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PRESENTED BY

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

THE TOP

News: House Democrats are privately clashing with their Senate Democratic counterparts and the White House over hundreds of billions of dollars in new spending on health care programs included in the $3.5 trillion reconciliation package, according to multiple Democrats sources close to the talks. Several key House committees are slated to begin marking up the package tomorrow.

The intra-party dispute centers around permanently funding the Affordable Care Act — Obamacare — as well as potentially expanding both Medicare and Medicaid. The stakes of this fight, politically and substantively, are huge, as the reconciliation package is the centerpiece of the Democratic agenda heading in 2022. 

Sen. Bernie Sanders (I-Vt.) and his Senate colleagues — with backing from Majority Leader Chuck Schumer — want to add dental, vision and hearing coverage to Medicare, a hugely expensive proposition. House Democrats are pushing to expand Medicaid, as well as permanently fund Obamacare. They’re concerned about the cost of the new Medicare initiatives; for instance, the dental program alone would total nearly $400 billion and can’t be implemented for several years.

We got the sense something was amiss when “a source familiar with the White House thinking” reached out with this comment Tuesday about the proposal Ways and Means is crafting: “Negotiations are taking place between the administration, the House (including numerous committees) and the Senate. Ways & Means is doing strong and valuable work, but this is one of many elements of a large process and negotiations are ongoing.”

House Democrats floated a new proposal on Tuesday night that Senate Democrats and White House officials privately believe will cost more than $3.5 trillion overall. That exceeds the amount authorized under reconciliation instructions included in the budget resolution approved by both chambers. 

House Democrats dispute this accounting, saying their proposal is in line with reconciliation instructions. Yet it’s clear that at this moment, it’s House Democrats on one side, with Senate Democrats and the White House on the other.

The internal Democratic battle over health care is just one of the many challenges Democratic congressional leaders and the White House are struggling with in drafting the enormously complex package. And it shows how tough it will be for President Joe Biden, Speaker Nancy Pelosi and Schumer to push this legislation through Congress and to get it to BIden’s desk. 

Tax increases are the other key battleground, with major business groups and K Street lobbyists pushing on this issue both in the halls of Congress and back in lawmakers’ home states. What to do about tax rates for multinational corporations and treatment of capital gains have split Democrats between their moderate and progressive factions in both chambers, even before any bills have been marked up.

And the overall price tag for the reconciliation package remains a huge concern for Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.), key swing votes in a 50-50 Senate. If either or both of those moderates oppose the package, then it can’t get through the Senate. Biden told reporters on Tuesday that he can work out a deal with Manchin, saying of the West Virginia Democrat that “He’s always been with me. I think we can work something out. I look forward to speaking with him.”

Yet Axios reported that Manchin may only support a package with a $1 trillion to $1.5 trillion overall cost, and that any new legislation must be fully paid for by revenue increases. That would be far smaller than anything envisioned by the White House or Democratic leaders on the Hill.

That position could also endanger passage of the $1 trillion bipartisan Senate infrastructure bill that Manchin helped put together. Progressives in the House won’t back the infrastructure bill if they think Manchin is restricting their ability to expand social programs under reconciliation. Without their votes — and facing strong House GOP opposition — the measure can’t pass.

So stay tuned. The pace of the negotiations is picking up, and the potential dealmaking will have serious impacts both politically and policy wise.

GAMESMANSHIP 

Everyone is doubling down on everything 

Right now, it feels like Capitol Hill and the White House are in the midst of a giant game of Texas Hold ‘Em. All the key players — President Joe Biden, Speaker Nancy Pelosi, Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell and House Minority Leader Kevin McCarthy — just keep pushing more chips into the middle of the table. When challenged, they raise. No one is backing off an inch, at least not publicly. How this all ends up is hard to predict right now, but it’s fascinating — and a little scary — to watch these senior party leaders play out their hands.

Here are some examples:

→ McCarthy’s ties to former President Donald Trump — especially their interactions leading up to and on Jan. 6 — have come under scrutiny by the House select committee investigating the deadly Capitol insurrection. So what did McCarthy do? He invited Trump to speak at an NRCC fundraiser in Tampa this fall while also essentially threatened legal action if the select committee dares to subpoena his phone records. Democrats accuse McCarthy of undermining the very institution he wants to lead someday, but the California Republican believes it’s Pelosi and the Democrats who have gone too far.

→ Biden doubles down on Afghanistan. The disastrous withdrawal from Kabul has been the most serious foreign policy crisis of Biden’s presidency. Biden has blamed Trump for the 2020 agreement with the Taliban that required all U.S. troops  be out of the country by May 1 for restricting his options in dealing with the situation there. Yet Biden went ahead with the withdrawal following an internal review by his national security team, just moving the exit date back by four months. So what does Biden do? He calls the withdrawal an “extraordinary success,” even though dozens of Americans and thousands of Afghan allies remain stuck in Afghanistan. U.S. forces evacuated more than 120,000 people from Kabul airport. Now the administration is seeking $6 billion to cover the resettlement of an estimated 100,000 Afghans in the United States following vetting. And billions of more dollars will be needed after that.

→ Democrats know they’ll have a showdown with Republicans over government funding and the debt limit as the Sept. 30 end-of-fiscal year deadline approaches. McConnell has vowed to block any short term continuing resolution to fund the government if it includes a debt limit increase. McConnell’s take is that if Democrats are going to pass a $3.5 trillion reconciliation package, they can put the debt limit increase in there instead. So what do Democrats do? They’re going to add $20 billion-plus in emergency funding for disaster relief to the CR — think hurricanes and wildfires — as well as $6.4 billion to cover the cost of resettling tens of thousands of Afghan refugees (see above) to the package. So now any red state Republicans whose state or district has been hit by natural disasters will have to either vote for government funding, the debt limit and disaster relief, or vote against more federal aid for their constituents.

→ The Democrats’ $3.5 trillion reconciliation package is the biggest pile-on ever. The scale of this legislation is breathtaking, as the New York Times noted this week in saying it “would touch virtually every American’s life, from conception to aged infirmity.” So what did Democrats do? They set a hugely ambitious timeline for getting this package through Congress, maybe as soon as the end of October. Pelosi and Schumer are pushing their committee chairs to move as quickly as possible. 

House committee markups are set to be done by Sept. 15, with the Budget Committee scheduled to assemble everything into one package the following week. Democrats on the Senate Finance Committee — which has jurisdiction over a huge chuck of the legislation — will meet this week to discuss tax proposals. Republicans on the panel are demanding “full and open” hearings on the legislation, but that doesn’t have to happen under reconciliation rules if Democrats can agree on the measure.

THE OUTSIDE GAME

Ady Barkan’s group launches ad campaign to push for HCBS funding

New: Be A Hero, the group launched by disability activist Ady Barkan, has launched a TV and digital ad campaign in several key states as it presses for hundreds of billions of dollars in federal funding for HCBS — home and community based services — as part of the upcoming Democratic reconciliation package being assembled by Congress.

The group will spend more than $550,000 on the campaign, which includes TV ads in Arizona, West Virginia and the D.C. markets. Digital ads will also run in those three regions plus New Jersey. Be A Hero teamed up with ACLU on the Arizona TV and digital ads last week.

This ad is running in West Virginia, this is running in D.C. and this and this are running in D.C. as well. They are also running ads in New Jersey, including one aimed at Rep. Josh Gottheimer.

One ad features Barkan, who was diagnosed with the terminal neurodegenerative disease A.L.S. in 2016. Barkan has become one of the most prominent advocates for the disabled since that time.

HCBS funding is designed to help the disabled and elderly to live outside of institutions. President Joe Biden and other Democrats had promised as much as $400 billion for the programs as part of the reconciliation package.

But disability activists are concerned that the total figure will be reduced to the $150 billion to $250 billion level, and they’re looking to pressure prominent Democrats like Sens. Joe Manchin (W.Va.) and Kyrsten Sinema (Ariz.) on the issue.

Jonathan Cohn of HuffPost posted a story on this issue late last night: 

Instead of the roughly $400 billion over 10 years it would take to fund the initiative fully, leaders are talking about spending somewhere in the range of $150 billion to $250 billion, according to several sources on and off Capitol Hill who requested anonymity in order to speak candidly about the ongoing negotiations.

The situation is fluid, with multiple conversations involving Congress, the White House and outside groups happening simultaneously. Even a partially funded version of the home and community initiative would represent a historic increase, enough to have a substantial effect on the lives of everyday Americans.

YOUR NATIONAL FRONTS

We’ve highlighted the stories we believe will be of interest to Punchbowl News readers.

MOMENTS

9:05 a.m.: Vice President Kamala Harris will leave D.C. for Oakland.

9:45 a.m.: Speaker Nancy Pelosi will hold a news conference in the Capitol. 

10 a.m.: President Joe Biden will get the daily intelligence brief.

11:20 a.m.: Biden will speak at an event for labor unions. 

2 p.m.: Jen Psaki will brief alongside Ag Secretary Tom Vilsack and Brian Deese. 

2:45 p.m.: Biden will receive a Covid briefing.

3:40 p.m.: Harris will appear at a political event for Gavin Newsom in San Leandro.

5:30 p.m.: Harris will leave Oakland for D.C.

CLIP FILE

NYT

→ “Proceedings in 9/11 Case Resume, and Then Are Delayed Again,” by Carol Rosenberg in Guantanamo Bay, Cuba

→ “Adlai E. Stevenson III, Ex-Senator and Scion of Formidable Political Family, Dies at 90,” by Robert D. McFadden

 WaPo

→ “Amid political storms, Biden turns to natural disasters to project competence, compassion: ‘Thank God you’re safe’” by Ashley Parker 

→ “Texas Gov. Greg Abbott signs law creating new voting restrictions as opponents sue,” by Eva Ruth Moravec in Austin

→ “South Dakota governor issues order restricting abortion medications,” by Bryan Pietsch

AP

→ “In NYC after Ida, Biden calls climate ‘everybody’s crisis’” by Aamer Madhani and Darlene Supeville in New York

→ “Lee statue in Richmond set to be removed, sent to storage,” by Denise Lavoie and Sarah Rankin in Richmond, Va.

LAT

→ George Skelton in Sacramento: “The math is simple — California Republicans probably won’t pull off Newsom recall”

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Editorial photos provided by Getty Images