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Democrats are facing tough choices as they grapple with how to make good on their promise to deliver a sweeping social spending bill crucial to President BidenJoe BidenCapitol fencing starts coming down after ‘Justice for J6’ rally Senate parliamentarian nixes Democrats’ immigration plan Biden pushes back at Democrats on taxes MORE’s agenda. 

The high-profile balancing act is testing Democrats’ razor-thin majorities and putting a spotlight on long-dormant divisions. 

“This is a little bit like a Rubik’s cube on steroids. …It’s complicated,” said Sen. Mark WarnerMark Robert WarnerAdvocates call on top Democrats for 0B in housing investments Democrats draw red lines in spending fight Manchin puts foot down on key climate provision in spending bill MORE (D-Va.) about the state of play.  

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Here are some of the toughest hurdles for Democrats:

How big should the bill be?

Where Democrats land on the top-line is a decision that will affect everything else in the bill, forcing lawmakers to either scale back their ideas or drop some entirely. 

Progressives, including Senate Budget Committee Chairman Bernie SandersBernie SandersManchin suggests pausing talks on .5 trillion package until 2022: report Yarmuth and Clyburn suggest .5T package may be slimmed Sanders calls deadly Afghan drone strike ‘unacceptable’ MORE (I-Vt.) and Rep. Pramila JayapalPramila JayapalManchin suggests pausing talks on .5 trillion package until 2022: report Democrats urge Biden to commute sentences of 4K people on home confinement Manchin keeps Washington guessing on what he wants MORE (D-Wash.), argue the bill must stand at $3.5 trillion, which they view as a compromise from their initial $6 trillion goal. 

Moderate Sens. Kyrsten SinemaKyrsten SinemaBiden pushes back at Democrats on taxes Yarmuth and Clyburn suggest .5T package may be slimmed Of partisan fights and follies, or why Democrats should follow Manchin, not Sanders MORE (D-Ariz.) and Joe ManchinJoe ManchinManchin suggests pausing talks on .5 trillion package until 2022: report Biden pushes back at Democrats on taxes Yarmuth and Clyburn suggest .5T package may be slimmed MORE (D-W.Va.) say it has to be smaller and that they won’t support a $3.5 trillion bill. 

Some members of leadership are opening the door to going lower with Sen. Dick DurbinDick DurbinSenate parliamentarian nixes Democrats’ immigration plan Manchin keeps Washington guessing on what he wants Democrats hope Biden can flip Manchin and Sinema MORE (D-Ill.) acknowledging that $3.5 trillion “may not be the end point.”

Medicare vs. Medicaid

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Democrats are also debating how much to focus on Medicare, versus boosting Medicaid and shoring up the Affordable Care Act. 

The House bill creates a new federal health insurance program to provide Medicaid coverage in the 12 states that didn’t expand it under former President ObamaBarack Hussein ObamaWhite House debates vaccines for air travel Five questions and answers about the debt ceiling fight Our remote warfare counterterrorism strategy is more risk than reward MORE’s healthcare law. 

Senate Democrats haven’t yet decided whether to take the House approach amid pushback within the caucus about potentially rewarding states that didn’t expand Medicaid earlier.  Another, potentially faster, option under discussion would be to use the already established ObamaCare insurance markets to get more people covered. 

Democrats are also split over how to provide more vision, dental and hearing coverage through Medicare. For example, the House bill would start the dental benefits under Medicare in 2028, something Sanders believes is too slow. 

Drug pricing

A rebellion from three House Democrats against a prescription drug plan is foreshadowing bigger headaches awaiting Biden and Democratic leadership on the key provision. 

Democratic leaders are vowing that the final bill will allow the government to negotiate with drug companies to lower the prices for prescription medications. The plan is crucial because the savings expected to be generated could help cover the costs of other pieces of the spending bill’s healthcare provisions. 

But House moderates have warned that the drug-pricing plan has little chance in the 50-50 Senate, where Democrats face no room for error, and instead have pitched a narrower bill. The broader plan, which is backed by House leadership, has already raised hackles among some Senate Democrats and the pharmaceutical industry is now ramping up its attacks, which would build pressure on lawmakers. 

Climate

The House Energy and Commerce Committee included a Clean Electricity Payment Program, which incentivizes transitioning to clean energy, in its portion of the spending bill and Democratic senators who support the policy have been working behind the scenes to ensure it gets into their version of the bill. 

But they are facing a stumbling block in the form of Manchin, who chairs the Energy and Natural Resources Committee and is tasked with drafting some of the clean energy and climate provisions. 

Manchin, during an interview with CNN, argued that the transition to clean energy “is happening” and so it “makes no sense” to use taxpayer funding. Manchin has been cagey about if he’ll offer his own version of the program, telling reporters that he wasn’t “going to negotiate this in the press.” 

Corporate tax rate

Democrats need to come to an agreement on how high to go with taxes, including where to set the corporate tax rate after Republicans used their 2017 bill to drop it from 35 percent to 21 percent. 

Biden, as part of his plan, pitched a 28 percent corporate tax rate. That’s not going to happen, but the question is how much lower will congressional Democrats go and how much revenue will it cost them.

House Democrats are pitching a 26.5 percent corporate tax rate, but that’s in flux in the Senate. Manchin and Warner, whose votes Senate Majority Leader Charles SchumerChuck SchumerBiden discusses agenda with Schumer, Pelosi ahead of pivotal week CEOs urge Congress to raise debt limit or risk ‘avoidable crisis’ If .5 trillion ‘infrastructure’ bill fails, it’s bye-bye for an increasingly unpopular Biden MORE (D-N.Y.) needs, have both signaled that they want the rate to be at 25 percent. 

Inheritance-tax plan

House Democrats didn’t include Biden’s proposal to tax capital gains at death, leaving in place the current rule that requires heirs to only pay a capital gains tax when they sell and only on gains that have occurred after they inherited. 

House Ways & Means Committee Chairman Richard NealRichard Edmund NealBiden pushes back at Democrats on taxes Want a clean energy future? Look to the tax code Democrats brace for toughest stretch yet with Biden agenda MORE (D-Mass.) suggested to reporters that including it could have cost the larger spending bill votes leadership couldn’t afford to lose, saying that decision was “about getting to 218.”

Progressives have pushed for its inclusion with Sen. Elizabeth WarrenElizabeth WarrenThe Trojan Horse of protectionism Federal Reserve officials’ stock trading sparks ethics review Manchin keeps Washington guessing on what he wants MORE (D-Mass.) saying it should “be a part of” the plan, but the idea could face backlash from farm-state Democrats. Democrats are looking at alternatives including requiring inheritors to pay the total capital gain since the original purchase instead of since they inherited. 

SALT

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The House Ways & Means Committee didn’t include changes to the Trump-era SALT deduction cap, which has hit taxpayers in certain parts of New York, New Jersey and California particularly hard. 

Progressives are wary of an outright repeal, arguing that it would benefit the wealthiest households. But Democrats in both the House and Senate are warning that it will be hard to vote for the larger package without some changes. 

Democrats are vowing that they will include “meaningful” changes. Though they haven’t yet figured out where to land, one idea being floated is a two-year repeal of the cap. 

Income requirements 

Democrats are pitching a broad swath of new benefits under their $3.5 trillion spending plan, including universal pre-K and free community college. 

The House bill doesn’t include income-based restrictions on those benefits. But Manchin is floating using means-based testing to limit who would qualify some of the programs, arguing that it would help target the aid to the families that need it most and control cost. 

The issue splits Democrats—for example, Sen. Tammy BaldwinTammy Suzanne BaldwinWarren, Daines introduce bill honoring 13 killed in Kabul attack This week: Democrats kick off chaotic fall with Biden’s agenda at stake Bottom line MORE (D-Wis.) said she’s not in favor of means testing for the community college plan, while Kaine said he was. Even once Democrats make the big decision, whether or not to include the income caps, they’ll still need to haggle over where to set the ceilings. 

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Manchin is also floating placing work requirements on a beefed-up child tax credit that was included for one year in the coronavirus bill but that Democrats want to extend under the spending bill. 

The temporary expansion boosted the tax credit for children under six from $2,000 to $3,600 per child under 6 and to $3,000 for older children. House Democrats have floated extending it through 2025. 

But Manchin, during an interview with CNN, argued that Democrats should “make sure that we’re getting it to the right people” and that “people should make some effort.”   

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