UPDATE 6-Major issues unresolved as Democrats in U.S. Congress seek deal on spending bill

·5 min read

(Updates with Democrats' corporate tax plan, Sinema and Manchin at White House)

By Richard Cowan, David Morgan and Timothy Gardner

WASHINGTON, Oct 26 (Reuters) - U.S. congressional Democrats struggled on Tuesday to reach agreement on a massive bill to expand social programs and tackle climate change, with disagreement on multiple major issues reducing the odds of a quick vote.

President Joe Biden's party has spent months fighting over what to include in legislation https://www.reuters.com/world/us/biden-democrats-2-trillion-spending-plan-what-is-what-is-cut-2021-10-20 forecast to spend at least $1.5 trillion over 10 years - less than half the initial $3.5 trillion target - with moderates and progressives divided over issues including taxes, prescription drug pricing, family leave, climate change and immigration.

Negotiations also have held up passage of a $1 trillion infrastructure bill that passed the Senate with the support of 19 Republicans, as the House of Representatives' large progressive caucus has refused to vote on it until the bigger deal is reached.

The leader of the 95-member Congressional Progressive Caucus and House Speaker Nancy Pelosi were at odds on Tuesday on whether to try to vote on infrastructure this week, before a Biden trip out of the country.

"Let's vote both of them out at the same time," Representative Pramila Jayapal said as she left a meeting with Pelosi. Referring to the still-under-negotiation social spending measure, the caucus leader added: "We gotta have the agreement on what it is, so that it can be written up. And then we can vote both bills through."

Asked about Jayapal's comments that having an agreement in principle would not be enough to justify a vote on infrastructure, Pelosi replied: "Well, I think it is."

With razor-thin margins in the House and Senate and a united Republican opposition, Democrats need almost 100% unity to pass either package.

'BILLIONAIRES TAX' IN PLAY

The number of difficult issues still to be resolved appeared daunting.

Democratic Senator Tim Kaine ticked off parental leave benefits, Medicare and Medicaid expansions, a possible "billionaires tax" and lowering the cost of prescription drugs as some undecided items.

Senate Finance Committee Chairman Ron Wyden said details of his plan to raise taxes on billionaires, many of whom pay next to nothing, would be unveiled later on Tuesday.

That idea is getting pushback from House Democrats who want to stick with earlier proposals for raising tax rates on the rich and corporations.

Wyden and Senator Elizabeth Warren, alongside Senator Angus King, an independent who caucuses with Democrats, also unveiled details https://www.reuters.com/world/us/details-emerge-corporate-minimum-tax-plan-us-senate-democrats-cnbc-2021-10-26 of a plan to enact a 15% minimum corporate tax targeting about 200 firms with more than $1 billion in profits annually over a three-year period.

Democrats were eyeing prompt passage of the infrastructure measure as a way to refresh many surface transportation programs that expire on Sunday. They also think new investments in roads, bridges, airport construction and broadband internet service for rural areas would boost their chances of winning the tight Nov. 2 governor's race in Virginia.

Democrats intend to use a special "budget reconciliation https://www.reuters.com/world/us/us-senates-reconciliation-process-its-not-way-it-sounds-2021-08-10 " procedure to pass the larger of the two bills by a simple majority in the Senate, without any support from Republicans.

Centrist Democratic Senator Joe Manchin said earlier on Tuesday that the $1.5 trillion he seeks for the larger of the two bills is "more than fair," as progressives push for $2 trillion or more.

Manchin, however, did not outright reject a higher top line during an interview with the Economic Club of Washington. He and fellow moderate Democrat Kyrsten Sinema each hold the power to block legislation in the evenly divided Senate.

Sinema and Manchin were at the White House on Tuesday evening for talks on the legislation.

Manchin questioned progressives' drive for aggressive climate-control provisions, suggesting Biden could push countries at U.N. talks next week in Scotland to take tough actions based on steps the United States already has taken.

Manchin, who represents the coal-producing state of West Virginia, is the top recipient in Congress of campaign contributions from oil and gas interests.

He has opposed https://www.reuters.com/business/energy/democrats-likely-ditch-us-methane-fee-amid-opposition-sources-2021-10-25 two major climate measures in the social spending bill supported by fellow Democrats: a plan that would reward utilities for investing in renewables such as solar and wind power and penalize those that do not, and a fee on oil and natural gas producers for emissions of methane, a greenhouse gas.

He also poured cold water on another hot-button initiative with which Democrats were flirting: changing Senate rules to abolish or place new constraints on the filibuster https://www.reuters.com/world/us/could-biden-steer-us-senate-into-changing-filibuster-2021-10-22, which gives Republicans the power to block most bills.

"It makes no sense to me" to abandon that rule, Manchin said, given that Democrats opposed such action by Republicans when they were in the minority.

Democrats' anger with Republicans' use of the filibuster could come to a head this week if Senate Majority Leader Chuck Schumer attempts to pass major voting rights reforms for the fourth time this year.

(Reporting by Richard Cowan and Timothy Gardner; Additional reporting by David Morgan and Doina Chiacu; Writing by Richard Cowan and Patricia Zengerle; Editing by Scott Malone, Jonathan Oatis and Peter Cooney)

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