Democratic divisions flare up over tax hikes and drug pricing

Democratic divisions flare up over tax hikes and drug pricing

WASHINGTON — Tensions were rising in their ranks on Tuesday, a day before Democrats’ self-set deadline for completing committee work on their massive social policy bill over how to structure and finance it.

Disagreement over how to tax the vast fortunes of tycoons like Jeff Bezos and control drug prices has emerged as flashpoints as Democrats may be the most significant extension of the social safety net in half a century.

Democratic leaders insisted they were on track to finish their work this fall and reach an agreement. But liberal lawmakers were agitating for a big tax hike on the ultrarich in the package, while three moderate Democrats in the House threatened to derail their leaders’ efforts to advance plans for drug price controls.

Hanging on to disputes is an increasing competition for resources. The $3.5 trillion price tag was always going to be full, fitting all of the party’s priorities into the original, fully funded 10-year. But prominent lawmakers are now demanding lower spending and objecting to exploitation of some sources of revenue, making it difficult to compromise.

“There are many contentious issues,” said Senator Bernie Sanders, independent from Vermont and chairman of the budget committee. “How aggressive are you in raising money for the pharmaceutical industry through Medicare negotiations? When you raise money, how aggressive are you on expanding Medicare to cover dental, hearing aids and eye glasses?”

“You have to balance them all,” he said.

The disputes are particularly troubling because Democrats, facing a wall of Republican opposition, are pushing their plan through a special budget process known as reconciliation, which protects it from a filibuster. and can be passed with a simple majority. But to do so would require almost complete party unity, for their low margins in the two houses; 50-50 In the Senate, they cannot tolerate a single defection, and in the House, they can spare at least three votes.

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This effort is a huge undertaking, fraught with political and procedural challenges. Senate Democrats spent lunch Tuesday reviewing a PowerPoint presentation that lasted at least 35 minutes and detailed the work that had been completed and the issues that were outstanding.

“We had a strong, comprehensive and really constructive discussion in our caucus today,” Senator Chuck Schumer, a New York Democrat and majority leader, told his weekly news conference.

One of the issues to be resolved was one that erupted in the House on Tuesday when two moderate Democrats, Representatives Scott Peters of California and Kurt Schrader of Oregon, came out against the Democratic leadership’s drug pricing plan and proposed a less aggressive alternative. given that would most likely produce very little savings for the government. Another Democrat and a co-sponsor of that option, Representative Kathleen Rice of New York, also said she would vote against the leaders’ plan, which would allow Medicare to negotiate prices for the government and those paid in other countries. Will allow drug prices to be tied up. .

The powerful pharmaceutical lobby has swung into action to scrap the measure, which was supposed to produce savings of at least $500 billion to pay off a large portion of the bill. If all three Democrats joined Republicans in opposing it, they could block the legislation from going ahead with the House Energy and Commerce Committee, denying Democrats a substantial portion of revenue, allowing them to expand health care provisions. needs to pay for its more ambitious plans. the profit.

“I’m open to the revenue growth the president has proposed, but I don’t think it’s fair to risk the future of American innovation to pay for these other things,” Mr Peters said in an interview.

“I’m swallowing my whistle on a lot of these issues, which is where I worry,” he said. “This is an issue that I have always raised, which I cannot support.”

Another issue is the decision by senior Democrats on the House Ways and Means Committee to focus their $2.1 trillion tax package instead of levying billions of dollars in wealth owned by the richest Americans, which grow every year and There is no tax if there is no sale.

According to projections released Tuesday by Congressional Tax Scorekeepers, it may be President Donald J. Trump’s signature legislative achievement in office would amount to a much larger tax cut for the poor and middle class in its early years than the $1.5 trillion tax overhaul. But moderate Democrats have said they believe it doesn’t go far enough.

“Wealth tax is not something that a bunch of politicians sit down and think, ‘Great idea.’ This is something that the American people say we need to have basic fairness,” said Senator Elizabeth Warren, a Democrat from Massachusetts, who has proposed an annual 2 percent tax on household assets of more than $50 million, which amounts to $1 billion. rising up to 6 percent.

Faced with the delicate politics of a narrowly divided Congress, senior House Democrats opted to be more mindful of moderates’ concerns than their party’s progressive ambitions.

Some liberals on the Ways and Means Committee were defending that view on Tuesday. Texas Representative Lloyd Doggett, a second-ranking Democrat on the panel and a veteran progressive, said swing-district Democrats simply cannot be subjected to Republican attacks that would bring a sweeping tax on wealth.

“People who aren’t rich think they will be,” he said, “and they don’t want to be punished for their success.”

Other Democrats suggested that the tax on wealth would not pass constitutionally. But getting the revenue to pay for all proposed social spending wouldn’t be easy without tapping into the billionaires’ vast reserves of wealth, which have gone from year to year without taxes.

Margot Sanger-Katzo, Jim Tankersley And Katie Edmondson Contributed to reporting.

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