Sen. Jon Tester (D-Mont.) participates in a Senate Banking Committee hearing on the economy, at the Dirksen Senate Office Building on February 17, 2022, in Washington.
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In the House, some centrist Democrats are advising that voters have less of an appetite for the tax increases the chamber passed in the previous version of the party-line bill last year. One moderate leader, Rep. Josh Gottheimer (D-N.J.), has privately suggested the final deal should have no new taxes at all, though it’s unclear how far he or others would go to derail a major party priority.
Though tax increases on high-income Americans and big companies poll well, Republicans are eager to disregard that nuance and cast Democrats as broadly raising taxes amid inflation as well as a possible recession. The GOP plans to hammer any tax increases the Democrats include in their bill ahead of November’s midterms.
“This is the worst time for the Democrats to try to raise taxes. Period,” said Wyoming’s John Barrasso, the No. 3 Senate Republican, who called Democrats’ proposals “radical.”
In reality, what Democrats are discussing now falls far short of their hopes to reverse the 2017 Trump tax cuts or impose a wealth tax.
Sen. Gary Peters (D-Mich.), who chairs the Senate Democrats’ campaign arm, said the Medicare tax proposal is “something we should do” and that Democrats need to adhere to President Joe Biden’s pledge not to raise taxes on anyone earning more than $400,000.
Yet he too said he was unsure if tax increases on large corporations and millionaires might ultimately be included in the party-line package: “It’s worth considering. I don’t know if they’ll make it in this bill. We’ll see what happens. Clearly, people need to pay their fair share.”
Senate Democrats need all 50 of their caucus members to support any party-line proposal using the protections of so-called budget reconciliation, which lets a bill evade a filibuster but imposes strict rules on what the legislation can include. In the House, Speaker Nancy Pelosi can afford to lose only four votes on any Democratic-only bill.
And plenty of battleground House Democrats say they’re still ready to bet that soaking the rich remains popular back home if a bill comes before them.
“To say they’re popular would be a gross understatement,” said Rep. Tom Malinowski (D-N.J), offering a stark contrast to the tax hike worries of Gottheimer and Rep. Mikie Sherrill, his fellow Garden Staters. “I’ve never met a Trump supporter in my district who believes that Amazon should pay no taxes. The idea of making Amazon pay taxes while lowering the cost of prescription drugs takes it from like 97 to like 99 percent [approval].”
Others say that Manchin’s own methodical approach to shaping the bill — with his hyper-focus on inflation and targeted tax approach — helps them sell their own voters.
“Mr. Manchin has been very vocal about corporations paying their share, and I think that’s something that resonates significantly in my district,” said centrist Rep. Elissa Slotkin (D-Mich.).
Yet Manchin hasn’t agreed to anything firm so far. Asked about the proposal to raise taxes for Medicare solvency, he said that needs to be “scrubbed” along with everything else in the bill to make sure it doesn’t exacerbate inflation.
Underpinning the party’s hand-wringing over new taxes is how to talk about the bill, period. Democrats insist that they can outmaneuver any Republican attack ads — but they need a cogent argument of their own.
“It’s easy to just rail against taxes and not even stick to the truth,” said Michigan Rep. Dan Kildee, a swing-district Democrat who also sits on the House tax-writing panel. “If we are explaining what we’re talking about — people who are at the very top of the economy paying their fair share — that’s not a hard argument.”
Another unsolved strategic decision is what to even call the party-line bill. “Build Back Better” has been tossed overboard, but Democrats haven’t settled on an alternative. Instead, Democrats have taken to calling it “the reconciliation bill” internally, a reference to the complex budget procedure used to pass it.
Sen. Elizabeth Warren (D-Mass.) said calling the proposal “reconciliation” makes the bill sound like “some bad romance novel.” She’d be willing to call it the Joe Manchin Deficit Reduction Act, she quipped, “if that’s what it takes to get it done.”
Sen. Elizabeth Warren (D-Mass.) attends a Senate Armed Services hearing on Capitol Hill March 15, 2022, in Washington.