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Politics: Democrats face tough choices over major economic package in pivotal week ahead

Slow progress on budget package with deadline weeks away

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WASHINGTON — Democrats are facing agonizing choices over what to keep and what to drop from their expansive .5 trillion social safety net package , as they labor to pacify the most conservative lawmakers in their ranks who have balked at its cost and scope. With moderates and liberals feuding over competing priorities, Democrats have a variety of options for cutting the package down to size, from jettisoning proposed programs outright to curtailing them or using gimmicks to control their cost. But they have little room for error given their slim majorities in Congress, where they need the

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With a debt limit crisis averted for now, the Democratic Party's effort to finalize a sweeping economic package to expand the social safety net will be front-and-center on Capitol Hill this week.

WASHINGTON, DC - JUNE 23: (L-R) U.S. Speaker of the House Nancy Pelosi (D-CA) and U.S. Senate Majority Leader Chuck Schumer (D-NY) emerge from the Speakers office after a bipartisan group of Senators and White House officials came to an agreement over the Biden administrations proposed infrastructure plan at the U.S. Capitol on June 23, 2021 in Washington, DC. After initial negotiations between the White House and Senate Republicans fell through a new bipartisan group of Senators came together with the hopes of reaching a deal for a much need infrastructure spending plan. (Photo by Samuel Corum/Getty Images) © Samuel Corum/Getty Images WASHINGTON, DC - JUNE 23: (L-R) U.S. Speaker of the House Nancy Pelosi (D-CA) and U.S. Senate Majority Leader Chuck Schumer (D-NY) emerge from the Speakers office after a bipartisan group of Senators and White House officials came to an agreement over the Biden administrations proposed infrastructure plan at the U.S. Capitol on June 23, 2021 in Washington, DC. After initial negotiations between the White House and Senate Republicans fell through a new bipartisan group of Senators came together with the hopes of reaching a deal for a much need infrastructure spending plan. (Photo by Samuel Corum/Getty Images)

Democrats must make a series of hard decisions over how much they are willing to spend on the package and what will be included, a challenge made more difficult amid persistent and stark divisions between progressives and moderates. If the party can't reach consensus, a key pillar of President Joe Biden's domestic agenda is at risk of falling apart.

Internal battles heat up over Biden agenda

  Internal battles heat up over Biden agenda Democrats are plotting their next moves on a massive social spending package that advances much of President Biden's economic agenda, but they'll also have to resolve several internal battles that are starting to heat up.Congressional Democrats are refocusing their attention on the so-called human infrastructure proposal now that Senate passage of a short-term debt limit bill is in the rearview mirror. Lawmakers say the debt limit deal that resulted in a Senate vote on Thursday night clears the way for Democrats to devote their time to the spending package.

Senate Democrats returned to Washington on Monday suggesting they were far away from reaching a deal on a .5 trillion economic package , raising fresh questions about whether all 50 members of their caucus can quickly unite behind the centerpiece of President Joe Biden's agenda amid sharp divisions over the scope of the plan and ambitious timetable for considering it. The hard choices ahead will force Democrats to grapple with how much of Biden's ambitious agenda on paid family leave, expanded health care, free Pre-K and community college, will be enacted.

It’s a busy week ahead on the economic calendar. Industrial production, fixed asset investment, and retail sales figures for September will be in focus early in the week . 3 rd quarter GDP numbers, also due out on Monday, however, will be key for the global financial markets. (Bloomberg) -- U.S. Treasuries are on the cusp of a major shift in the supply-demand dynamic that’s shaped the market for more than a year, potentially heralding opportunities for traders lamenting an extended stretch of limited volatility.

Also at risk is a separate $1.2 trillion bipartisan infrastructure bill. Top Democrats have pushed for the bipartisan bill to pass out of the House before the end of the month, but its fate is intertwined with the larger economic package and that time frame looks likely to slip.

Congressional Democratic leaders now have the difficult task of attempting to steer their members toward compromise as they warn that some priorities may not make it into a final deal.

Senate Majority Leader Chuck Schumer wrote in a letter to the Senate Democratic caucus on Thursday, "To pass meaningful legislation, we must put aside our differences and find the common ground within our party. As with any bill of such historic proportions, not every member will get everything he or she wants."

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  Kids could be the budget bill's big winners -- or losers President Joe Biden and congressional Democrats are poised to channel historic investments into programs for kids -- if they can navigate around competing demands, particularly from programs for seniors, as they slim down the massive public investment and social safety net bill now under intense negotiation on Capitol Hill. © Andrew Caballero-Reynolds/AFP/Getty Images The US Capitol at dusk in Washington on October 1, 2021.

Senate Democrats approved a .5 trillion budget resolution, setting the stage in the weeks and months to come for the party to craft and attempt to pass a sweeping economic package expanding the social safety net that President Joe Biden has made a signature agenda item without the threat of a filibuster from Republicans who oppose it.

President Joe Biden laughed off a suggestion that he invite senators Bernie Sanders and Joe Manchin to the White House to 'hash it out' as the pair feud over the infrastructure plan. 'The .5trillion Build Back Better bill, supported by President Biden and almost all Democrats in Congress, is an unprecedented effort to finally address the long-neglected crises facing working families and demand that the wealthiest people and largest corporations in the country start paying their fair share of taxes,' Sanders wrote.

The timeline

At the end of last month, House Democratic leaders punted on a vote on the infrastructure bill amid a progressive revolt. Progressives have long made clear they do not want to move forward with the bipartisan bill without a vote on the larger economic package. The progressive bloc does not want to lose leverage to negotiate over the social safety net legislation with moderates intent on getting the bipartisan infrastructure bill signed into law.

After it became clear the infrastructure bill would not pass out of the House in September, Pelosi outlined an end of October deadline for the effort, saying earlier this month in a letter to Democrats that the bipartisan bill "must pass" prior to October 31.

Schumer also outlined an October timeline in his letter to the Senate Democratic caucus as he noted the challenges of pursuing a dual track strategy to enact both legislative priorities.

Free community college, child tax credits, and affordable housing are among safety net measures on the chopping block as Democrats struggle to find middle ground with centrist holdouts

  Free community college, child tax credits, and affordable housing are among safety net measures on the chopping block as Democrats struggle to find middle ground with centrist holdouts Democrats are fuming at harsh cuts Manchin and Sinema want in Biden's social spending bill. Some are floating another Democratic-only bill next year.Pelosi is bracing lawmakers for the massive cuts required to assemble a spending package capable of clearing their threadbare majorities in the House and Senate, garnering the votes of a small centrist faction made up of figures like Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona.

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"I have said from the beginning that the execution of the two-track legislative strategy for the Bipartisan Infrastructure bill and the Build Back Better Act would be difficult," he wrote.

"At the end of the day, we will pass legislation that will dramatically improve the lives of the American people. And we must aim to do that in the month of October," he added.

If work on the economic package spills past the end of October, Democrats could still get it done at a later date in November or December. But it won't be long until Congress must once again confront other pressing matters.

The debt limit and government funding to avert a shutdown have both been extended on a short-term basis into early December, setting up another looming fiscal crisis that will undoubtedly take up much of lawmakers' time and energy in the weeks ahead.

The price tag and the details

Two major sticking points for Democrats looking to lock down a deal on the economic package are what the overarching price tag should be and what will be included.

Progressives have pushed for a price tag of $3.5 trillion, but key moderate Democratic senators, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, have both indicated they will not support that.

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Party leaders have now made clear that the price tag will have to be scaled back to reach a deal.

Biden said during a meeting with a group of House progressives earlier in the month that the top line of the social safety net package needs to come down to somewhere between $1.9 trillion and $2.2 trillion.

As of now, however, Democrats have still not reached a consensus on the overall cost of the package.

On a call with a small group of fellow Democrats last week, neither Sinema nor Manchin endorsed the $1.9 trillion - $2.2 trillion price tag that Biden has privately floated, saying they have yet to see details from the White House on such a proposal -- even as progressives have indicated that figure is too small for the package.

A scaled back price tag means Democrats must decide how to structure the scope of the bill and has set off a debate over whether they will cut certain policy items or implement an array of programs within a more limited time horizon instead.

Progressives are making clear that they don't want to see major cuts.

"If given a choice between legislating narrowly or broadly, we strongly encourage you to choose the latter, and make robust investments over a shorter window," members of the Congressional Progressive Caucus leadership wrote in a letter to Pelosi.

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What's on the chopping block?

The stakes are extremely high for Democrats given how many key liberal priorities they have been hoping to pack into the economic package and the fact that the package represents an opportunity to deliver on long-standing promises to voters. The legislation has been envisioned as broadly addressing a wide-range of issues, including health care, aid to families and climate change.

"How do you pit child care against paid leave? How do you pit pre-K against housing? How do you pit climate change against any of those things?" Rep. Pramila Jayapal of Washington, the Congressional Progressive Caucus chair, said in a recent interview on CNN's "Newsroom."

"We would be willing to cut down the years a little bit, but we do need to have all of those priorities in the bill," she added.

Climate policy in particular seems like it could be on the chopping block, after three congressional sources told CNN on Friday evening that the Clean Electricity Performance Program, the cornerstone climate policy in Democrats social safety net package, will likely be dropped from the final deal after pushback from Manchin.

"He is not there on the CEPP period. We've been trying," one Democratic aide with knowledge of the negotiations told CNN. The aide told CNN late last week that Democrats are trying to find ways to restructure the program to fit Manchin's concerns while still reducing greenhouse gas emissions.

Manchin spokeswoman Sam Runyon told CNN in a statement Friday that the senator "has clearly expressed his concerns about using tax payer dollars to pay private companies to do things they're already doing. He continues to support efforts to combat climate change while protecting American energy independence and ensuring our energy reliability."

Jayapal on Saturday denied that Manchin tanked the climate provisions in Biden's larger economic bill, saying that "there's no decisions that have been made, the negotiations are continuing."

Biden can’t afford to repeat Obama’s mistakes on climate policy .
It’s not too late for Democrats to go big on climate change. But it won’t be easy, and there’s no margin for error.One of the most impactful climate policies that Congress has ever considered, the clean electricity payment program (CEPP), is on the chopping block. Sen. Joe Manchin (D-WV) says he will not support a bill that penalizes coal and natural gas for the outsized role they play in US pollution. Democrats can’t pass their budget bill, the Build Back Better Act, without his support, and its size and scope has been shrinking.

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