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PRESENTED BY

BY JOHN BRESNAHAN, ANNA PALMER AND JAKE SHERMAN
WITH MAX COHEN AND CHRISTIAN HALL

THE TOP

Happy Wednesday. 

Let’s be blunt. Democrats aren’t close to a framework agreement on their massive reconciliation package. 

We’ve heard President Joe Biden, Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer talk about great progress, but our reporting and the available public evidence doesn’t match these sunny claims. 

Biden hoped to have that framework deal in place before he leaves for Rome on Thursday. But without a big turnaround in the next 24 hours, that’s not going to happen.

This also calls into question whether Pelosi and House Democratic leaders can pass the long-delayed $1 trillion bipartisan infrastructure deal by their Oct. 31 deadline. The White House badly wants to clear the public works bill, as do moderate House Democrats. However, without the framework agreement, we’re pretty sure it won’t pass. Pelosi says it should, progressives say they’ll continue to block it as they await a social spending deal. Another short-term patch to surface transportation funding could be necessary. We’ve asked administration sources if the president would press for an infrastructure vote without a framework agreement, and they think it would be foolhardy.

Yet even as Democrats struggle to find consensus on the social spending bill, a path to a deal on both the framework and the broader reconciliation package is slowly emerging.

Progressives got a major boost Tuesday night when reports indicated the White House would include between $500 billion and $550 billion for climate-related provisions in the reconciliation package. Progressives need some victories because many of their favored provisions — free community college, for instance — have been dropped or scaled back.

But it’s also true that after six weeks of pretty steady negotiations, Democrats haven’t come to agreement on the topline cost of the package, what’s in the legislation or how to pay for it.

Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.), not the Democratic leadership or the White House, have been calling the shots on the direction of the talks. Individual senators and members have even taken to negotiating directly with Sinemanchin in order to win their support — or overcome their opposition — to provisions in the package. While this role for Manchin and Sinema has generated enormous outrage on the left, Biden has been forced to acknowledge that in a 50-50 Senate, each senator “is a president. Every single one. So you got to work things out.”

Biden had Sinema and Manchin down to the White House again on Tuesday night, and we expect a full-court press by White House officials and party leaders for a framework agreement today. Biden has a pretty light official schedule.

So let’s review the evidence, and we’re confident you’ll come to the conclusion we did: that they are struggling mightily. Caveat: When this turns around, it’ll turn around quickly. But at the moment, yikes.

→ No one has made a decision about how to pay for the legislation. House and Senate Democrats have embraced dramatically different approaches to this issue, and it’s not clear yet how this is going to be resolved. The Senate traditionally wins the kinds of showdowns, especially a 50-50 Senate.

Senate Finance Committee Chair Ron Wyden (D-Ore.) unveiled a “billionaire income tax” proposal early this morning. According to Wyden, his plan “would ensure billionaires pay tax every year, just like working Americans. No working person in America thinks it’s right that they pay their taxes and billionaires don’t.”

The long-awaited 107-page proposal would impact roughly 700 Americans, and it would generate roughly $300 billion in revenue. The tax would only apply to Americans with more than $1 billion in assets or more than $100 million in income for three straight years.The Joint Committee on Taxation hasn’t scored the legislation yet, according to the Finance Committee.

It works like this: “Tradable assets,” such as stocks, would be “marked to market” annually, and the affected taxpayers (the “billionaires”) would pay tax on their gains or take deductions for losses.

Here’s where it gets complex. “Non-tradable assets” such as real estate or “business interests” wouldn’t be taxed annually, but the capital gains tax plus an interest charge (known as a “deferral recapture amount”) would be due when they’re sold. Wyden envisions a transition period to adjust to the new system, and there’s a provision to allow affected taxpayers to “treat up to $1 billion of tradable stock in a single corporation as a non-tradable asset” so they don’t lose control of their companies. There are also rules designed to ensure taxpayers can’t avoid the tax.

But Axios’ Hans Nichols reports that Manchin may not even support it, so that could be a massive hangup for Wyden. 

Additionally, Rep. Richie Neal of Massachusetts, the House Ways and Means Committee chair, keeps publicly questioning whether the approach will work. Pelosi says she’ll wait to see whether it’s viable.

Wyden, along with Sens. Elizabeth Warren (D-Mass.) and Angus King (I-Maine) also released a 15 percent corporate minimum tax proposal on Tuesday evening. The trio said the Joint Tax Committee had estimated it could raise up to $300 billion to $400 billion over a decade, but no formal scoring was issued.

→ Medicare prescription drug negotiations? This is also an area of massive confusion. Sen. Bernie Sanders (I-Vt.) says it has to be included, as do Wyden and House progressives. But a handful of House moderates have joined with a group of Senate Democrats — some with drug company operations in their districts or home states — to object to the proposal. PhRMA and other industry groups have spent heavily on advocacy campaigns to derail the effort, asserting it will hamper the discovery of new drugs and treatments.

Right now, the plan is to allow Medicare to negotiate on a small number of drugs. But even that’s still up in the air.

→ Expanding Medicare? Manchin has been a no, Sanders has been a hell yes. Progressives want Medicare to cover dental, vision and hearing programs. But these initiatives are expensive, especially dental, and there’s been resistance from dental care provider groups. Biden has floated a $800 voucher for dental work, but again, this issue is still under negotiation. Right now, Medicare expansion is in the bill, we’re told, although that could change.

→ Paid family leave? Biden initially proposed 12 weeks of paid family leave. That was trimmed to four weeks. But Manchin had concerns. So now he’s negotiating on the issue with Sen. Kirsten Gillibrand (D-N.Y.).

→ How about closing the Medicaid gap? No decision there. This is a major priority for many House and Senate Democrats who want to provide coverage to eligible Americans in red states that didn’t sign up for Medicaid expansion under Obamacare. But Manchin is concerned about the cost and the “fairness.” House Majority Whip James Clyburn (D-S.C.) has been lobbying Manchin personally on the topic.

→ Immigration? This has been a problem for Democratic leaders ever since the Senate parliamentarian ruled last month that immigration-related provisions couldn’t be included in the reconciliation package. Senate Majority Whip Dick Durbin and Sen. Robert Menendez (D-N.J.) have been working to try to overcome the parliamentarian’s objections. They’re currently on “Plan C,” but no luck yet. Pro-immigration advocates have been demanding Democrats overrule the parliamentarian, but it’s not at all guaranteed that Democrats could come up with the votes to do that.

→ SALT? Progressives hate reversing the SALT caps. Northeastern Democrats and lawmakers from high-tax blue states love it. But the cost of repeal is exorbitant, so we’re hearing there will only be two-year repeal.

→ We have no idea whether the IRS bank monitoring provisions will be included. Manchin doesn’t like it, neither does Sen. Jon Ossoff (D-Ga.), but House Democrats are still pushing for it.

→ Manchin himself is publicly doubting his place in the Democratic Party. Read our friend Mike DeBonis and John Wagner of the Washington Post. Emily Cochrane has this great Congressional Memo in the NYT today: “Manchin Is in the Middle, With Biden’s Agenda in the Balance.”

So, you can decide for yourself. Does this sound like they are close?

THE SPEAKER

Pelosi tries to boost McAuliffe in Virginia

Speaker Nancy Pelosi raised nearly $800,000 Tuesday night for Virginia Democratic gubernatorial candidate Terry McAuliffe at a fundraiser at Erin and Kent Collier’s home in Washington. Seventy-five people attended the fundraiser, which was McAuliffe’s last money event of the campaign. Pelosi also donated $100,000 from her reelection campaign to Virginia House Speaker Eileen Filler-Corn. 

Pelosi’s campaign has contributed $250,000 to McAuliffe and raised $650,000 for him in October. She raised $175,000 for the former governor in April.

This is a quite timely ad by the National Republican Congressional Committee. They’re running this spot in 15 districts around the country. It’s aimed at Democrats’ plan to have the IRS monitor Americans’ bank accounts. This provision has been the subject of much confusion and waffling among Democrats on Capitol Hill. 

The NRCC polled this question in its recent battleground survey. “Would you be more or less likely to support a Democrat who supports a proposal that would allow the IRS to monitor your bank accounts to make sure you are paying enough taxes?” Fifty-seven percent of voters said they’d be much less likely to support a Democrat who backed this.

Here’s one example of the ad in Arizona Democratic Rep. Tom O’Halleran’s district. It’s even Halloween themed.

These ads will run in districts represented by Rep. Katie Porter (Calif.), Jahana Hayes (Conn.), Stephanie Murphy (Fla.), Cindy Axne (Iowa), Marie Newman (Ill.), Jared Golden (Maine), Dan Kildee (Mich.), Chris Pappas (N.H.), Andy Kim (N.J.), Tom Malinowski (N.J.), Tom Suozzi (N.Y.), Antonio Delgado (N.Y.), Susan Wild (Pa.) and Kim Schrier (Wash.).

PARTISANSHIP

Republicans demand the resignation of the entire Biden administration

We listened to Sen. Josh Hawley (R-Mo.) call for the resignation of Attorney General Merrick Garland the other day over allegations that Garland improperly “mobilized” the FBI to investigate parents protesting at school board meetings. It’s a serious issue.

Yet we were also struck by the fact that in the nine months the administration has been in office, House and Senate Republicans have called for the resignation of a huge swath of Biden officials over various controversies and scandals, including the botched U.S. withdrawal from Afghanistan, the migrant crisis at the U.S.-Mexico border and vaccine mandates, among other high-profile issues.

This GOP resignation list includes President Joe Biden, Vice President Kamala Harris, Defense Secretary Lloyd Austin (a favorite target), Secretary of State Antony Blinken (also unpopular with Republicans), Garland, Joint Chiefs Chair Mark Milley, Homeland Security Secretary Alejandro Mayorkas, even Transportation Secretary Pete Buttigieg. Yeah, we were surprised by that last one too.

So thanks to our colleagues Christian Hall and Max Cohen, we were able to put some numbers on just how many lawmakers have joined in this resignation blitz. We’re only counting GOP senators and House members here.

→ President Joe Biden: 46 Republicans

→ Vice President Kamala Harris: 5 Republicans

→ Secretary of State Antony Blinken: 13 Republicans

→ Defense Secretary Lloyd Austin: 22 Republicans

→ Homeland Security Secretary Alejandro Mayorkas: 8 Republicans

→ Joint Chiefs Chair Gen. Mark Milley: 30 Republicans  

→ National Security Adviser Jake Sullivan: 2 Republicans

→ Attorney General Merrick Garland: 1 Republican

→ Transportation Secretary Pete Buttigieg: 1 Republican

→ Director of National Intelligence Avril Haines: 1 Republican

→ Special Climate Envoy John Kerry: 1 Republican

Some of the same Republicans who stood by twice impeached former President Donald Trump following the Jan. 6 insurrection at the Capitol are the most ardent voices in the push for Biden administration resignations. 

 Even Rep. Tom Rice (R-S.C.), who voted to impeach Trump over Jan. 6, called for Biden to leave office. “President Biden, you yourself said ‘The Buck stops here.’ Do the American people a favor. Resign and turn the job over to someone who can handle it,” Rice said on Twitter. 

Leading the way in their demand for resignations are Sen. Josh Hawley (R-Mo.) and Rep. Ronny Jackson (R-Texas). Both have called for six Biden officials to step down. And both have distanced themselves from the pack with unique demands (Hawley called for Garland to resign, Jackson called for Buttigieg to resign). 

House Freedom Caucus members also feature heavily in the lists of Republicans urging resignations. Sen. Marsha Blackburn (R-Tenn.) is also a notable figure in the effort to pressure administration officials out of their jobs.

FRONTS

MOMENTS

8:30 a.m.: President Joe Biden will participate in the East Asia Summit.

9:45 a.m.: Biden will get his daily intelligence briefing.

10:15 a.m.: CBC members will discuss their priorities for Build Back Better.

Noon: Republican senators will discuss energy prices.

1 p.m.: Jen Psaki will brief.

2:30 p.m.: The Covid-19 team will brief.

CLIP FILE

WaPo

→ “Jan. 6 committee expected to subpoena lawyer who advised Trump, Pence on how to overturn election,” by Jacqueline Alemany

→ “Biden makes a final push for McAuliffe, urging Virginia voters to show up against Youngkin — and Trump,” Teo Armus and Sean Sullivan 

→ “Stubborn supply chain woes are resisting Biden’s remedies,” by David J. Lynch

→ “Texas Gov. Greg Abbott signs bill banning transgender girls from participating in female sports in schools,” by Mariana Alfaro

WSJ

→ “Both Parties in ‘Total Agreement’ on Need to Toughen Judicial-Disclosure Law, GOP Lawmaker Says,” by Joe Palazzolo, James V. Grimaldi and Coulter Jones

Politico

→ “Herschel Walker gets McConnell’s blessing,” by Alex Isenstadt

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Editorial photos provided by Getty Images