House Democrats on Wednesday unleashed legislation that would enact President Joe Biden’s expansive social spending vision after months of negotiating, seeking support from the entire caucus by Thursday.
Answering major questions about what can ultimately win support from the party’s warring factions, the new package includes compromises on issues like lowering prescription drug costs and the federal write-off for state and local taxes. Democratic leaders are hoping to enact at least $1.75 trillion in promises before Thanksgiving. But the package still faces an uphill battle in the Senate.
Key holdouts across the Capitol are expected to raise objections to pieces of the House text. At the same time, the Senate parliamentarian will comb through every line in the bill, likely jettisoning crucial elements — from paid leave to immigration protections — after vetting it to comply with the rules of the special budget process Democrats are using to steer past a GOP filibuster.
Before the Senate can pass the bill, the upper chamber must also push through the so-called “vote-a-rama,” an all-night amendment voting marathon. Republicans are sure to force difficult votes that could change the bill and potentially threaten the Democratic Party’s already-tenuous unity.
New Jersey new car dealers will be interested in many of the key provisions in the bill as currently crafted, including:
What’s in it: A higher cap on the so-called SALT deduction. Taxpayers would be able to write off up to $72,500 of what they pay in state and local taxes, a much heftier perk than the $10,000 limit Republicans set under their 2017 tax overhaul. That new cap would be in place for a decade.
Potential pitfalls: Progressive Democrats, including Sanders, have balked at changes to the SALT deduction limit, complaining that the write-off disproportionately benefits wealthier taxpayers. Sanders and Sen. Bob Menendez (D-N.J.) are working on a separate proposal that would apply a deduction cap only to taxpayers making more than $400,000 a year. As of Wednesday night, they were still working out the details.
What’s in it: A surtax on individual income above $10 million a year, a 15 percent minimum tax on corporations that report at least $1 billion in profits and a tax on stock buybacks. Those key tax increases were included in the framework the White House unveiled last week. And House Democrats have added more, including a tax on nicotine and new limits on retirement accounts of the wealthiest taxpayers.
Potential pitfalls: The White House has predicted the core tax plans would bring in close to $2 trillion in new revenue. But it’s unclear when Congress will see official estimates from its nonpartisan scorekeepers. Lower revenue forecasts could help justify tweaks from Democratic senators who have already been saying they would love the opportunity to fiddle with the House’s work. Democrats have struggled to unify around ways to drum up money to pay for Biden’s plans, with progressives seeking more aggressive ways to tax the wealthy. Some of those ideas, like the corporate minimum tax, have passed with muster with their centrist colleagues. Others have not, including a yearly tax on the gains in assets held by the highest earners.
Electric Vehicle Tax incentives
What’s in it: Consumers would get up to $12,500 in credits for buying electric vehicles made in union shops, a nod toward labor that has drawn criticism from automakers like Toyota and Tesla, whose workers are not unionized.
Potential pitfalls: Dealer advocates and southern state legislators with non-union auto manufacturing facilities have raised vocal opposition to a multi-tiered EV incentive program that discriminates and complicates EV sales initiatives.
What’s in it: $40 billion on job training programs, a big cut from the $100 billion the White House first floated.
Potential pitfalls: Some employment experts warn that $40B might not be enough to get U.S. workers into high-demand careers that pay living wages and fill labor shortages.