Democrats may end up nixing a plan to hike taxes in order to pay for a massive social welfare spending package.
Speaker Nancy Pelosi, a California Democrat, acknowledged Thursday that party lawmakers may not include tax increases on corporations and the wealthy in legislation they hope to pass in the coming weeks that would provide a broad array of new government social welfare programs and subsidies.
Two key centrist Democrats in the Senate oppose the plan to hike taxes or the level of tax hikes proposed in the legislation. This has forced party negotiators and the White House to consider a bill that does not hike taxes, Pelosi said.
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“That’s one of the options,” Pelosi told reporters who asked about nixing the tax hikes.
Pelosi told reporters Democrats have been working to narrow the size and cost of the bill and plan to find a way to pay for the final package, but it’s not clear how they’ll find the money.
Opposition to the tax increases, namely by Senate Democrat Kyrsten Sinema of Arizona, has forced the party to look for ways to pay for the bill without raising taxes.
Senate Democrats control only 50 votes, which means every party lawmaker, including Manchin and Sinema, must vote for the bill for it to pass with the tiebreaking authority of Vice President Kamala Harris.
Democrats must shrink the bill from an initial cost of $3.5 trillion to a package with a price tag of less than $2 trillion in order to appease Manchin and Sinema.
A House-authored package had proposed hiking corporate taxes from 21% to 26.5% and raising capital gains and other taxes on upper-income earners, which would have paid for nearly $3 trillion of the initial $3.5 trillion proposal.
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Sinema, however, is opposed to raising taxes, and fellow Senate Democrat Joe Manchin of West Virginia said corporate taxes should not be raised any higher than 25%.
“We’ll see what survive — uh, prevails,” Pelosi told reporters. “But my preference is to follow the cooperation that the Senate and House come to.”
