As Democrats Push a $3.5 Trillion Bill, a Top Lawmaker Stays Mum on Tax Increases
The silence from Representative Richard Neal of Massachussetts has some liberal Democrats worried that he could thwart the scope of their economic ambitions.,
As Democrats Push a $3.5 Trillion Bill, a Top Lawmaker Stays Mum on Tax Increases
The silence from Representative Richard Neal of Massachussetts has some liberal Democrats worried that he could thwart the scope of their economic ambitions.
Representative Richard E. Neal of Massachusetts, the top Democrat on the Ways and Means Committee, routinely brushes off questions about his support for President Biden’s plans for tax increases.Credit…Tom Brenner for The New York Times
WASHINGTON — When Republicans sought to pass a giant tax cut along party lines in 2017, Representative Richard E. 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, Mr. Neal is now 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 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 Mr. 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 Mr. 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,” Mr. 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 of Oregon, 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.
Mr. 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. Representative Stephanie Murphy, a Florida Democrat, 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, the national advocacy director for Indivisible, a progressive grass-roots 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 Senators Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona, Mr. Neal has kept his own policy preferences largely secret.
Pressed repeatedly this summer over his appetite for tax increases, Mr. 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.
“His actual deeds are not conforming with major Democratic policies,” said Ralph Nader, a consumer advocate and former presidential candidate, who has repeatedly crowned Mr. Neal as the most prominent opponent to Mr. Biden’s agenda. “You don’t usually take on the chairman of the House Ways and Means Committee, but they’re not getting anywhere with him.”
In theory, this moment is why Mr. Neal waited for decades to sit at the helm of the oldest committee in the House, with a sprawling jurisdiction over the tax code, trade and a series of social safety net programs. First elected to Congress in 1988 after comparatively brief stints as a teacher and mayor, he moved to the Ways and Committee in 1993, where he emerged as a genial institutionalist and gained respect from both parties.
“It’s the apex of achievement within the institution,” he said recently in the chairman’s ceremonial office off the House floor, seated at the table he and his staff used to barricade the door during the Jan. 6 riot. “This is the citadel of achievement in Congress.”
After Democrats reclaimed control of the House in November 2018, Mr. Neal took charge of the committee and soon faced criticism for moving slowly to request tax records from President Donald J. Trump.
Under his leadership, the committee has held the fewest policy hearings in the last 12-year period, according to the nonpartisan Lugar Center, with Mr. Neal often keeping his cards close to his chest as the committee haggles through expansive legislation to reduce surprise medical billing and overhaul the social safety net.
“He’s a pragmatist,” said Robert Rubin, who served as Treasury secretary under President Bill Clinton and still shares his views to Mr. Neal. “He likes to think things through and weigh in balance, competing considerations.”
At times, he worked closely with the Trump administration, spending hours walking the halls with Robert E. Lighthizer, then the trade representative, to hammer out the details of the new trade agreement with Mexico and Canada, and negotiating components of pandemic relief packages with Steven Mnuchin, the Treasury secretary.
In a statement, Speaker Nancy Pelosi of California referred to him as “a legislative maestro who builds consensus and orchestrates some of our nation’s most ambitious lawmaking.”
He has successfully evaded repeated challenges from progressives who view him as the quintessential corporate Democrat and too conservative for the state. During the pandemic, Mr. 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, Mr. 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.”
Jim Tankersley contributed reporting.