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Biden OKs health care-focused budget pact struck in Senate

Sen. Joe Manchin III wants to keep working on tax and climate pieces, but health care subsidies face August deadline

Sen. Joe Manchin III, D-W.Va., is seen in the Capitol on Thursday.
Sen. Joe Manchin III, D-W.Va., is seen in the Capitol on Thursday. (Tom Williams/CQ Roll Call)

President Joe Biden on Friday endorsed a plan hatched by two key Senate Democrats to pass a budget reconciliation package that would help lower the cost of prescription drugs and protect millions of households from health insurance premium spikes, even if it leaves out important clean energy priorities.

Biden said he’s readying “strong executive action” on climate change in the absence of legislation. He didn’t specify, but in a statement he said administrative moves would boost domestic manufacturing, create jobs and protect against future gas price increases.

“Families all over the nation will sleep easier if Congress takes this action,” Biden said of the health care measure that’s being drafted. “The Senate should move forward, pass it before the August recess, and get it to my desk so I can sign it.”

Biden’s comments come after Sen. Joe Manchin III, D-W.Va., said Friday that he told Majority Leader Charles E. Schumer that he wanted to wait until after the July inflation figures came out before moving forward with long-awaited tax and climate spending legislation. 

In an interview Friday with WV MetroNews host Hoppy Kercheval, Manchin said he told Schumer that if legislation must move before the August recess, he could only support parts of the budget reconciliation package that would allow Medicare to negotiate prices with pharmaceutical companies and extend expanded health care premium subsidies for two years. 

Late Thursday night, The Washington Post broke the news that Manchin had told Schumer he could not support clean energy spending and tax credits or tax increases on wealthy individuals and corporations at this time. 

[Manchin upends effort for a downsized ‘Build Back Better’]

Manchin said Friday the June consumer price index data released Wednesday that showed inflation climbed 9.1 percent over the previous year led him to tell Schumer to wait on the tax and climate pieces of the legislation. 

“That was an alarming figure to me, higher than anything for 40-plus years,” he said. “So I said, ‘Oh my goodness, let’s wait now. This is a whole new page.’” 

The next consumer price index data release is set for Aug. 10, when the Senate is scheduled to be in recess for its August break. Manchin has said Sept. 30 is the real deadline for the budget negotiations, since that’s when the underlying blueprint enabling passage of a filibuster-proof reconciliation bill expires.

But the problem for top Democrats is that by mid-August, many states will announce premiums for health insurance purchased on the exchanges set up by the 2010 health care law. Notices will go out in October — well in advance of the midterm elections — and if the subsidies aren’t extended by then, consumers will see their premiums will increase significantly.

So the urgency of extending those larger exchange subsidies combined with passing prescription drug pricing legislation, which many Democrats view as delivering on a prime campaign promise, may be enough to get a health care-only budget package over the finish line for starters.

“Seize the day! If we can get relief from the spiraling cost of prescription drugs facing American families, take it,” Senate Majority Whip Richard J. Durbin, D-Ill., tweeted on Friday.

House Ways and Means Chairman Richard E. Neal, D-Mass., on Friday sounded amenable to passing the health care-focused items Schumer and Manchin have been able to agree on. “If we can copper-fasten those, it seems to me that that’s a good idea,” Neal said.

Lowering drug prices and reducing the deficit are two priorities for Manchin, and the slimmed-down package might yield roughly $250 billion in deficit reduction over a decade.

But it would leave the rest of the party’s domestic agenda in tatters, and marks the second time that Manchin called off broader reconciliation talks with top Democrats after he walked away from negotiations in December.

“I’m not sure what is in the bill. We haven’t seen that,” Speaker Nancy Pelosi told reporters Friday. “But I would be very, of course, disappointed if the whole saving the planet is out of the bill.”

A Senate Democratic aide said Friday that the drug pricing language next week will go through the formal “Byrd bath” process of scrubbing it for any issues that could trigger a challenge under the Byrd rule, which governs what provisions are acceptable in reconciliation bills. That’s a critical step before the health care measure can reach the floor.

September scramble

While there’s still a small window for action in September, getting anything done then on remnants of Build Back Better would be a tall order.

Manchin said Democrats are worried that Senate Minority Leader Mitch McConnell, R-Ky., will hold a continuing resolution needed to avoid a partial government shutdown “hostage” if Democrats are continuing to work on reconciliation. The deadline for that stopgap funding bill, known as a CR, is also Sept. 30.

Manchin said he and Schumer had been moving in a productive direction on energy negotiations, and said he would continue to negotiate with Schumer. 

“I’m not stopping,” he said. “This is rhetoric, I’ve been through this all my life politically… I would not put my staff through this, I would not put myself through this, if I wasn’t sincere about trying to find a pathway forward to do something that is good for our country.”

Neal said he’s ready to keep the talks going with Manchin in hopes of some sort of September deal.

He pointed to Manchin’s openness during the Hoppy Kercheval interview Friday to parts of the broader tax package in the earlier “Build Back Better” bill the House passed last November. Manchin said a domestic corporate minimum tax “makes sense” broadly, though he nixed another big House-passed revenue raiser, which would’ve increased taxes on U.S. multinationals’ foreign earnings.

But to pass a second filibuster-proof reconciliation bill, Democrats would first need to adopt a new budget resolution, a time-consuming process that seems unlikely at this stage.

“I’m looking to getting this deal done,” Neal said. “And I just don’t know that this opportunity will avail itself again.”

Frustration boils over

It’s clear that frustration with Manchin, who is chairman of the Senate Energy and Natural Resources Committee, among rank-and-file Democrats was reaching a boiling point on Friday.

Rep. Pramila Jayapal, D-Wash., who leads the Congressional Progressive Caucus, said she wasn’t sure she could trust Manchin even to follow through on the health care-only deal. 

“Look, Sen. Manchin has said a lot of things. Every time what he makes clear over and over again is that he can’t close a deal, and that you can’t trust what he says,” Jayapal said Friday. “I just don’t believe until something lands here that there is anything.”

She added that “the single biggest thing that has hurt our chances for the midterm [elections] … is the failure of Sen. Manchin and the Senate to act on passing some version of Build Back Better.”

Some Democrats are also starting to urge more punitive measures against Manchin, such as removing him as chairman of Senate Energy and Natural Resources.

“We have an opportunity to address the climate crisis right now. Senator Manchin’s refusal to act is infuriating. It makes me question why he’s Chair of ENR,” tweeted Sen. Martin Heinrich, D-N.M., an Energy committee member.

House Budget Chair John Yarmuth, D-Ky., who like Neal has been working for much of the past year to get a reconciliation deal done, echoed Heinrich. He suggested Democrats replace Manchin as chair with a leading GOP centrist — Sen. Lisa Murkowski, R-Alaska.

“We’ve got one person who’s trying to dictate a policy for the entire country and that’s a shame,” Yarmuth said Friday. “If I were Chuck Schumer right now, I would go to Lisa Murkowski and ask her if she’d like to be chair of the Energy committee.”

Lindsey McPherson, Laura Weiss, Ellyn Ferguson, Jessie Hellman, Ariel Cohen, David Lerman and Niels Lesniewski contributed to this report.

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