Biden Steps Up Efforts to Advance $3.5 Trillion Spending Bill

Biden Steps Up Efforts to Advance $3.5 Trillion Spending Bill

The president met with two centrist senators and defended his plans to increase taxes on high-income households and U.S. companies

WASHINGTON—President Biden is taking a more public role in the negotiations around Democrats’ roughly $3.5 trillion social welfare and climate bill, as lawmakers work through thorny policy debates.

At the White House Thursday, he touted proposals to increase taxes on high-income households and U.S. companies to finance the plan, saying, “Big corporations and the super wealthy have to start paying their fair share of taxes.”

The president held a call Thursday with House Speaker Nancy Pelosi (D., Calif.) and Senate Majority Leader Chuck Schumer (D., N.Y.). A day earlier, he held private meetings with Sens. Joe Manchin (D., W.Va.) and Kyrsten Sinema (D., Ariz.), two moderates with concerns about the package and whose support will be crucial for the legislation’s passage.

The president’s engagement comes as Democratic lawmakers hash out details of the sprawling package, with disputes flaring between moderate and liberal members over issues like drug pricing, climate proposals, tax provisions and the overall price tag. The House version of the bill moved through its committees this week, while Senate Democrats are still working on their proposals, which will require the support of the entire caucus to advance in the 50-50 Senate. All Republicans are expected to oppose the legislation.

During his remarks Thursday, Mr. Biden said there was a “long way to go” but expressed confidence that the social welfare bill and a separate, bipartisan infrastructure bill will reach his desk. The White House said following the call with Democratic leaders that the three are in regular touch, and White House press secretary Jen Psaki said the president is going to be very engaged with lawmakers and leadership to move his agenda forward.

Lawmakers acknowledged this week that they still had work to do in resolving differences between the Senate, where centrists are pushing to lower the overall price tag, and the House. The bills voted on in the House total about $4.5 trillion in spending and tax cuts, according to congressional aides familiar with cost estimates, far higher than the price tag in the Senate. Senate Democrats had previously settled on roughly $3.5 trillion as the target cost, down from about $6 trillion sought by progressives.

“There’s lots of overlap among some of the major committees,” Sen. Chris Van Hollen (D., Md.) said of the two chambers. “There’s some big differences too, so we’re going to have to work through those going forward.”

A White House official said the administration expects the reconciliation negotiations to be messy, and that the administration will be engaged on the Hill but will try to stay out of the fray as Democrats work out the legislative language. Another official said the president’s meetings with Mr. Manchin and Ms. Sinema were productive and that Mr. Biden is in touch with a range of members, as he seeks to advance the agenda.

Mr. Manchin has said he wants to spend between roughly $1 trillion and $1.5 trillion and has expressed concern about ending fossil fuel subsidies and raising the corporate tax rate to levels he views as too high. Senate Budget Committee Chairman Bernie Sanders (I., Vt.) has said he doesn’t want the overall price tag to go below $3.5 trillion, calling it popular with the public.

Because Democrats cannot afford to lose a single vote from their own caucus in the evenly split Senate, the overall spending level will likely come down, if moderates don’t change their position. White House chief of staff Ron Klain, in an interview at a hedge fund conference this week, suggested that the administration might be open to negotiating a narrower version of the $3.5 trillion proposal, in terms of the size and duration of specific provisions.

“The important thing is to make sure we meet the moment on the key items. Maybe they have to be cut down in size—maybe. Maybe they have to be shortened in duration—maybe,” Mr. Klain said in an interview taped Monday and aired by the conference Wednesday. “I’m not going to sit here and negotiate it out at the SALT conference. This is what we’re going to do here over the next few weeks with members of the House and Senate.”

Mr. Klain said the administration views the proposal “as an investment not just in people and social spending but in economic growth, job creation and doing the things we need to do to really build long-term growth.”

On drug prices, a trio of House Democrats on the Energy and Commerce Committee voted Wednesday against a provision that would allow Medicare to broadly negotiate for lower drug prices. That move sparked outrage among liberal Democrats, with Mr. Sanders saying there was “no excuse” for not supporting it. The provision later passed through another committee, but the scuffle underscored Democrats’ divisions on the issue.

Meanwhile, Democrats will also have to resolve internal disputes over some of the ways they hope to raise revenue to offset the package’s cost, including contentious proposals on international corporate taxes and capital gains. On Wednesday, Rep. Stephanie Murphy (D., Fla.) voted against the House Ways and Means Committee’s section of the bill. That section would raise the top corporate tax rate to 26.5% from 21%, impose a 3-percentage-point surtax on people making over $5 million and increase capital-gains taxes, among other provisions.

By Catherine Lucey and Kristina Peterson
—Ken Thomas contributed to this article.