House approves Biden’s social spending plan
House Democrats on Friday approved their sweeping measure to strengthen the nation’s social safety net programs and begin to respond to the climate crisis, a sorely needed show of progress for President Biden’s legislative agenda even as it faces more hurdles.
The bill passed 220 to 213, with support from all but one Democrat and no Republicans.
Democrats’ attempt to pass the bill Thursday night was foiled by Minority Leader Kevin McCarthy (R-Bakersfield), who held control of the House floor by speaking for more than eight and a half hours, preventing a vote from occurring until Democratic leaders finally decided to reschedule it for Friday morning.
The House Republican leader used his speech to attack the bill, Democrats and Biden’s agenda. He spoke continuously from 8:38 p.m. (Eastern) Thursday until 5:11 a.m. Friday, beating the record for the longest House floor speech, set by Speaker Nancy Pelosi (D-San Francisco) in 2018.
The surprise last-minute hitch capped months of delays and negotiation among House Democratic moderates and progressives, Senate Democrats and the White House over the bill. During that time, the total price tag was halved to roughly $1.7 trillion, and some of its most progressive policies were cut or trimmed to win the support of centrists.
Still, the social spending bill — which Democrats call “Build Back Better” — would advance numerous priorities that progressives have been seeking for years, including expanding Medicare coverage to include hearing aids, allowing the federal government to negotiate some Medicare drug prices, implementing universal preschool for 3- and 4-year-olds and providing child-care subsidies for most Americans.
Rep. John Yarmuth (D-Ky.) called it “the most consequential legislation for American families since the New Deal,” promising that it will “overhaul and reimagine entire sectors of our economy and society so that everyone, not just those at the top, will benefit from a growing economy.”
But that overhaul — as well as the cost — has drawn strong rebukes from Republicans.
“This is an absolute disgrace,” Rep. Jason Smith (R-Mo.) said of the bill. He said some provisions being considered, such as paid family leave and reinstating part of the federal deduction on state and local taxes, would benefit the wealthy at the expense of the middle class. “It will change America as we know it.”
McCarthy said he thinks that the policy is so unpopular, Democrats could lose over 63 seats in next year’s midterm election if they enact it.
“For the first time in the country,” McCarthy said, previewing his party’s midterm election messaging, “this generation doesn’t believe they’ll be better off than the generation before them. This bill almost guarantees it. They’re guaranteed they’re going to have to pay more and get less.”
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His speech, which aroused support from his fellow Republicans, came as McCarthy was facing questions about his leadership from some members of his caucus, including allies of former President Trump like Rep. Marjorie Taylor Greene of Georgia, for not punishing members of his party who supported Biden’s infrastructure bill.
After passage in the House, the bill will go through a gantlet in the Senate, where it will likely be changed, perhaps significantly, to get the support of all 48 Senate Democrats and the two independents. House Democrats would then have to vote again, which could push final passage into late December.
Senate Majority Leader Charles E. Schumer (D-N.Y.) said the Senate would take up the bill as soon as technical preparations are completed.
Several policy issues remain unresolved and will need to be addressed before a Senate vote. After the House vote, Pelosi and other Democrats tried to play down the policy differences between the two chambers as the normal process of enacting sweeping legislation.
The Senate is expected to strip the House’s provision for four weeks of paid family and medical leave due to opposition from Sen. Joe Manchin III (D-W.Va.), a key centrist.
The House bill would provide deportation protection to immigrants who have been in the country illegally since before 2011 — a much less ambitious immigration policy than Democrats had hoped for. It is unclear whether the proposal can get through the Senate.
The bill is also expected to expand the federal deduction on state and local taxes — scaling back a Trump-era policy that has affected many Californians — but there is significant conflict between the House and Senate about how to do so.
The House plan would raise the so-called annual SALT cap from $10,000 to $80,000 through the end of the decade, and revert it back to $10,000 for one year in 2031. Sens. Bernie Sanders (I-Vt.) and Robert Menendez (D-N.J.) have a separate plan that would merely exempt people from a cap if their income falls under a certain amount, possibly $400,000.
But the idea of lifting the cap has already become a political cudgel for Republicans and even one Democrat, who say it is a reward for the wealthy. Rep. Jared Golden (D-Maine) opposed the bill because of the “SALT giveaway.”
Despite the unfinished business, House Democrats were eager to make a show of progress after weeks of uncertainty over Biden’s agenda. Moderates who held up a vote on the social spending bill two weeks ago as they awaited the final cost estimates quickly fell in line once the figures were released on Thursday.
Earlier this month, Democrats abandoned plans to keep the social spending bill tied to another effort — a measure to address the nation’s crumbling roads and bridges. Biden signed the infrastructure bill into law earlier this week after progressive Democrats relented on their insistence that the two bills be voted upon together.
Progressives said they would place their trust in Biden to deliver the vote in the Senate, where Manchin and Sen. Kyrsten Sinema (D-Ariz.) have already negotiated the bill down significantly from the $3.5-trillion plan Democrats once envisioned.
The political futures of both the president and congressional Democrats are tied up in the two pieces of legislation. Biden told congressional Democrats in a closed-door meeting last month that his presidency and their control of Congress may hinge on how the public views the measures. That thought took on even greater urgency as Democrats watched the Virginia gubernatorial election go for Republicans and as Biden’s approval ratings have fallen.
Democrats are already discussing an expansive campaign to sell the package and ensure that voters know it was Democrats who enacted the policies, some of which are expected to be popular.
In order to reduce costs, most of the policies would be in effect for only a few years. That would leave a future Congress — which could be run by Republicans — and White House with the question of whether to renew them or allow them to expire, setting the provisions up as 2024 presidential campaign issues.
The bill may also mark the last major legislative efforts for Pelosi, who said in 2018 that she would not serve as speaker beyond 2022. The universal pre-K and child-care provisions — as well as enhanced subsides in the Affordable Care Act — provide a capstone to her decades-long focus on children and universal healthcare. She rebuffed questions about her own political future on Friday morning, saying the day was not about her.
Other major pieces of the bill include a one-year extension of the monthly child tax credit, which the White House estimates would reach the parents of 90% of children in America. It would provide health coverage to low-income people in states that did not expand Medicaid under Obamacare, closing the so-called Medicaid coverage gap.
The bill also attempts to address homelessness by funding repairs to public housing and helping low-income people afford housing, although large cities with major public housing projects are more likely to benefit than a low-density public housing state like California.
Much of the bill would be funded through a higher tax on Americans who make more than $400,000 a year, plus an additional 5% tax for those making more than $10 million — a policy the White House estimates would apply to 0.02% of Americans. Large corporations would face a new 15% minimum tax on the profits they report to shareholders.
The Congressional Budget Office, which provides nonpartisan economic analyses for Congress, said the bill would add $160 billion to the deficit over a decade.
The White House has encouraged Democrats to use its own estimate of the savings from a new Internal Revenue Service policy, which the administration says would generate $400 billion in revenue, rather than the CBO’s $207-billion estimate. Under the White House estimate, the bill would reduce the deficit.
The IRS provision — the agency will get $80 billion over the decade to beef up enforcement of tax evasion — is controversial in more ways than one. Republicans predict that conservative groups and ordinary people will be more likely to have their taxes audited under the policy.
Democrats plan to pass the social spending bill through the Senate using a fast-track legislative process that prevents a GOP filibuster. But the process, called reconciliation, requires that all provisions adhere to Senate rules requiring that all provisions relate to the budget. The process of reviewing the bill for violations could result in more cuts or rewrites.
Democrats quickly found that even without Republicans, crafting the social spending bill was difficult and time-consuming. Disagreements between centrists and progressives bogged down the negotiations. Sinema and Manchin, who voiced concerns about the cost and expansiveness of the plan, became frequent guests at the White House to negotiate with Biden or his staff.
In a 50-50 split Senate, Democrats need every vote to pass the measure, giving Manchin and Sinema extraordinary leverage. Progressives faced pressure to give up many of their long-sought priorities or risk passing nothing at all.
Sinema objected to rolling back President Trump’s cut in the corporate tax rate and allowing Medicare to negotiate a full slate of drug prices.
Tuition-free community college fell by the wayside as the overall price tag was forced to come down.
Manchin rejected the Clean Electricity Performance Program, which would have encouraged utilities to increase their use of renewable energy through a combination of payments and fines.
The climate provisions that remain would invest about $500 billion into tax incentives and grants that would attempt to move the country away from fossil fuels. While supporters they say it is the most ambitious climate policy ever enacted, it has few competitors, and is far less expansive than they had originally envisioned.
In a comparison that causes unease among some moderates and fiscal hawks, many Democrats have likened the bill’s expansive scope and funding to legislation from the New Deal era.
Majority Leader Steny H. Hoyer (D-Md.) called the measure “an extraordinary investment, as the president says, a ‘generation-changing’ investment in the lives of average working men and women in this country, and their access to healthcare, their access to education and access to opportunity.”
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