Biden Jumps Into Democrats’ Big Budget Battle

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With House Democrats rushing to meet a September 15 deadline for writing the $3.5 trillion spending package that contains much of President Joe Biden’s economic agenda, the president himself jumped into the political battle that could determine whether the proposed legislation ever becomes law.

Biden met with Sen. Kyrsten Sinema (D-AZ) in the morning on Wednesday to discuss the effort and planned to meet with Sen. Joe Manchin (D-WV) later in the day. Both lawmakers have expressed deep reservations about the size and scope of the Democratic proposal, and with no votes to spare in an evenly divided Senate, they will have to be convinced to support the package if it’s to have any chance of passing.

The meetings confirm that Biden, the former senator, will be using his influence in Congress to move his agenda forward. As Rep. Pramila Jayapal (D-WA), chair of the Congressional Progressive Caucus, put it earlier this week, “We are going to need the White House to be all in” in order to get the bill passed.

Sinema’s office provided a positive if non-committal assessment of the discussion: “Today’s meeting was productive, and Kyrsten is continuing to work in good faith with her colleagues and President Biden as this legislation develops,” spokesman John LaBombard said.

Getting SALTy: The reluctant Democratic senators aren’t the only hurdles the White House faces. In the House, a group of lawmakers from a handful of relatively high-tax states is still pushing for a repeal of the $10,000 cap imposed in 2017 on state and local tax deductions, known as SALT.

In a sign that their pressure may be working, House Ways and Means Chairman Richard Neal (D-MA) released a joint statement with two key SALT activists, Reps. Bill Pascrell, Jr. (D-NJ) and Tom Suozzi (D-NY), saying that they are “committed to enacting a law that will include meaningful SALT relief that is so essential to our middle-class communities and we are working daily toward that goal.”

House Democrats reportedly have discussed a two-year suspension of the cap as part of the $3.5 trillion spending package. Removing the cap would come with a high price, however, costing about $88 billion in lost revenue in 2021, according to the Joint Committee on Taxation – a loss of revenue that will make it that much harder for Democrats to offset the cost of the ambitious spending plans.

No to drug price negotiations: In another threat to Biden’s agenda, a trio of centrist Democrats shot down a drug pricing initiative that is intended to help offset the cost of the $3.5 trillion spending package by saving the government billions of dollars on pharmaceutical purchases.

With Democratic Reps. Kurt Schrader (OR), Scott Peters (CA) and Kathleen Rice (NY) joining Republicans in voting no, the House Energy and Commerce Committee failed to pass a measure designed to give the government the power to demand lower drug prices from manufacturers and limit price increases over time. The Democrats say they are worried that lower drug prices could harm innovation. Their critics charge that they are simply putting the financial interests of drugmakers ahead of ordinary citizens.

Democratic leaders said they aren’t giving up on the measure, which could make it into the final package via another legislative route. “Delivering lower drug costs is a top priority of the American people and will remain a cornerstone of the Build Back Better Act as work continues between the House, Senate and White House on the final bill,” said a spokesperson for Speaker Nancy Pelosi (D-CA).

PhRMA, the massive lobbying group representing the pharmaceutical industry, celebrated Democrats' failed vote. “This should be a strong signal to the House leadership that there is broad support for lowering costs for patients without sacrificing access to new cures and treatments,” the special interest group said in a statement Wednesday.

The bottom line: Democrats are nearing the end of the process of writing their $3.5 trillion spending bill, but the political battle over its final shape and passage still has a long way to go, with a timeline potentially stretching out over weeks or even months.

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