond the billionaires tax

If there’s a positive to the slimmed-down proposal for Democrats, it’s that it makes it does make it easier to finance.

Still, losing the ability to increase marginal tax rates due to the opposition from Sinema is a big hit and his been one of the most urgent issues White House officials have been working on with their House and Senate tax-writing counterparts.

Here are some of the top proposals in play, per people involved:

  • 15% corporate minimum tax
  • Excise tax on corporate stock buybacks
  • Tax enforcement on wealth individuals
  • Tax on unrealized gains of billionaire assets

For your planning purposes

An agreement on the outlines of the economic and climate package does not equal a done deal or a looming vote. While aides involved say significant pieces of what would make up the proposal are already written, the pieces that aren’t, or remain only partially drafted, are the most complex and will be subject to significant debate (and negotiations) in the days and weeks ahead.

This is often forgotten, the process of drafting legislative text is both time consuming and arduous, with ample opportunity for short-term breakdowns or potential deal implosions.

If past is precedent, an agreement on the outlines will eventually lead to a final package and votes. But it’s going to take significant time and negotiation to draft, even more to ensure virtually everyone in the respective Democratic caucuses is on board.


A vote on the reconciliation bill is still a ways away, even if a framework agreement comes to be this week.

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