U.S. Markets close in 41 mins

Democrats Race to Finalize a Scaled-Back Economic Plan

·2 min read
Reuters/Brendan McDermid

It’s crunch time for Democrats as they look to finalize their budget reconciliation bill with Sen. Joe Manchin (D-WV).

Democrats have made progress on the scaled-back bill in recent days, having submitted two major portions of the package for review by the Senate parliamentarian: a plan to lower prescription drug prices and a tax on high earners that would be used to extend the solvency of the Medicare trust fund by three years. The Congressional Budget Office on Friday said that the drug plan, which would allow Medicare to negotiate the prices of some medications, would cut the deficit by some $287 billion over 10 years.

Now Senate Majority Leader Chuck Schumer (D-NY) and Manchin must nail down the portions of the plan where agreement has proven more elusive.

Schumer and Manchin were reportedly set to meet again early this week, though the majority leader has now tested positive for Covid-19. “The Leader is fully vaccinated and double boosted, and has very mild symptoms,” Justin Goodman, a Schumer spokesperson, said in a statement Sunday evening. “Consistent with the CDC guidance, Leader Schumer will quarantine this week and work remotely.”

The Washington Post’s Tony Romm provides an update on where talks stand: “Plenty remains unresolved, including the fate of a key program that lowers insurance costs for millions of Americans, raising the prospect that the latest round of talks could collapse much as they did before. Adding to the challenge, Republicans have intensified their opposition in recent days, hoping to apply enough political pressure on Manchin that he walks away from the talks again.”

Closing in on climate provisions: Romm reports that Democrats have discussed limiting their proposed penalties on producers of methane gas to a smaller number of energy companies, as Manchin wants. Negotiators reportedly remain divided over proposals to pay the producers of clean energy and provide tax credits to people who buy electric vehicles, with Democratic leaders reportedly looking to scale back those plans as they push to finalize their climate provisions this week.

Trouble with Affordable Care Act tax credits: Increased subsidies for Affordable Care Act insurance plans provided under the 2021 Covid relief law are set to expire this year, potentially leaving some 13 million Americans facing higher premiums. Romm reports that Manchin has rejected Democrats’ initial plans to extend those tax credits “though the two sides have discussed paring back eligibility on the basis of income as a way to lower costs.”

Like what you're reading? Sign up for our free newsletter.