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Democrats assess landscape after Manchin’s ‘Build Back Better’ bombshell

Some question whether too much damage has been done; others seek targeted package

Rep. Pramila Jayapal, D-Wash., says a reconciliation bill deal at this point may be a bridge too far.
Rep. Pramila Jayapal, D-Wash., says a reconciliation bill deal at this point may be a bridge too far. (Bill Clark/CQ Roll Call file photo)

Democrats searching for their next move after Sen. Joe Manchin III announced his opposition to the party’s $2.2 trillion climate and social safety net package are caught between antagonizing and accommodating the West Virginia Democrat.

Manchin said Sunday on Fox News and in a subsequent statement that he could not vote for the legislation his party has been working on for most of 2021. Democrats reacted with a mix of ire toward Manchin and determination to find a way forward, with a handful offering ideas of what a new compromise package could include.

[Manchin pulls plug on ‘Build Back Better’ bill]

Senate Majority Leader Charles E. Schumer hit all three in a “Dear Colleague” letter Monday. First the New York Democrat called out Manchin directly, citing his inability to reach agreement with President Joe Biden as the reason the Senate did not vote on the budget reconciliation package before Christmas — even though the bill had not been fully drafted, scored or vetted by the Senate parliamentarian.

Schumer announced that the Senate would still consider the package “very early in the new year so that every Member of this body has the opportunity to make their position known on the Senate floor, not just on television.” He added that the chamber will keep voting on revised versions “until we get something done.”

Senate Democrats will hold a caucus call Tuesday evening to discuss the path forward.

But Manchin cast doubt Monday in a radio interview with West Virginia Metro News’ Hoppy Kercheval whether he and his more progressive colleagues can find a compromise solution.

“We’ve been way far apart philosophically,” he said. “It was never going to change. It never could change with that many people.”

Congressional Progressive Caucus Chair Pramila Jayapal, D-Wash., who said Manchin called her Monday morning, expressed her own skepticism about reaching a slimmed-down deal.

“I’m sure that the conversations about legislation will continue and we will continue to be involved in that. But no one should think that we are going to be satisfied with an even smaller package that leaves people behind,” Jayapal said on a call with reporters.

Jayapal urged Biden to begin taking administrative actions “to keep his promise to us and to the American people” rather than wait for a legislative compromise that may not materialize because of Manchin’s shifting demands.

“He wants people to keep guessing about where he is and I’m not willing to spend energy on that anymore,” Jayapal said.

Manchin’s demands

Democrats first proposed spending $6 trillion in the reconciliation package and then $3.5 trillion, while Manchin said his ceiling was $1.5 trillion. Ultimately Manchin and Biden reached agreement on $1.75 trillion, but House Democrats passed a package that would spend over $2 trillion.

During negotiations, Democrats spent weeks debating whether to fund more programs for shorter time frames or fewer for longer. They settled on the former, thinking Manchin was on board, but he’s recently raised objections to that approach.

“The same bill I have in front of me right now that they kept putting in front of me was the same $6 trillion bill from the beginning. The only thing that changed was the time element in which they would pay for things,” Machin said in the radio interview. “And I said that’s disingenuine to tell someone who’s getting a child tax credit it goes away in one year or someone who’s getting any of these other services it goes away in two or three years when we are basically trying to [raise] taxes for 10 years to pay for them.”

Manchin’s desire to have both spending and revenue measures in the package cover the full 10-year budget window means the package Democrats have drafted will have to be completely rewritten to accommodate his concerns.

Some Democrats seem ready to do that.

“At the start of these negotiations many months ago, we called for prioritizing doing a few things well for longer, and we believe that adopting such an approach could open a potential path forward for this legislation,” said Washington Rep. Suzan DelBene, who chairs the New Democrat Coalition, a caucus of more moderate House Democrats.

White House Chief of Staff Ron Klain shared DelBene’s sentiment on Twitter, seemingly endorsing the suggestion.

The New Democrats’ statement highlighted the four priorities they suggested Democrats focus on months ago: extending the enhanced child tax credit from the March coronavirus relief law, expanding access to health coverage under the 2010 law, funding policies that will help combat climate change and directing money toward workforce development programs.

Senate Finance Chair Ron Wyden, D-Ore., said in a statement Sunday that while “it’s extremely disappointing to have to drop any major priorities,” Democrats should be willing to do so to avoid failing to deliver on their key promises.

“A package that addresses critical priorities over the long-term, like providing financial security for families, lowering the costs of health care and prescription drugs for seniors, and creating clean energy jobs by combating the climate crisis would go a long way toward addressing our challenges,” Wyden said. “The Finance Committee has put forward a revenue menu with more than enough options to permanently pay for these priorities.”

Another complication is Manchin said any efforts to tweak the package should go through Senate committees. Democrats and Republicans have equal splits on committees in the 50-50 Senate, so that could lead to deadlocked party-line votes in markups.

Leadership priorities

Schumer didn’t say he was ready to scale back the measure. But he highlighted four policy goals Democrats should prioritize: lowering prescription drug costs, extending the child tax credit, combating climate change and providing access to affordable child care.

Speaker Nancy Pelosi sent her own “Dear Colleague” letter to House Democrats Sunday night where she discussed the “most critical provisions” of the package. The California Democrat had a longer list than Schumer’s that also included universal prekindergarten, home health care and expansions of the 2010 health care law.

“I’m not deterred at all,” Pelosi said Monday at an infrastructure press conference in California. “This will happen. It must happen and we will do it as soon as we can.”

Getting Democrats to agree on a narrowed list of priority programs that fully funded would fit under Manchin’s $1.75 trillion ceiling will be difficult.

The child tax credit extension, which is on most Democrats’ priority list, would cost $1.6 trillion if made permanent. Democrats could make changes to the credit to lower the cost of a permanent extension but some tweaks may run afoul of Biden’s pledge not to raise taxes on anyone making under $400,000.

Manchin cited several issues with the child credit during Monday’s radio interview. He said he opposes households earning up to $400,000 having access to the credit, as expanded by the 2017 tax law. But lowering that threshold would mean raising taxes in violation of Biden’s pledge.

The enhanced credit that Democrats passed in March, allowing for advanced monthly payments of up to $300 per child, phases out at $75,000 for an individual and $150,000 for a couple. It’s unclear if Manchin would want to lower those thresholds too, but he said he wants to target the credit to those that really need it, which he defined as someone making around $50,000 to $70,000.

Manchin also said he wants to require taxpayers claiming the credit to have a W-2 or 1099 form to show they worked during the tax year. He signaled he may oppose continuing advanced payments of the credit, saying, “At the end of the year, if they have no tax liabilities and they want to work, send them money.”

Another priority for most Democrats is lowering prescription drug costs. The compromise Democrats negotiated and put into the House bill would allow the government to negotiate prices on older prescription drugs under Medicare Part B and D and extend those prices to the private market.

Manchin said he didn’t like all the exemptions Democrats included.

“They’ve got an Alzheimer’s drug that’s still protected for 10 years, $56,000,” he said, referring to the price of a drug called Aduhelm that its manufacturer Biogen announced on Monday it would cut in half. “I said, if you’re going to negotiate, then negotiate. Don’t start picking and choosing and playing games.”

Climate concerns

Democrats also want to prioritize climate change. Sen. Edward J. Markey, D-Mass., on Sunday called for passing a standalone climate package, pulling out what’s already been largely agreed to by the House and Senate. “We cannot let this moment pass,” he said.

But Manchin signaled in his own Sunday statement that he’s not yet comfortable with the climate provisions Democrats have proposed, saying they “risk the reliability of our electric grid and increase our dependence on foreign supply chains.”

Manchin, who chairs the Senate Energy and Natural Resources Committee, said his panel has backed bipartisan investments in clean energy technologies and still believes innovation is the best way to reduce emissions.

“But to do so at a rate that is faster than technology or the markets allow will have catastrophic consequences for the American people like we have seen in both Texas and California in the last two years,” he said.

Manchin has not been specific about what clean energy provisions he would want to change in the package. But he’s provided general guidelines, saying he prefers a fuel-neutral approach that prioritizes incentives over penalties.

Wyden thinks his panel’s clean energy provisions that tie technology-neutral tax credits to carbon emission reductions meet Manchin’s objectives.

“Fossil fuels that get cleaner are eligible for incentives, just like solar or wind,” Wyden said. “This package is supported by utility companies and environmental advocates alike and it’s the only path forward that can secure 50 votes and achieve significant emissions reductions in the power sector.”

Jennifer Shutt and Laura Weiss contributed to this report.

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