Biden's big spending bill is being partly held up by Democrats squabbling over tax cuts for the rich

Bob Menendez Bernie Sanders — Sens. Bob Menendez, D-N.J., right, and Bernie Sanders, I-Vt., arrive for a news conference on the state and local tax (SALT) deduction.
Tom Williams/CQ Roll Call

Democrats are still feuding over how to structure a tax break that will go to richer people.
Some Senate Democrats are growing impatient that it's holding up Biden's agenda.
"I wish it was done last week," Sen. Jon Tester told Insider of the dust-up over the SALT tax.

Time is running short for Senate Democrats to approve President Joe Biden's social and climate spending bill by Christmas, and lawmakers seem as stuck as ever when it comes to finalizing what may be the largest piece of the legislation.

Democrats are racing to approve the legislation by Christmas, a feat that seems increasingly difficult to pull off due to infighting over climate and healthcare provisions. In addition, a big part of the holdup includes a measure on how much to cut taxes for higher-earning people residing in high-tax, predominantly blue states.

Sens. Bernie Sanders of Vermont and Bob Menendez of New Jersey are negotiating a proposal to provide relief from the $10,000 limit on state and local taxes that taxpayers are able to deduct from their federal bill, known as SALT. Republicans established it in their 2017 tax law as a method to finance hefty corporate tax cuts.

The measure is poised to provide disproportionate benefits to wealthier Americans, and many of the Democrats who campaigned on aggressively taxing exactly those people want to avoid that embarrassing outcome.

The House-approved legislation has made many Democrats squirm since it contains an $80,000 cap on SALT. The nonpartisan Committee for a Responsible Federal Budget has projected that 70% of the benefits from that would flow to the top 5% of earners under the House bill.

Menendez is still eyeing unlimited deductions for individuals earning below $500,000 and couples earning below $950,000, but Sanders has dug in on a $400,000 income limit and pitched using new revenue generated to fund a broader expansion of Medicare benefits.

Sanders, in particular, doesn't want it to carry outsized benefits for the wealthy, saying earlier this week that it'd be "bad policy and bad politics." Other Senate Democrats have jumped into the fluid negotiations to say they agree with him.

"I put my two cents worth in that it needs to be fixed," Sen. Angus King of Maine told Insider about the House bill. "I basically said, 'I'm with Bernie.'"

Democrats remain tight-lipped about the delicate state of SALT talks. Sen. Michael Bennet, another lawmaker who is closely involved in the talks, said in a brief interview he was unsure whether they'd be able to strike a deal by week's end.

Other Senate Democrats are growing anxious that SALT isn't resolved with weeks-long discussions still dragging on. They're racing to avoid cutting off 35 million families from monthly child tax credit payments next month.

"I wish it was resolved last week," Sen. Jon Tester of Montana told Insider on Tuesday.

Still, there are few signs that Sanders and Menendez are close to a resolution.

"The discussions are ongoing," a Senate Democratic aide granted anonymity to speak about the SALT talks told Insider. "There's movement, just not real consensus yet."

Read the original article on Business Insider