Paid leave falls out of Democratic package in urgent scramble to secure Manchin’s support

The plan’s survival has been in question for several days due to objections from Sen. Joe Manchin, a West Virginia Democrat. Biden’s initial 12-week proposal was scaled back to four weeks in an effort to secure Manchin’s support. That was rejected, leading to an effort by New York Democratic Sen. Kirsten Gillibrand that attempted to find a compromise with Manchin.

That has not succeeded, one of the people said, prompting Democrats to push it out of the package as they seek to scale back the proposal’s overall cost and programs to meet Manchin’s demands.

“To expand social programs when you have trust funds that aren’t solvent, they’re going insolvent. I can’t explain that. It doesn’t make sense to me,” Manchin said. “I want to work with everyone as long as we can start paying for things. That’s all. I can’t put this burden on my grandchildren. I’ve got 10 grandchildren … I just can’t do it.”

But each move toward Manchin also risks alienating progressives, and dropping paid leave, which has been viewed as a cornerstone piece of the proposal, adds another complication for the White House and Democratic leaders as they seek to unify the party over the course of the next few hours.

Gillibrand told CNN Wednesday afternoon that she is still working to convince Manchin to support the inclusion of paid leave. She described reports that it is completely out as “definitely premature.”

“He hasn’t signed off on my recent proposal, and so it’s not yet agreed to,” she said, “but I’m not giving up and I’m not going to give up until the deal is signed.”

But Manchin suggested Wednesday evening that paid family and medical leave doesn’t belong in the Democrats’ reconciliation bill at all. The West Virginia lawmaker told CNN that Democrats should be “examining all this stuff,” but “to put this in a reconciliation bill major policy … is not the place to do it.”

“I am just saying we have to be careful what we are doing, if we are going to do it, do it right,” Manchin said.

White House officials have warned for several days that the paid leave proposals could be cut from of the package, despite Biden’s strong support for them. But despite the push by congressional Democrats to find a path to keep it in, the proposal becomes the latest element to hit the cutting room floor, joining free tuition for community college, marginal tax rate increases to finance the proposal and the Clean Electricity Performance Program (CEPP), a cornerstone piece of Biden’s climate proposal.

The decisions underscore Biden and Democratic leaders’ clear urgency to lock in an agreement that can pass muster with Manchin and Arizona Democratic Sen. Kyrsten Sinema — and move it as quickly as possible.

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After an Oval Office meeting with Biden on Tuesday night and a subsequent two-hour meeting with his top negotiators in the Capitol on Wednesday, the sides were nearing an agreement, people familiar with the talks said.

But whether that agreement would maintain the support of the broader House and Senate Democratic caucuses has remained an open question.

“The President is working with everybody now,” Manchin said Wednesday evening. “There is not a whole lot to say. Everybody is working really hard.”

Key elements including free universal preschool, child care expansion, a fully refundable one-year extension of the Child Tax Credit, three years of expanded Affordable Care Act premiums and housing subsidies all appear likely to land in the final package, people familiar with the negotiations said. The climate portion of the package, even without the CEPP, is expected to include more than $500 billion of tax incentives and credits, along with substantial loan and grant programs in the push to reduce emissions.

Medicare expansion for dental, vision and hearing — which progressives have made clear needs to be in the proposal — continues to be a contentious issue as negotiators seek to address the competing positions of Manchin and Sen. Bernie Sanders, a Vermont independent who caucuses with the Democrats.

Sanders met with Biden at the White House on Wednesday afternoon.

Democrats are also attempting to thread the needle in an effort to address what Democrats identify as a health care coverage gap created by the 12 states that chose not to accept Medicaid expansion under the Affordable Care Act.

Manchin has objected to earlier proposals to address the coverage gap, leading supporters to craft an effort that would attempt to get at the issue through subsidizing private insurers.

“The best solution, since it’s already there, is to have people that are in the coverage gap be able to get marketplace insurance,” Sen. Tammy Baldwin, a Wisconsin Democrat said, noting that this is something that’s already done in other states.

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Baldwin said the Centers for Medicare and Medicaid Services, which would have run the Medicaid expansion program considered for the proposal, told lawmakers that it would take at least three years to get it going. The delayed timing combined with Manchin’s aversion to expanding federal programs before shoring up existing ones presented major challenges to the initial plan.

Baldwin said she thinks Manchin, who is an essential vote, is “more comfortable” with this plan. “Everything’s not totally worked out, but this is something familiar to him,” she added.

Yet Democrats are also in the midst of a significant debate over how finance the ultimate cost of the proposal, which sources said negotiators were pushing to land at $1.75 trillion. Sinema’s objections to raising the marginal tax rates on corporations and the wealthy have set off a scramble to identify new revenue streams, with a 15% corporate minimum tax drawing support to go along with at 15% global minimum tax that and significant funds to bolster tax enforcement.

An effort to move a tax on the unrealized asset gains of billionaires, though it has drawn significant attention in the last several days, is unlikely to make the final package, officials and aides said.

Negotiators are also weighing whether to include a 3% surtax on individuals making more than $5 million annually, which was included in an House Ways and Means Committee proposal.

This story has been updated with additional developments Wednesday.

CNN’s Jessica Dean, Morgan Rimmer and Paul LeBlanc contributed to this report.

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