Feeling Berned: Sanders insists on Medicare expansion, drug pricing for reconciliation

Looks like we’re still on track for Reconcilageddon! Nancy Pelosi pledged a vote on both that bill (or “framework”) and the already-Senate-blessed bipartisan infrastructure bill by the end of this week. She told Jake Tapper that Democrats had reached a “90%” level of agreement on the massive social-engineering reconciliation bill.

Does this sound like ninety percent agreement?

“By my count,” the CNN host comments, “there are half a dozen red lines out there.” At least, and those are just the red lines that Sanders mentions here. As Manu Raju points out, there are “still major issues” left to be worked out. Those are not, as CNN’s chyron claims, “sticking points.”

NBC’s Leigh Ann Caldwell recaps just a few of the obstacles in the path for reconciliation:

Paid family leave, one of the hallmarks of President Joe Biden’s social safety net agenda, is in jeopardy of being pared once again or even cut from a major spending bill over a lack of support from Sen. Joe Manchin, D-W.Va.

Manchin, one of two Senate Democrats who have chipped away at Biden’s “Build Back Better” proposal, is against including four weeks of paid family and medical leave, said two sources familiar with the negotiations. The provision was recently presented as a compromise to the 12 weeks Biden initially proposed. …

Manchin is also souring on Medicare vouchers to help cover annual dental costs, as well as a push to expand Medicaid in Republican-led states that have not expanded coverage. Biden’s original proposal called for broadening Medicare coverage to include dental care.

Some Democrats said too many key components of Biden’s spending package have already been gutted to satisfy Manchin and Sen. Kyrsten Sinema of Arizona, the other Democratic holdout in the Senate. New opposition to paid family leave, a priority for Biden and progressives, would mark a significant setback in negotiations over the bill.

Manchin also delivered a body blow to progressives’ hopes for using the IRS as a snoop on private financial information:

Manchin has offered some conceptual support for the “billionaires tax” on unrealized capital gains, known as “mark to market” taxation. However, that’s also not picking up much steam on Capitol Hill, as its complexity has made other Democrats skittish about the idea:

The proposal, championed by Senate Finance Committee Chairman Ron Wyden (D-Ore.), is seen as a way to help pay for the party’s social spending package while accommodating Sen. Kyrsten Sinema’s (D-Ariz.) opposition to raising tax rates.

But some Democratic lawmakers have expressed reluctance to including a new tax proposal in the package, and tax experts say there could be challenges in crafting its details.

“To try to get this tax regime right at the last moment, without public input, is daunting,” said Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center, whose former director now works in the Biden administration. …

“The simplest thing to do is raise the rates. It’s more predictable, and I don’t think there’s any corporate taxpayer who is going to say ‘Well, I’m paying more taxes but at least they didn’t raise the rate,’ ” Rep. Dan Kildee (D-Mich.), a Ways and Means Committee member, said Friday.

Kildee said that alternatives such as taxing billionaires’ investment gains annually are “interesting ideas that might be helpful” but aren’t a good substitute for rate hikes.

House Democrats also said it could be a challenge to include the billionaire’s tax idea given that lawmakers haven’t thoroughly examined it.

“For it to be introduced in the eleventh hour when it’s a new, complicated concept for most members to wrap their head around, I just don’t know how realistic that will be,” said Rep. Ron Kind (D-Wis.), another member of the Ways and Means Committee.

That may be especially true with Mitch McConnell firing up the messaging on taxation against future income:

“The far left is officially calling the shots, and that’s where the latest new craziness comes into the picture. If public reporting has it right, the Democrats are so desperate to raise taxes that they are now proposing to tax money the American people haven’t even made yet,” McConnell said.

“Let me say that again. They’re now proposing to tax money the American people haven’t even made yet. Yes, you heard me right. So much for the quaint idea that you had to actually make money first before the IRS could tax it, now Democrats want to tax money you haven’t made yet.” …

“Let’s just think of the unintended consequences. Like the fact that in the event of a market crash or financial crisis, the government would be on the hook for massive automatic tax cuts for billionaires. Or the fact that some experts suggest this new scheme would drive the wealthiest Americans away from stocks and bonds, push them into other tax shelters, and thereby reduce the growth and ordinary Americans’ investments that households rely on for college funds and 401(k)s,” he said.

“Or the fact that new innovative entrepreneurs whose start-ups increase in value could be hit by a crushing tax bill. The next visionary start-up founder could have to sell away ownership prematurely just to pay uncle sam. So our democratic colleagues have become so tax-hike happy that they’re throwing spaghetti at the wall to see what sticks. They are talking about rewiring the economy on the backs of a couple discussions. It is a change that has not received any, any meaningful study or scrutiny.”

How will this all end? Who knows? What is pretty clear at the moment is that there’s nowhere near 90% agreement among Democrats on this reconciliation package, and that even a “framework” by the end of the week is an almost impossible ask. That leaves Pelosi in a jam — again — on the bipartisan infrastructure bill. Progressives forced her to postpone this bill once, and they’re likely to do so again this week absent a reconciliation bill they support, which it looks like they won’t get. The disarray will continue indefinitely unless one side finally blinks — and it won’t be in time to help out Terry McAuliffe or Phil Murphy.