Free community college, child tax credits, and affordable housing are among safety net measures on the chopping block as Democrats struggle to find middle ground with centrist holdouts

• Democrats are grappling with the likelihood of harsh cuts in their safety net bill.
• "It'll definitely be painful. And I don't know how that's going to shake out," Rep. Don Beyer of Virginia said in an interview.
• Some top Democrats are already floating another reconciliation bill next year to pick up what gets cut.

House Speaker Nancy Pelosi of California made it crystal clear on Tuesday: You can't always get what you want – and it's time for Democrats to make some tough decisions as negotiations on their social spending bill reach a make-or-break phase.

Pelosi is bracing lawmakers for the massive cuts required to assemble a spending package capable of clearing their threadbare majorities in the House and Senate, garnering the votes of a small centrist faction made up of figures like Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona.

She lamented at a news conference that Democrats won't be able to pass a social safety net package amounting to $3.5 trillion due to centrist resistance. But she argued the plan that emerges from back-and-forth negotiations will still be "transformative" and aligned with the party's goal to remake the economy for the better.

Congressional Democrats and the White House are wrestling with huge dilemmas as they labor to get President Joe Biden's economic plans over the finish line. Measures including childcare subsidies, new Medicare benefits, a revamped child tax credit, tuition-free community college, and affordable housing are all on the chopping block. Pelosi has opened the door to both dropping spending priorities and shortening their duration to squeeze as much as possible into the final legislation, with no price tag locked in yet.

Some are acknowledging grueling sacrifices will have to be made as pent-up frustration with centrists spills out into the open amid the slog. "It'll definitely be painful," Rep. Donald Beyer of Virginia, who sits on the tax-writing House Ways and Means panel, said in an interview. "And I don't know how that's going to shake out."

Beyer, who chairs the Joint Economic Committee, said he was "frustrated" with Manchin and Sinema. "I certainly wish that Manchin and Sinema were of the same commitment to Build Back Better bill than the other 48 senators are," he told Insider. "But they aren't and this is what you get."

'Always a high-wire act'

Democrats pushing for a sweeping anti-poverty package financed with tax hikes on large firms and wealthy individuals are crashing into resistance from Manchin and Sinema. Since they're employing a legislative maneuver called reconciliation to pass it with a simple majority, Democrats can't lose their votes in a 50-50 Senate.

Their lack of clarity sparked anger among many Democrats including Sen. Bernie Sanders of Vermont. He's assailed Manchin's call for a sharply curtailed $1.5 trillion bill and said he doesn't even want to be in the same room to negotiate with him. He's also fiercely criticized Sinema.

"With Democrats, it's always a high-wire act," Jim Kessler, the executive vice president for policy at the center-left think tank Third Way, told Insider. "The negotiations are always public and caustic."

Kessler, a former Senate Democratic aide, said he believed the legislation will brush against "at least 20" near-death experiences, similar to the passage of President Barack Obama's signature health law a decade ago, the Affordable Care Act.

He laid out the possibility of a bill tailored to three areas: climate spending and related tax credits, then tax cuts for middle class families, and provisions that strengthen people's ability to work like tuition-free community college that totals roughly $2 trillion. The sum is in line with what Biden privately told House Democrats about a potential compromise that could range from $1.9 trillion to $2.3 trillion.

That amount would cut the size and scope of the package's major planks and probably force Democrats to eject others. They pushed a pathway to citizenship for 8 million unauthorized immigrants in the party-line bill. But the Senate parliamentarian has advised that it be excluded and Manchin told Latino Rebels it was "too big" to include.

Sen. Tim Kaine of Virginia recently suggested to Insider the idea of adding a means test for tuition-free community college, since that would target federal assistance to lower-income Americans. A Democratic aide told Insider that possibility was on the table to cut down on costs.

The Committee for a Responsible Federal Budget released an analysis on Tuesday, illustrating what a $2.3 trillion bill could look like. It would include an expanded child tax credit, permanently extending ACA health insurance subsidies, paid family leave, and "affordable" pre-K and community college. But it would exclude medical leave.

Beyer said given that Democrats view fighting the climate emergency as critically important, those tax breaks and green energy provisions stand the best chance of having a longer duration.

Referring to the Biden child tax credit as "kiddie checks," the Virginia Democrat said he believed they could be "reasonably reduced," and a future Congress would renew them.

Some Democrats float another reconciliation bill next year

Some centrist House Democrats have blamed progressives for pushing priorities that cost the party over a dozen seats in last year's election, handing them only a three-vote majority. But progressives argue the dynamic has flipped and they occupy a new space in the party: Rescuers who pulled an economic agenda from the brink of oblivion, and salvaged their odds of scoring wins in the 2022 midterms.

"We're not going to pit child care against climate change," Rep. Pramila Jayapal of Washington, leader of the Congressional Progressive Caucus, said on a press call on Tuesday. "We're not going to pit housing against paid leave. We're not going to pit seniors against young people."

Affordable housing is another big priority that faces being cut. House Democrats set aside $300 billion to help renovate public housing and build new homes for low-income Americans, Insider's Ben Winck reported.

"You can't try to fit all this stuff into a bill half the size," a Senate Democratic aide told Insider, who spoke on condition of anonymity to be candid. "Then nothing will work well and it will be like ACA all over again, where people experienced no benefit in their lives for years."

In late September, progressives forced Pelosi to bail on approving a $550 billion infrastructure package focused on roads and bridges - legislation that Manchin and Sinema helped design - until the bigger spending bill containing the bulk of Biden's priorities gets hammered out. They are pushing for the biggest bill they can get and favor sunsetting new benefit programs within a few years, daring Republicans to block their extension.

Kessler argues it "makes more sense" to fund fewer programs robustly so they wind up more effective and quickly produce tangible improvements in people's lives. There's also a high risk Democrats won't be able to go back and fix mistakes in their sprawling bill: For years during the Obama administration, Republicans blocked efforts to repair the ACA's flaws as it got off the ground, and they would likely do so for this bill if they win back a chamber or both in the 2022 midterms.

Some Democrats are starting to float the possibility of another reconciliation bill next year, a long shot given that policy usually takes a backseat to campaigning in midterm years. But Pelosi and her top lieutenants aren't closing the door.

"I have broached the subject with a number of people in leadership positions in the caucus," Rep. John Yarmuth of Kentucky, chair of the House Budget Committee, told Insider. "And there is certainly a willingness to pursue that idea if it makes sense at the time."

Yarmuth, who recently announced his retirement, said he views anothe reconciliation bill as a chance to "put Republicans on the spot." He mapped out a scenario where Democrats stuff a bill with potentially excluded but popular provisions like expanded Medicare benefits and bait Republicans into opposing it, calling it "good politics and good policy."

"I do think it's feasible," Beyer said of another party-line bill next year. "We all are aware of the fragility of the majorities in the Senate and the House, we're gonna do our very best to keep building on them."

He cautioned that dozens of frontline Democrats in swing districts may become harder to court on another bill. But the potential for more legislation is there.

"It's important for Democrats not to think that we get one year and then the rest of the Biden era is lost," Kessler said.