Democratic Lawmakers Fracture Over Tax Plans, Drug Prices

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The day before the House Democrats’ self-imposed deadline for completing committee work on their vast social policy bill, tensions were rising in their ranks on Tuesday over how to pay for popular elements of it, such as child care access, universal prekindergarten, and expanded health insurance.

Progressive senators, led by Elizabeth Warren, Democrat of Massachusetts, and Bernie Sanders, independent of Vermont, pushed back hard on the decision by senior Democrats on the House Ways and Means Committee to focus a $2.1 trillion package of tax increases on income taxes, not levies on the vast fortunes of tycoons like Jeff Bezos and Elon Musk.

They vowed to continue their drive to tax, for the first time, billions of dollars in assets that grow each year and are not taxed if they are not sold.

“The wealth tax is not something that a bunch of politicians sit around and think, ‘Great idea.’ It’s something that the American people say we need for basic fairness,” said Ms. Warren, who has proposed an annual 2-percent tax on the value of household wealth over $50 million, rising to 6 percent above $1 billion.

Mr. Sanders said he, too, had not given up.

“The Ways and Means Committee has come up with their proposal; the Senate Finance Committee is working on their proposal,” said Mr. Sanders, the chairman of the Senate Budget Committee, which will draft that chamber’s version of the bill. “I think what is most important at this point is that at a time of massive income and wealth inequality, with a tax system, clearly, that benefits the wealthy, we begin to address” such inequities.

Facing the delicate politics of a narrowly divided Congress, senior House Democrats opted to be more mindful of moderate concerns in their party than of its progressive ambitions, focusing on traditional ways of raising revenue through income taxes.

Even liberals on the Ways and Means Committee were defending that approach on Tuesday. Representative Lloyd Doggett of Texas, the second-ranking Democrat on the panel and a veteran progressive, said swing-district Democrats simply could not be subjected to the Republican attacks that a broad tax on wealth would bring.

“People who aren’t wealthy think they will be,” he said, “and they don’t want to be punished for their success.”

But finding the revenue to pay for social spending will not be easy without some way to tap the huge stores of billionaire wealth that have gone untaxed year after year. House Democrats were hoping to raise $500 billion by holding down the cost of prescription drugs, in part by allowing Medicare to negotiate prices and by tying acceptable drug prices to those paid in other countries.

But if billionaires have powerful advocates in Washington, the pharmaceutical lobby is at least as powerful.

On Tuesday, two moderate Democrats, Representatives Scott Peters of California and Kurt Schrader of Oregon, came out against the Democratic leadership’s aggressive drug pricing plan, producing a more moderate version that would likely produce considerably less savings for the government.

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