By Phil Mattingly and Lauren Fox, CNN
Biden apparently had enough of that, going in depth on the policy, concessions, personal interactions with hold-out senators and more in his CNN Town Hall. That wasn’t an accident, one person familiar with matter said, as it served as the next play in Biden’s sharp pivot this week to close out talks that have moved in fits and starts for months.
That push will continue on Friday, officials say, even as the prospects for the “framework” deal pushed by Democratic leadership appears out of reach.
The bottom line is that Biden expressed optimism about reaching a deal in the town hall but demurred on specific timeline. Behind the scenes Democratic leaders and White House officials are not so sanguine, multiple people familiar with the conversations said. A framework deal may not come to pass by Friday, but there is no question the clear push is to have a deal — and at least a vote on the $1.2 trillion infrastructure bill — by the end of next week.
“Now is not the time to take our foot off the gas,” one White House official told CNN.
What to watch Friday
Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer have formed a clear united front with Biden over the course of the last several months. Over the last several weeks the trio have spoken almost daily, officials say, and strategic decisions haven’t been made without the sign-off of all three.
There are discussions about Pelosi and Schumer coming to the White House on Friday to meet with Biden in person as they map out the end game for the next seven days, according to two people with knowledge of the talks. Pelosi will remain in Washington over the weekend to keep pushing this deal.
The outstanding issues
Biden said there were roughly “four or five” major outstanding issues in the talks. That lines up with what sources on both sides of Pennsylvania Avenue have said, though it probably doesn’t give a good window into how complex those issues are to reconcile.
- Climate: Biden may not have been willing to say it explicitly, but the Clean Energy Performance Program, a cornerstone climate policy, is out. The fight now is over what happens to the $150 billion allotted for that program. There’s optimism from supporters most, if not all, can be directed into the existing $300 billion in tax credits and incentives. Key West Virginia Democratic Sen. Joe Manchin isn’t there yet, however.
- Paid leave: Biden confirmed CNN’s reporting that the duration of the proposal had been dropped to four weeks from 12, due to Manchin’s opposition. But the roughly $100 billion proposal isn’t final and, in the words of one House Democrat “is very much still a debate — an intense one.”
- Medicare expansion: Biden called it a reach to secure Medicare expansion for hearing, vision and dental. This is a very big issue if there isn’t a pathway — independent Vermont Sen. Bernie Sanders is the most critical supporter for the push (which also carries wide ranging public support.) There was some thought earlier this week that they could address vision and hearing, while creating a pilot voucher program for dental, for which coverage expansion would be significantly more difficult to implement in the near term. Biden mentioned the voucher idea Thursday night. It’s unclear where vision and hearing will land at this point.
- Prescription drug price reform: Sinema, as well as a number of members who come from hubs where drug makers are a major employer remain the major roadblock here. This is also a major Democratic priority and, perhaps equally as important, is a significant revenue source in the financing of the bill. This issue is, in the words of one person in the negotiations, “nowhere close to resolved right now,” as drafts of a significantly scaled back proposal have been kicking around.
- Taxes: This is far and away the biggest issue right now. And it’s probably not even close. Biden laid out, in the most blunt of ways during the town hall, Arizona Democratic Sen. Kyrsten Sinema’s opposition to corporate and individual tax rate increases. Hours of conversations between White House officials, the top congressional tax writers and Sinema have been focused on this the last few days. This is not close to reconciled at the moment, and Sinema’s position has tossed the process into a very complicated (and potentially lengthy) effort to knit together revenue options that can both cover the roughly $1.8 trillion cost of the proposals while maintaining support of every other Democrat.
That’s not easy when you remove the lowest hanging fruit options that had both sweeping support and clear pathways to hundreds of billions in revenue. At all. And yet that’s exactly what Sinema has done here.
Some clean up
A White House official was quick to follow up Biden’s comments on Sinema’s opposition and not having the votes for certain tax increases with this:
“The President was referring to the challenge of having the votes to move forward on raising the corporate rate, not to the ability to raise revenue through a range of other tax fairness proposals which Senator Sinema supports.”
Real talk here
What the White House official said above is true, and a source made clear Thursday thta Sinema has identified and agreed to revenue options across the areas of priorities for Biden that would cover the full cost of the bill. They include support for a corporate minimum tax, international tax changes, mark to market taxation proposals and a potential tax on billionaire assets. Tax enforcement, always part of the proposal, has Sinema’s support as well.
But just because Sinema has agreed to use some or all of those doesn’t mean anyone else has. And that’s the real issue here — as House Ways and Means Committee Chairman Richard Neal made clear to Sinema directly in a private meeting. Knocking out corporate and individual rate increases, not to mention the opposition to prescription drug reform, creates a trillion dollar revenue hole. That’s … large. And very complicated to fill, even if proposals technically exist to do so.
“I did point out. It’s the ninth inning,” Neal told CNN’s Manu Raju. “I mean when are you going to vet these issues.”
Time running out
It’s not necessarily hyperbolic to lay out that the timeline to finish these negotiations is an extraordinarily complex high-wire act, without any kind of safety net attached.
There are two legislative weeks before another recess, an impending deadline of October 31 when the Highway Trust Fund runs out of money and the President’s departure for his foreign trip that includes the United Nations climate change summit looms, which Biden has made clear to Democrats he doesn’t want to arrive at empty handed.
It’s why leaders would prefer to wrap all of this up next week even if that would require them to convince Manchin and Sinema, convince the progressives that it was a good enough deal and get a vote on the bipartisan infrastructure bill in the House all in the course of a few days. Moving the larger reconciliation bill through the Senate is going to take time, another vote-a-rama and Republicans have made clear they won’t make this one easy.
If lawmakers don’t have a deal in the next two weeks, this effort could get pushed to the backburner as Democrats are going to have to deal with the National Defense Authorization Act, a looming debt ceiling and another government shutdown right after Thanksgiving.
“We have other things to do,” one Democratic senator lamented yesterday about the circular discussions that are ongoing right now.
The reason a deal isn’t imminent
It is not for lack of trying or cajoling or hard-fought negotiations, all of which have been happening around the clock this week and last and the one before that. Instead, it’s simply a factor of how long haggling over major changes to the tax code and Medicare and environmental policy take. We’ve said this before, but it’s worth coming back to again and again. Any one of these programs would be a massive undertaking, a transformational shift in US domestic policy. Democrats are trying right now to do seven at once.
Some insight into how this is being negotiated
The White House is in the driver’s seat in these talks. The President and his team are handling Sinema and Manchin directly as evidenced by lengthy meetings staff took with the duo in their hideaways Thursday, and the reality is that clinching one or both of those votes would go a long way to getting everyone else in line. Rank and file members, however, aren’t sitting on the sidelines here, which can make it hard to see the full picture of just where things stand.
Among the issues that members haven’t quite given up on in restructuring the way the US government deals with pharmaceutical companies on drug pricing. Multiple Democrats who spoke to CNN on Thursday were still holding out hope that reworking drug pricing could be a major pathway to cover some piece of the larger bill. There has been a new flurry of meetings on this issue. And Democrats are looking at a whole host of ways to trim back the original bill and still get some money out of the program.
The fight over drug pricing isn’t more important or consequential than any of the other dozen negotiations right now in these talks, but it does give some insight into how hard it is to change the status quo. The onslaught of ads and lobbying against a change that Democrats have largely agreed on for years has brought the party to a place where it may not even be possible to do something at all.
A month ago, the odds of doing anything on the issue seemed slim to none, but Democrats have ramped up efforts in the last 48 hours (in part because of Sinema’s resistance to other pay-fors) to see if there is a narrow way to index the cost of just a few drugs to reduce costs. It would look very different than the international price indexing model that was the backbone of the original drug pricing bill, but it is something.
“We are in a different place than we were a month ago,” one Democrat said about the need to get something. “There are three tough remaining issues. How do we raise revenues, can we close the gap and deliver something meaningful on prescription drug negotiations and climate.”
A final note on those details
A note for those who spent a lot of time ferreting out critical details of Biden’s policy compromises, based on private meetings in the Oval Office and in staff negotiations on Capitol Hill: The reporting was spot on, according to the President, on paid leave, the child tax credit, the demise of free community college, the climate push, the roadblocks on tax increases, etc.
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