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Democrats Back Away From Raising Tax Rates to Pay for Agenda

In order to maneuver around unanimous Republican opposition, Democrats are moving the bill using a fast-track budget process known as reconciliation that shields fiscal legislation from a filibuster. But to cobble together a majority for passage with their razor-thin majorities, they must keep all 50 of their senators and nearly every House Democrat united behind a final product. That gives Ms. Sinema and Mr. Manchin something close to veto power over the contents of the bill, which cannot pass without their backing.

Mr. Biden has repeatedly called for his plan to be funded largely by taxes on high earners and corporations, and he has vowed not to raise taxes on anyone earning less than $400,000 a year. But he has also expressed flexibility, in public and in private, on the overall shape of the package.

“What we think about here is what we want to achieve,” Jen Psaki, the White House press secretary, told reporters this week, “which is historic impact on how we address child care and care issues that families across the country are having, making sure we’re doing something to address the climate crisis, and making sure we’re more competitive and putting people back to work. There are a lot of ways to get there.”

Senator Ron Wyden of Oregon, the Finance Committee chairman, and other top Democrats have rolled out a steady stream of tax proposals over the last few months, with the goal of having sufficient options to provide however much revenue is needed to finance the reconciliation bill.

Mr. Manchin has pushed back against the high levels of spending Democrats are proposing, but he has been openly supportive of rolling back the tax cuts Republicans passed in 2017 during the Trump administration. As a member of the House in 2017, Ms. Sinema joined every Democrat in voting against the Republican tax plan that lowered those rates, but has remained resistant to increasing the corporate and individual income tax rates.

Ms. Sinema has been engaged in regular talks with Mr. Biden and senior White House officials, including a meeting in her private basement hideaway in the Capitol on Wednesday, as administration officials push for her to accept even a small increase in the rate.

Democratic leaders met privately on Wednesday with the leaders of the tax-writing committees, Mr. Wyden and Representative Richard E. Neal of Massachusetts, as well as White House staff members as they raced to cobble together a compromise outline by the end of the week. In private meetings with rank-and-file lawmakers on Tuesday, Mr. Biden largely steered clear of discussing details about the revenue side of the bill, signaling the hurdles still ahead.

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