Reportedly, Chuck Schumer might have made some progress in the last couple of days with his Senate Democrat caucus on Joe Biden’s shrinking reconciliation bill. But can Nancy Pelosi deliver in the House? She can only afford to lose three votes to carry any legislation on a party-line basis, which is still three more than Schumer’s margin but close enough to matter.
And at least for now, it looks like Pelosi’s down to two. In an open letter to Maine’s legislative leadership, Rep. Jared Golden (D-ME) declared his opposition to the current form of the reconciliation package. For those paying attention to Joe Manchin’s objections, much of this will sound familiar, but in much greater detail than any previous public dissent:
U.S. Rep. Jared Golden told state lawmakers Thursday that congressional Democrats’ multi-trillion dollar budget proposal is poorly targeted and includes too many budget “gimmicks” as he remains one of the few members of his party in the House not supporting the plan.
The Thursday letter gives the clearest picture yet of Golden’s objections to the current bill — which many Democrats see as central to President Joe Biden’s agenda — and comes as lawmakers in Washington continue to debate what will be included in the legislation and how they will pay for it.
Golden, a Democrat from Maine’s swingy 2nd District, criticized several high-profile parts of the proposed legislation in a letter to Senate President Troy Jackson, D-Allagash, House Speaker Ryan Fecteau, D-Biddeford, and other Democrats, including the child tax credit, funding for child care and Medicare expansion.
“In its current form, the draft bill is not sufficiently targeted to working- and middle-class families and makes too frequent use of budget gimmicks, like artificial program sunsets or delayed starts,” Golden wrote.
Golden’s objections might carry more weight with his fellow moderates simply because they’re not particularly moderate objections, at least not in the main. His point on budget gimmickry certainly represents a more moderate approach, as it does with Manchin, but that’s mainly because it’s based more on transparency and honesty. Golden also warns that these gimmicks will create even more crises on Capitol Hill and further erode any ability to work across the aisle:
In its current form, the draft bill is not sufficiently targeted to working- and middle-class families and makes too frequent use of budget gimmicks, like artificial program sunsets or delayed starts. The consequences of these problems are twofold. First, the bill counterintuitively undermines its aim of rebalancing our tax and spending policies by doubling down on or newly investing in policies that would benefit some of the wealthiest households in America. Second, by relying on timing gimmicks to implement the policies in the bill, the proposal makes working families the targets of yet more congressionally-manufactured cliffs, all while obscuring the true costs of program expansions if they were extended through the full 10-year budget window.
The effect of obscuring the true cost of these programs is intentional, as Golden well knows. It’s an attempt to cheat the deficit-neutrality condition in reconciliation by underreporting the costs of the programs. Republicans, as well as Manchin and Kyrsten Sinema, have called out Biden and Democratic bill authors on this point repeatedly, but Golden’s letter shows that others are skeptical at best as well.
Golden’s other objections tend toward the progressive, however. For the most part, Golden accuses the authors of the bill of favoring the wealthy over the working class, a rather stinging rebuke. Front and center in that effort is a growing effort to add in a pay-off wealthy supporters in California and New York by eliminating the cap on state and local tax deductions, or SALT:
Also under discussion, though not yet included in the draft legislation in Congress, is an effort to roll back an existing limitation on the State and Local Tax (SALT) deduction, effectively giving a big tax break to individuals in higher-tax, higher-income states like New Jersey and California. This is bad policy and would disproportionately benefit the wealthy. Under current law, households can deduct up to $10,000 that they pay in state and local taxes from the amount of their income that is subject to federal taxes. Raising or eliminating this cap only benefits those households that pay more than $10,000 in state and local taxes. Thus, according to some estimates, 98.6 percent of taxpayers with incomes under $100,000 would see no benefit from this change. By contrast, 93 percent of millionaires would benefit. Overall, more than half of the tax cuts from the SALT cap repeal would go to the wealthiest 1 percent, and 97 percent would go to the top 20 percent.
Eliminating the SALT cap, as some have proposed to do, would come at an enormous hit to the Treasury: the Congressional Budget Office estimates this would cost up to $88.7 billion per year. Again, as we seek ways to rebalance the scale in favor of working- and middle-class Americans, increasing the value of SALT would dilute those efforts and hamper our ability to make the kinds of investments that people in Maine need.
That’s not yet in the reconciliation bill, but Golden’s seen enough of the negotiations to call it out now. Similarly, the tax changes already in the bill lack the means-testing necessary to keep the wealthy from getting the most benefit of these changes, echoing a key Manchin demand. That applies to the child care assistance credit:
While I support child care assistance for working- and middle-class families, I do not support extending this program to wealthy families who do not need it. This is not a fringe position within the Democratic Party. The Chairman of the House Education and Labor Committee, Congressman Bobby Scott, originally introduced this bill with a household eligibility cap at 200 percent of state median income. That eligibility cap was eliminated by an amendment adopted in the Committee’s markup of the bill. While Chairman Scott voted for that amendment, he has stated publicly that he only did so because if the amendment was rejected, other Democrats on the committee had threatened to tank the entire bill. As currently designed, this entitlement has no income limit — it is only technically closed to households with more than $1 million in assets, and all a household needs to do to meet that test is self-certify that they meet it. This is not a meaningful or effective test to ensure that the benefit goes to the families that need it.
And even to the bill’s climate-change proposals, which Golden warns will hammer the working class by making energy unreliable:
Elsewhere in the draft proposal, the bill devotes $39 billion to incentivize homeowners to make energy efficient upgrades to their home heating and cooling systems and property. While I think it is valuable to encourage these investments, the bill as drafted is a missed opportunity to make meaningful changes to current law’s structure of these credits, which flow in large part to upper-income households. Indeed, 2018 IRS data show that over 77 percent of the credit’s value goes to households with incomes higher than $75,000. Further, because these credits are nonrefundable, taxpayers with no tax liability — nearly 44 percent of U.S. households — are ineligible for these incentives. If we want to make investments to reach those with the least means to make these investments on their own, it would be wise for Congress to reevaluate their structure during this current debate.
While working to mitigate and address climate change, we must also reflect the realities of life in our state and protect jobs in the communities we represent. For me, that means looking out for mills and their workers in Madawaska, Old Town, Baileyville, Skowhegan, Rumford, and Jay, all of which depend on reliable energy delivery on demand; farmers in need of good farmland who face pressure from commercial solar development; and lobstermen who fear being crowded out of historic fishing grounds by offshore wind projects. It is imperative that we develop renewable energy in Maine and across the country, but it is just as critical that we simultaneously protect our constituents’ jobs and community livelihoods.
Some of this might have already gotten addressed in the Senate negotiations. Golden notes in his letter that he’s working off the $3.5 trillion bill proposal, which has all but disappeared in the last few days in favor of something closer to $2 trillion. But how did it get there? The trims likely made even greater use of the budgetary gimmicks to which Golden objects in this letter, and almost certainly not by changing much of the climate-change proposals that Golden opposes here as well.
If Golden’s the only one objecting in Pelosi’s caucus, then she can still squeeze the bill through the House … as long as she doesn’t get any no-shows on voting day. However, given Golden’s lengthy and detailed list of objections to the policies within the bill, it’s not difficult to imagine that a few more House Democrats might have just as much skepticism about this boondoggle, especially as Biden’s approval rating drops and the midterm cycle gets closer. Golden may not have meant this as a manifesto, but by taking this public, Golden will force fellow House Democrats to defend against these criticisms in their election campaigns, and that may already be an uphill battle in competitive districts.
If Pelosi can’t get Golden, then this might be yet another point of failure for this ridiculous and extreme-progressive boondoggle.