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White House Ideas to Pay      10/21 07:26

   

   SCRANTON, Pa. (AP) -- In an abrupt change, the White House is floating new 
plans to pay for parts of President Joe Biden's $2 trillion social services and 
climate change package, shelving a proposed big increase in corporate tax rates 
though also adding a new billionaires' tax on the investment gains of the very 
richest Americans.

   The reversal Wednesday came as Biden returned to his hometown of Scranton, 
Pennsylvania, to highlight the middle class values he says are at the heart of 
the package that Democrats are racing to finish. Biden faces resistance from 
key holdouts, including Sen. Kyrsten Sinema, D-Ariz., who has not been on board 
with her party's plan to undo Trump-era tax breaks to help pay for it.

   "This has been declared dead on arrival from the moment I introduced it, but 
I think we're going to surprise them, because I think people are beginning to 
figure out what's at stake," Biden said in a speech at Scranton's Electric City 
Trolley Museum, his first visit home since becoming president.

   Negotiations between the White House and Democratic leaders on Capitol Hill 
are underway on what's now a scaled-back package but would still be an 
unprecedented federal effort to expand social services for millions and 
confront the rising threat of climate change. It's coupled with a separate $1 
trillion bill to update roads and bridges.

   Biden and his Democratic Party have given themselves a deadline to seal 
agreement after laboring to bridge his once-sweeping $3.5 trillion vision 
preferred by progressives with a more limited focus that can win over party 
centrists. He has no Democratic votes to spare for passage in the closely 
divided Congress, and leaders want agreement by week's end.

   The newly proposed tax provisions, though, are likely to sour progressives 
and even some moderate Democrats who have long campaigned on undoing the 2017 
GOP tax cuts that many believe unduly reward the wealthy, costing the federal 
government untold sums in lost revenue at a time of gaping income inequality.

   Administration officials spoke with congressional leaders on the tax 
alternatives, according to a person familiar with the private talks and granted 
anonymity to discuss them. The changes may be needed to win over Sinema, who 
had objected to plans to raise the rates on corporations and wealthy 
individuals earning more than $400,000 a year, said the person and several 
others.

   As it stands, the corporate tax rate is 21%, and Democrats want to lift it 
to 26.5% for companies earning more than $5 million a year. The top individual 
income tax rate would rise from 37% to 39.6% for those earning more than 
$400,000, or $450,000 for married couples.

   Under the changes being floated that 21% corporate rate would stay the same.

   However, the revisions wouldn't be all positive for big companies and the 
wealthy. The White House is reviving the idea of a minimum corporate tax rate, 
similar to the 15% rate Biden had proposed earlier this year. That's even for 
companies that say they had no taxable income --- a frequent target of Biden 
who complains that they pay "zero" in taxes.

   And there could be a new billionaires' tax, modeled on legislation from Sen. 
Ron Wyden, D-Ore., the chairman of the Finance Committee, who has proposed 
taxing stock gains of those with more than $1 billion in assets -- fewer than 
1,000 Americans.

   Sinema has not publicly stated her position, and her office did not respond 
to a request for comment.

   Another key Democrat, conservative Sen. Joe Manchin of West Virginia, has 
said he prefers a 25% corporate rate. He has been withholding his support for 
the bill with additional objections to its provisions on climate change and 
social services.

   On the call with the administration and the White House, Wyden said he 
"stressed the importance of putting an end to America's two tax codes, and 
finally showing working people in this country that the wealthiest Americans 
are going to pay taxes just like they do."

   The shift comes as Democrats and Biden appear to have abandoned what had 
been a loftier package in favor of a smaller, more workable proposal the party 
can unite around.

   In the mix: At least $500 billion to battle climate change, $350 billion for 
child care subsidies and free pre-kindergarten, a new federal program for at 
least four weeks of paid family leave, a one-year extension of the $300 monthly 
child tax credit put in place during the COVID-19 crisis, and funding for 
health care provided through the Affordable Care Act and Medicare.

   Likely to be eliminated or shaved back: plans for tuition-free community 
college, a path to permanent legal status for certain immigrants in the U.S. 
and a clean energy plan that was the centerpiece of Biden's strategy for 
fighting climate change.

   Democrats are growing anxious they have little to show voters despite their 
campaign promises and have had trouble explaining what they're trying to do 
with the massive package, made up of so many different proposals.

   It's a tall order that was leading to an all-out push Wednesday to answer 
the question -- "What's in the damn bill?" -- as a press release from Sen. 
Bernie Sanders, the independent from Vermont, put it.

   The president especially wants to advance his signature domestic package to 
bolster federal social services and address climate change by the time he 
departs for a global climate summit next week.

   Manchin has made clear he opposes the president's initial energy plan, which 
was to have the government impose penalties on electric utilities that fail to 
meet clean energy benchmarks and provide financial rewards to those that do.

   Instead, Biden is focused on providing at least $500 billion in tax credits, 
grants and loans for energy producers that reach emission-reduction goals.

   Democrats are moving to retain many of the programs but trim their duration 
to shave costs.

   Biden wants to extend the $300 monthly child tax credit that was put in 
place during the COVID-19 crisis for another year, rather than allow it to 
expire in December, but not as long as Democrats wanted.

   What had been envisioned as a months-long federal paid family leave program 
could be shrunk to as few as four weeks -- an effort to at least start the 
program rather than eliminate it.

   Biden also wants to ensure funding for health care programs, including for 
home- and community-based health care services, supporting a move away from 
widespread nursing home care.

   And a new program to provide dental, vision and hearing aid benefits to 
people on Medicare proposed by Sanders, is likely to remain in some fashion.

 
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