As Democrats push a $3.5 trillion bill, a top lawmaker stays mum on tax increases
By Emily Cochrane
When Republicans sought to pass a giant tax cut along party lines in 2017, Rep. Richard Neal of Massachusetts, the top Democrat on the Ways and Means Committee, led his party’s effort to brand the legislation as a tax break for the rich, helping erode public support for the bill.
Four years later, Neal is the top tax writer in the House and on the brink of leading Democrats in advancing a $3.5 trillion spending package that is at the core of President Joe Biden’s economic agenda. The effort, derided by Republicans, could undo parts of the 2017 law and deliver on decades of Democratic promises to force corporations and the rich to pay more.
But Neal, 72, whose committee is formally drafting legislation, remains notably enigmatic about how he will pay for the bill, which would fund paid family and medical leave, expand Medicare benefits, address climate change and expand public education. He routinely brushes off questions about his support for the kind of tax increases on businesses or the wealthiest Americans that Biden and other party leaders have proposed — leaving some liberal Democrats worried that one of their own leaders could thwart the scope of their economic ambitions.
“I’m likely to hold off on the pay-fors until we are at the altar,” Neal said in a recent interview, using shorthand for the mechanism Congress uses to pay for legislation. “The courtship can go on, then we get to the altar, and then we have to get them to say ‘I do.’”
Yet the courtship with the competing wings of his party has largely been shrouded in secrecy. His Senate counterpart, Ron Wyden, D-Ore., and other liberal lawmakers have maintained a steady fanfare of suggested tax proposals, including taxing corporations that buy back stock, raising taxes on multinational corporations and carrying out changes to the estate and capital gains taxes.
Neal has spoken expansively in favor of key spending components his committee has drafted and will ultimately advance — including bolstering health care benefits, granting paid family leave and extending monthly payments to families with children. But he has yet to release the formal draft legislation outlining plans to collect revenue to pay for the bill and remains largely silent about what he will support.
That omission has not gone unnoticed in Washington. Rep. Stephanie Murphy, D-Fla., has so far refused to support advancing any portion of the legislation in the committee, declaring she could not assess its merits without the full text, including knowing how it would be paid for.
“It’s cute, I guess, to come out with a bunch of programs that have strong support across the caucus but be coy about the pay-fors,” said Mary Small, national advocacy director for Indivisible, a progressive grassroots organization lobbying lawmakers to stand firm behind a $3.5 trillion price tag. “It’s not a serious posture to say, I support this policy and I’m not going to adequately fund it so it can responsibly function.”
The machinations reflect a broader dynamic in the Democratic caucus that could ultimately narrow the scope of a package intended to transform the nation’s social safety net. With only three votes to spare in the House and unanimity needed in the Senate to protect the bill from a Republican filibuster, Democrats have yet to resolve deep divisions over how to fully finance as much as $3.5 trillion in spending over 10 years and how to structure and enact certain policies.
While polls show widespread voter support for increasing taxes on the wealthiest individuals and corporations, some Democrats remain wary of political retribution for tax increases that may not ultimately become law — particularly moderates partly reliant on campaign war chests fueled by business interests.
Between the complex process and the public demands of more prominent moderates, including Sens. Joe Manchin, D-W.Va., and Kyrsten Sinema, D-Ariz., Neal has kept his policy preferences largely secret.
Pressed repeatedly this summer over his appetite for tax increases, Neal appeared at times almost haunted by missteps of decades past, recalling when Democrats controlled the House in 1993 and adopted a tax based on the heat content of fuels. The Senate rejected it, and many House Democrats that voted for the tax lost their seats, allowing Republicans to take back the chamber a year later — a painful political lesson that he said he had warned newer lawmakers about.
“My intention is to get this done, and I don’t want them to embrace an exercise that penalizes them with no policy achievement,” he said of his colleagues. “I’m enthusiastic about what the president wants to do, but if you volunteer revenue in Washington now, opposition is instant.”
Liberal Democrats, however, argue that the political winds have shifted, driven in part by decades of economic inequality that have been exacerbated by the pandemic and reports by ProPublica detailing how some of the wealthiest Americans have avoided paying taxes.
Neal has successfully evaded repeated challenges from progressives who view him as the quintessential corporate Democrat and too conservative for the state. During the pandemic, Neal has also fully embraced and advanced a number of progressive policies his colleagues have long championed, including the expansion of monthly payments to families with children in the $1.9 trillion pandemic relief bill.
But this week, he surprised some Democrats with the details of the economic package, including a later enactment date for dental benefits under Medicare. Late Friday, the committee released more details about tax incentives to support clean energy and proposals to lower drug prices, but dodged tax increases and the push to remove a cap on the state and local tax deduction.
Walking to the frigid committee hearing room on Thursday to begin the formal process of advancing the budget package, Neal promised revenue details soon and again batted away a request for specifics.
“What we’re about to do here is going to be subjected, again, to further consideration and negotiation as we go forward,” he said. “There’s a ways to go in this, and I think that it’s going to involve some patience over the next few weeks.”