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Manchin Says Deal on Economic Plan on Track for This Week

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(Bloomberg) — Senator Joe Manchin said Monday Democrats should be able to reach a deal this week on a framework for President Joe Biden’s economic agenda.

The comment is the best sign for Biden’s domestic agenda in months of intra-party wrangling over tax and spending increases. A deal could allow the House this week to pass a $550 billion infrastructure bill, which progressives have held up until there’s a firm agreement on the broader package, which including spending on social programs and measures to address climate change. 

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Manchin said he hasn’t moved on his insistence that the overall price tag for the tax and spending package be limited to $1.5 trillion rather that the $3.5 trillion originally set out by Democratic leaders. And he indicated all the details won’t be done this week.

“Having it finished with all the ‘t’s’ and ‘i’s’ and everything crossed and dotted will be difficult from the Senate side because we have an awful lot of text to go through,” Manchin said. “But as far as conceptually, we should. I think a framework should be” agreed on this week. 

Manchin is a pivotal player in negotiations on the tax and spending package and a key vote in the 50-50 Senate. He met on Sunday with Biden and Senate Majority Leader Chuck Schumer in an effort to break a months-long stalemate. Biden said Monday he hopes to get an agreement on the plan before he leaves Thursday for summits in Europe that include a U.N. climate change conference in Glasgow.

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“It’d be very, very positive to get it done before the trip,” Biden told reporters.

There are still some crucial details to be worked out.

The West Virginia Democrat said he is open to replacing Biden’s plan for tax increases for corporations and high-earners with a so-called billionaires tax on assets. That has been part of the discussions since Arizona Senator Kyrsten Sinema signaled her opposition to the original tax hike plan. 

The tax would apply to a wide variety of items like stocks, bonds, real estate, and art, with gains in value taxed on an annual basis, regardless of whether or not the asset is sold. Annual decreases in value could also be deducted, according to a version of the proposal, which dates to 2019.

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Other tax proposals in flux include a possible two-year suspension of the $10,000 cap on state and local tax deductions, the imposition of a corporate book income tax and a stock buyback tax. 

On healthcare policy, Manchin indicated there are still differences between him, Biden and progressive Democrats. Manchin has resisted expanding Medicare to include dental, hearing and vision benefits. He said Monday that because the program faces insolvency in five years it shouldn’t be expanded without addressing deeper fiscal problems. 

“You’ve got to stabilize that first before you do an expansion,” he said.  He also said he is opposed to an proposed expansion of Medicaid eligibility to states which have so far refused to expand the program, because states like West Virginia would still be paying part of the costs while the newly eligible states would get a free ride. 

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“The problem I have with that one is right now we’re paying 90/10. For states that held out to get rewarded with 100 percent that’s not fair,” he said. 

Manchin and Sinema have been using their leverage to force changes in the plan. Manchin’s opposition to Biden’s “Clean Electricity Performance Program,” a centerpiece in the climate provisions, has caused that $150 billion item to be dropped. 

He said Monday he is working with Biden to bolster renewable energy tax credits and incentives for energy efficiency. 

Many of Biden’s original priorities appear on track to remain in the package but at a shorter duration than originally proposed. These include Affordable Care Act premium subsidies, universal pre-kindergarten, renewable energy tax credits, earned-income tax credit expansion, housing rental vouchers and mortgage assistance and clean water funds. 

©2021 Bloomberg L.P.

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