The Wall Street Journal: Democrats Jockey Over Healthcare, Taxes in $3.5 Trillion Package

THE WALL STREET JOURNAL, ANDREW DUEHREN, KRISTINA PETERSON

Democrats faced fresh intraparty disagreements over the details of their $3.5 trillion healthcare, education and climate bill, as House Democrats began releasing drafts of segments of the legislation in a race to attempt to complete it in the coming weeks.

Democrats are hoping to construct the wide-ranging bill—which aims to significantly expand the nation’s social safety net, reduce carbon emissions and raise taxes on companies and high-income households—by the end of the month. To do so, lawmakers are trying to pre-emptively sort through differences between House and Senate Democrats over many of its provisions, a task that has so far proven difficult.

Central to the emerging tensions are competing opinions about how to allocate the $3.5 trillion to the various programs, as Democrats jockey for funding for their favored priorities. Those battles could become more pitched as some moderates push to reduce the $3.5 trillion top line, which could ultimately require cutting or excluding provisions from the bill.

Among the topics Democrats are wrestling with are the funding for and duration of the three central healthcare provisions of the bill: an extension of expanded Affordable Care Act subsidies; Medicare coverage for dental care; and an effort to provide healthcare coverage for some people in Republican-led states that haven’t expanded Medicaid. Democrats are also discussing how much money to put toward workforce development and higher education, as well as how to administer a proposed paid leave program.

“There are some disagreements as always comes about, but I am pleased with the progress we’re making to come up with a tripartite proposal that the president, House and Senate, that we all agree on,” Senate Majority Leader Chuck Schumer (D., N.Y.) said.

The House Ways and Means Committee, which has jurisdiction over a broad swath of the bill, released on Tuesday proposals for a 12-week paid leave program, additional retirement support, and expanding Medicare to cover hearing, vision and dental care, among other programs.

Rep. Richard Neal (D., Mass.), the chairman of the Ways and Means Committee, has pushed for the Treasury Department to administer the paid leave program, breaking with others Democrats who want the Social Security Administration to do it, according to a Democratic aide.

Under the Ways and Means plan, coverage under Medicare for dental care would begin in 2028, a timeline that has frustrated some other members of the Democratic caucus.

“Do I think we should take such a long time to implement the dental provision? No, I don’t,” said Sen. Bernie Sanders (I., Vt.). “There’s going to be a lot more work that has to be done.”

One idea Senate Democrats are considering is a voucher for seniors to help defray the cost of dental procedures during the period it takes the government to set up the new Medicare benefit, aides said.

Meanwhile, other lawmakers have focused on keeping in place expanded ACA subsidies and offering healthcare coverage to some people in states that haven’t expanded the Medicaid program.

“My priority is ensuring the ACA exchange programs and Medicaid expansion—that those valuable resources continue to be available for America’s working families,” said Rep. Abigail Spanberger (D., Va.) on Wednesday.

On Monday, leaders of the Congressional Black and Hispanic Caucuses wrote a letter to Democratic leaders urging them to focus on providing healthcare coverage in states that didn’t expand Medicaid for people who don’t qualify for federal ACA subsidies.

“Closing the Medicaid coverage gap is one of the single most important steps we can take to reduce racial health inequities across the United States,” the lawmakers wrote.

House Speaker Nancy Pelosi (D., Calif.) said Wednesday that lawmakers would be able to include all of their healthcare programs in the final package, though that could become increasingly challenging if moderate Democrats push for a lower amount of overall spending.

“We’re all for that,” Mrs. Pelosi said of expanding Medicare benefits. “I’m glad that we will have an extension of the very important Affordable Care Act subsidies,” she said. “I think both will be present. That’s not a problem.”

Moderate Democrats are demanding that the full cost of the bill be covered with tax increases and new government savings, though many have also raised concerns about significantly increasing taxes. Sen. Joe Manchin (D., W.Va.), a pivotal centrist in the 50-50 Senate, has repeatedly signaled his opposition to spending $3.5 trillion and adding to the budget deficits.

“The provisions in the bill that increase deficits should be offset, with the possible exception of measures to combat climate change,” centrist Reps. Stephanie Murphy (D., Fla.) and Henry Cuellar (D., Texas), two chief deputy whips, wrote in a letter to House Democratic leaders last Friday.

Democrats are still grappling with the specifics of their proposed tax increases, though they are expected to propose raising the corporate tax rate, tightening the net on U.S. companies’ foreign earnings, raising the top income tax rate and increasing taxes on capital gains. A proposal to tax unrealized capital gains at death has drawn concern from some Democrats who fear it could impact family farms. The Ways and Means Committee is expected to mark up the tax proposals next week.

Even with the various tax proposals, which also include enhancing enforcement efforts at the Internal Revenue Service, generating $3.5 trillion in revenue and savings will be difficult.

Mrs. Pelosi said Democrats might not fully offset the cost of the entire package with new sources of revenues and savings. “We will pay for more than half, maybe all of the legislation,” she said.

With very narrow control of the House and Senate, Democrats will have to achieve almost unanimous support for it to pass both chambers. Democrats are using a process tied to the budget called reconciliation to pursue the legislation without any votes from Republicans, who have lined up against the proposals.