The White House conceded Wednesday that raising taxes on corporations, the wealthy and capital gains may be off the table for the massive social spending bill, as Sen. Kyrsten Sinema came out against raising rates — sending Democrats scrambling to find new ways to pay for their massive social spending plan.
“There is an expansive menu of options for how to finance the president’s plan to ensure our economy delivers for hardworking families, and none of them are off the table,” White House spokesperson Andrew Bates said.
Sinema (D-Ariz.) and Sen. Joe Manchin (D-WV) have previously expressed opposition to the proposed $3.5 trillion in spending laid out in a budget resolution passed by Congress in August. However, while Manchin has been vocal about his issues with the legislation, Sinema has kept publicly silent about her gripes as she negotiates directly with President Biden about what stays in the bill and what is left out.
Far-left lawmakers have claimed that the social safety net programs created by the bill would be entirely paid for by the tax increases, as well as other mechanisms like levies on companies’ foreign earnings and stepped-up enforcement by the Internal Revenue Service. But with the Senate split 50-50, Democrats must ensure all their members — including Manchin and Sinema — support the final form of the spending plan.
“This is a guessing game with Senator Sinema,” Rep. Veronica Escobar (D-Texas) told Politico Wednesday. “Yeah, we’re all supposed to be on the same team. And that means transparency, communication and collaboration. Without it, it makes this significantly more challenging.”
“I don’t know what the red lines are for one US senator who has an amazing amount of power,” Escobar added.
House Ways and Means Committee Chairman Richard Neal (D-Mass.) similarly expressed frustration Wednesday, telling CNN: “One of the most difficult issues here remains [that] we have still never seen a topline from the Senate. What’s the number?”
Manchin, for his part, has expressed support for raising taxes. However, a July memorandum he circulated among his colleagues indicates he does not want the corporate tax rate to go higher than 25 percent from its current 21 percent rate. The White House has endorsed a rate hike to 28 percent.
In the same document, Manchin said his topline figure for the spending plan was $1.5 trillion — an ask he said he had notified Sinema about.
At a meeting with progressive House members at the White House Tuesday, Biden reportedly suggested the overall figure could be between $1.75 trillion and $1.9 trillion — down from the $1.9 trillion to $2.2 trillion he had quoted weeks earlier.
“The president knows that he’s not going to get everything he wants in this package,” White House press secretary Jen Psaki told reporters on Air Force One Wednesday. “Nor will any member of Congress, probably, and that’s what compromise is all about.”
If a tax rate hike is not included in the proposal, the Wall Street Journal reported, Democrats could sub in a number of alternatives — including limits on tax deductions for business and decreasing the amount exempt from estate and gift taxes.
However, it’s unclear whether a social spending bill that does not raise tax rates would win enough Democratic votes to pass the House, where Speaker Nancy Pelosi (D-Calif.) can only afford to have three members of her conference vote against any legislation before it fails.
Pelosi has also set an Oct. 31 deadline for the House to pass a bipartisan $1.2 trillion infrastructure bill, which Manchin and Sinema played a key role in negotiating. House progressives have said they will vote against that bill if the social spending bill does not pass the House and Senate first.
Sinema’s office declined a request for comment.
