Democrats haggle as deal comes into focus

Disagreements among Democrats on several key issues, including ambitious proposals to expand Medicare benefits and lower the price of prescription drugs, are holding up a framework agreement on a major budget reconciliation package.

Senate Majority Leader Charles Schumer (D-N.Y.) and Speaker Nancy Pelosi (D-Calif.) are pushing hard to reach a deal on the reconciliation bill this week to give President Biden something to take to a global climate summit in Glasgow, Scotland, next week.

They also want to boost Biden and their party before Tuesday’s high-stakes gubernatorial contest in Virginia by having the House pass a $1 trillion bipartisan infrastructure bill.

But it’s far from clear they’ll reach either goal amid stumbling progress toward a deal.

White House officials on Tuesday downplayed the need to hammer out a deal before Biden left the country, tacitly acknowledging the likelihood that talks are expected to stretch beyond this week.

Schumer pledged he would keep pushing to expand Medicare benefits and to lower drug costs, despite stiff opposition from centrist Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.).

Without a deal on those two issues, he risks losing the support of Senate Budget Committee Chairman Bernie Sanders (I-Vt.), who reiterated Tuesday that dropping either reform from the package would be crossing a red line.

“Bottom line is that any reconciliation bill must include serious negotiations on the part of Medicare with the pharmaceutical industry, lower the cost of prescription drugs. That’s what the American people want,” Sanders told reporters.

He insisted that any “serious reconciliation bill must include expanding Medicare to cover dental, hearing aids and eyeglasses.”

Manchin, however, bashed the idea of expanding Medicare earlier in the week, warning the program faces insolvency as soon as 2026, according to a recent report from Medicare’s board of trustees.

Manchin reiterated his concerns about Medicare’s finances during an interview sponsored by The Hill’s “A More Perfect Union” festival Tuesday.

“Medicare, 2026, insolvent,” he said. “I know when these trust funds go insolvent, people start getting cut back or they have to pay more into [what] their premiums would cost or basically they go to the doctor and a doctor says I’m not going to take Medicaid anymore or Medicare anymore because reimbursements are so low from the federal government,” he said.

Sinema is the biggest obstacle to empowering Medicare to negotiate lower prescription drug prices, senators say.

Now negotiators are looking at a proposal to limit Medicare’s negotiating power to only a handful of drugs instead of the broad spectrum of medication that Sanders wants covered.

Sanders vented his frustration over the shrinking of his ambitious vision, which he campaigned on during his 2016 and 2020 presidential runs.

“You know what the power of the pharmaceutical industry is? To the best of my knowledge, they have already spent some $300 million just on lobbyists. They have TV ads, they have radio ads, they’re making huge campaign contributions. Same thing with the fossil fuel industry. Same thing with the health care industry,” he fumed. 

Democrats also disagree over a proposal to expand health care coverage for low-income people in states that opted out of expanding Medicaid under the Affordable Care Act.

Manchin on Monday raised his concern about the proposal because the federal government would cover 100 percent of the cost, while states that expanded the program under the Affordable Care Act are required to pick up just 10 percent.

He is also raising concerns about a proposal to broaden the power of the IRS to review banking activity.

“I think that one’s going to be gone,” he said at an event Tuesday hosted by The Economic Club of Washington, D.C.

Manchin said he raised his concerns over the proposal directly with Biden, telling the president: “Do you understand how messed up that is, to think that Uncle Sam is going to be watching?”

Democrats still need to reach agreement on their plan to pay for the package, which is now expected to wind up costing between $1.7 trillion and $2 trillion.

Senate Democrats are coalescing around a proposal to tax the unrealized capital gains of billionaires and people who earn more than $100 million in three consecutive years.

But they still have to sell key players in the House, including Ways and Means Committee Chairman Richard Neal (R-Mass.) and Budget Committee Chairman John Yarmuth (D-Ky.), on the idea. Both chairmen have raised questions about how difficult it will be to implement and how reliably it can be counted on to raise future revenues.

Senate Democrats heard some good news Tuesday afternoon when Sinema, who earlier shot down their plans to raise the corporate tax rate and the top marginal individual income tax rate, said she would support a plan to establish a corporate minimum tax.

“This proposal represents a commonsense step toward ensuring that highly profitable corporations — which sometimes can avoid the current corporate tax rate — pay a reasonable minimum corporate tax on their profits,” she said in a statement.

Senate Democrats on Tuesday said they’re also on a path to reach a deal on the bill’s climate provisions and predict it will include a methane fee, a top priority of environmental groups fighting climate change.

Senate Commerce Committee Chairwoman Maria Cantwell (D-Wash.) said she expects “there will be something there” on a methane fee.

But the details of the methane fee have yet to be worked out.

Manchin warned Tuesday that it had to be crafted in the right way to win his support.

“You can’t use things as a hammer,” he warned. “You’ve got to give an incentive to do the right thing. … Methane pricing done wrong is very detrimental, it won’t happen.”

Senate Democrats are also haggling over adding energy-related provisions that critics such as Sen. Jeff Merkley (D-Ore.) say would incentivize future use of fossil fuels.