Disagreements on policy and a crowded Senate to-do list are further complicating Democrats’ path to passing their sweeping social safety net and climate package in some form or another.
Sen. Joe Manchin III said Tuesday he views the bill in its current form as “dead” and wants to tackle other legislative goals first, indicating Democrats aren’t any closer to a deal with the West Virginia centrist on spending provisions than they were weeks ago.
Manchin and several other Democratic senators confirmed Tuesday larger-scale talks on the package have yet to resume, and Sen. Bernie Sanders, I-Vt., dismissed the idea of negotiating any relief from a $10,000 cap on state and local tax deductions, another issue dividing the caucus. In the Senate, Democrats can’t lose any votes and pass the roughly $2 trillion budget bill through the reconciliation process, which bypasses united GOP opposition and allows for a simple majority vote.
Manchin said Tuesday that Democrats will need to start talking about the package again, but that he wants to address government funding, which is set to run out Feb. 18, and efforts for bipartisan election overhaul legislation first.
Further restricting Democrats' options on "Build Back Better," or even a bite-sized version of it, is the fact that Sen. Ben Ray Luján, D-N.M., who suffered a cerebral stroke, is out recuperating from brain surgery, his office said Tuesday. That leaves Democrats short of votes to pass anything without GOP support in the 50-50 chamber, though party leaders expressed confidence Lujan would be back soon.
"We look forward to his quick return to the Senate and I believe the Senate will be able to carry forward with its business," Senate Majority Leader Charles E. Schumer told reporters Tuesday.
Manchin said he didn't know if he could support a slimmer version of the previous package, which exceeded his fiscal targets and included some provisions he didn't like. “We’ll see what people come up with,” he said.
Manchin, who leads the Senate Energy and Natural Resources panel, had expressed support in recent weeks for the roughly $500 billion of clean energy provisions in the bill, but on Tuesday he suggested that too could be up for further debate.
“There’s still some things we’re working on there,” he said. “We’re looking at everything now. Inflation’s different than it was. Everything’s different than what we had before.”
Manchin offered two broad areas he’ll expect to be in any bill: a “fair and equitable” tax code that makes sure “everybody pay their fair share and especially the wealthy,” and provisions that address drug costs.
Fellow Democrats said they didn’t believe Manchin’s stances had shifted but that they have significant work to do before they have a final package.
Schumer said Democrats are “fighting hard” for the bill but declined to say how he’ll move ahead with it.
“There are lots of provisions in that bill that are very important — many of which Sen. Manchin supports such as, say, drug pricing,” Schumer said. “So we are continuing to work on it and there are conversations going on between Sen. Manchin and different senators right now.”
Those talks have been limited to smaller and one-on-one conversations since Manchin said in December on Fox News that he wouldn’t back the package in its current form. Sen. Debbie Stabenow, D-Mich., said negotiations on the package haven’t started again in earnest this year, and Sen. Bob Casey, D-Pa., said he expects more individual conversations to continue for “a little while.”
Grasping for 'SALT'
Some discussions, though, are stalled or broken down entirely. Talks on a particular and controversial piece of the bill — lifting the $10,000 limit on deducting state and local taxes, known as the "SALT" cap — have disintegrated.
“I think right now there is a growing consensus that given the crises facing working people, SALT is not … a major priority,” Sanders said.
While Sanders was critical of the House-passed provision to raise and extend the cap as too big a giveaway to the wealthy, he took the lead last year in negotiating an income-based exemption from the limit with proponent Bob Menendez, D-N.J. Those efforts have halted completely, with Sanders and Menendez now at odds.
The impasse threatens the legislation as a whole. A trio of House Democrats from high-tax blue states where the GOP-created cap hits hard have said they’ll reject a tax and spend package without SALT relief. While Democrats can currently lose four votes in the House and still pass the bill, other members could vote no, with the bill likely to see an overhaul from what the chamber passed.
Manchin's stance could also complicate SALT talks. He hails from a state where constituents don't rely too heavily on those deductions, and lifting the cap is expensive, at least in the short term.
House Democrats' proposal to lift the cap to $80,000 would lose $230 billion in tax revenue over the first five years, before making up that lost ground and more in the years after. Under current law, the SALT cap disappears altogether after 2025, so extending it makes SALT a revenue raiser.
"It's extremely costly," Manchin said. "You're talking about they want to expand it? Oh yeah, no, it's too expensive. … I haven't gotten into that one at all. I mean, that's not part of the policy we've been even looking at."
From the SALT impasse to Manchin’s demands to limit the child tax credit and other spending provisions, Democrats still have significant portions of the package to hammer out and few plans to do so in the near term.
“We’ve got a good bit of work to do,” Casey said. “I don’t think we should be as deadline-oriented as we were before. I would have preferred we had this done by Christmas, but I don’t think there’s any hard and fast timeframe.”