White House and Dems rush to rework $2 trillion Biden plan

Democrats and the White House are quickly reworking key elements of President Joe Biden’s $2 trillion domestic plan. They have reduced the social services and cut the climate change programs, and they are considering new taxes for corporations and wealthy to help pay for a more conservative package.

White House and Dems rush to rework $2 trillion Biden plan

These changes are coming as Biden appeals more strongly to the American public, in particular Thursday night's televised townhall, for what he calls the middle-class values that lie at the core of his proposal. Democratic leaders show great respect for Biden's preference to quickly wrap up negotiations and reach an agreement in the narrowly controlled Congress, as long-sought programs get adjusted or removed.

Top Democrats are open to even a new White House proposal that abandons Trump-era tax rates and instead proposes taxing billionaires' investment incomes to finance the deal. Negotiations are expected to be completed by the week's end, with some leaders racing to complete them.

"We have a goal. We have a timeline. We have milestones and we have met them all," Nancy Pelosi (D-Calif.), House Speaker, said on Thursday that "it will pass soon."

The White House and Democratic leaders have been in talks to reduce the $3.5 trillion package to $2 trillion. This would be an unprecedented federal effort by the federal government to expand social services and combat climate change.

Biden faces a stark Republican opposition with no Democratic votes spared. He must ensure that all members of his party, centrists as well as progressives, are aligned.

The White House abruptly changed its course late Wednesday, when it proposed new ways to finance parts of the proposal. It halted a long-planned rise in corporate and top income taxes rates, but added others, including a tax based on the investment gains for the most wealthy Americans.

Biden is facing resistance from key holdouts. Especially Sen. Kyrsten Silena, D. Arizona., who has not been supportive of her party's plan for undoing President Donald Trump’s tax breaks for large corporations and individuals making more than $400,000 per year.

However, the new tax provisions are likely to upset progressives and some moderate Democrats. They have long campaigned for the repeal of the Republican-backed 2017 tax cut that many believe unduly rewards the wealthy and costs the government enormous amounts in lost revenue during a time when there is a widening income gap. Many are angry that a single senator could hinder this goal.

Pelosi stated that she prefers to remove these tax breaks but was open to considering other options. She said, "We'll be watching."

The corporate tax rate currently stands at 21%. Democrats propose to increase it to 26.5% for businesses earning more than $5million a year. For those with incomes greater than $400,000 or $450,000 for married couples, the top individual income tax rate would rise from 37% to 39.6%.

The corporate rate will not be affected by the proposed changes.

However, the changes would not be beneficial for large companies or the wealthy. The White House has revived the idea of a minimum corporate rate similar to the 15% Biden proposed earlier this year. This applies even to companies with no taxable income, which is a common target for Biden who complains that they pay "zero" taxes.

The Senate Finance Committee chairman, Sen. Ron Wyden (D-Ore.), would model the new tax on the richest individuals on legislation. He proposed taxing stock gains for people who have more than $1B in assets -- less than 1000 Americans.

Sinema has not made public statements about her position. Her office didn't respond to a request to comment.

Conservative Sen. Joe Manchin, West Virginia's key Democrat, stated he would prefer a 25% corporate tax, but his opposition to the bill is primarily in areas like climate change and social service.

Wyden spoke with the White House and administration about the importance of ending America's two tax codes and showing the working people that the richest Americans will pay the same taxes.

The emerging package, although less than the original, represents the most significant overhaul of federal balance sheets in at minimum a generation.

Biden and his party seek to strengthen middle-class households, combat climate change, and stop the trend towards rising income inequality.

The mix includes at least $500 billion to combat climate change, $350 million for child care subsidies, free prekindergarten, and a federal program that provides at least four weeks of paid parental leave. There is also a one year extension of the $300 monthly child credit, which was established during the COVID-19 crises.

Plans for tuition-free community colleges, which provide a pathway to permanent legal status for some immigrants in the United States, and a clean energy plan that was central to Biden's strategy to combat climate change are likely to be cut or eliminated.

Democrats are becoming more anxious that they have spent a lot of money on this package. They have also had trouble explaining why it is made up of so many pieces.

It is something the president wants to promote especially when he leaves next week for a global summit on climate change in Scotland.

Manchin stated that he does not support the president's original energy plan. It was for the government to impose penalties on electric utilities failing to meet clean energy benchmarks, and to reward those who do.

Biden instead is focusing on providing tax credits, grants, and loans of at least $500 Billion to energy producers who achieve emission-reduction targets.

Pelosi supported Biden's plan for extending the $300 monthly child tax credit for an additional year. This was in addition to allowing it to expire December 31, but not as long as Democrats desired.

The federal paid family leave program that was originally planned to last months could now be reduced to just four weeks. This is an attempt to start the program, not eliminate it.

Biden wants to make sure that health care programs are funded and to add a new program to offer hearing, vision, and dental benefits to Medicare beneficiaries. This was proposed by Senator Bernie Sanders, I-Vt.