President Joe Biden last year asked Congress to pass more than $4 trillion worth of infrastructure and economic proposals. Progressive Democrats sought to bump that up to $6 trillion. Now Democrats will be lucky to pass just a fraction of that before the midterm elections this fall.
Sen. Joe Manchin III, D-W.Va., has tentatively agreed to support a narrow, health care-focused version of Democrats’ original “Build Back Better” package containing just a two-year extension of expanded health insurance subsidies costing roughly $40 billion and a prescription pricing package that the Congressional Budget Office estimates will reduce deficits by nearly $300 billion.
(All spending, revenue and deficit reduction figures mentioned in this story reflect estimates over the 10-year budget window.)
If Democrats successfully advance the slimmed-down bill, it will represent barely a tenth of Biden’s original economic vision when combined with $550 billion in new infrastructure spending Congress enacted last year. With offsets in the infrastructure package, the roughly $600 billion spending expansion in both bills would be nearly fully paid-for — a far cry from the trillions in unoffset spending sought by progressives.
Manchin said he’s willing to keep negotiating on climate and tax provisions left out of the upcoming package and perhaps agree to something if inflation cools. But procedural and political obstacles make that a tall order.
“I am not going to be holding my breath for anything else,” Senate Majority Whip Richard J. Durbin, D-Ill., told reporters this week.
If the health care reconciliation package is all Democrats can get done, as Durbin predicts, they’ll be heading into an already tough election cycle this November having delivered on little of what they promised voters.
“This bill is obviously very, very far removed from what the American people want to see,” said Senate Budget Chairman Bernie Sanders, I-Vt., who originally circulated a $6 trillion plan, only half paid-for.
The following is a timeline of how Democrats’ “Build Back Better” agenda narrowed over the past year and a half.
March 31, 2021: Biden unveiled a plan for $2 trillion in new spending focused on physical infrastructure improvements. The plan included proposals to build and improve roads, bridges, water systems and broadband networks; retrofit homes and commercial buildings; modernize schools and child care facilities; boost manufacturing and research and development; and increase corporate taxes to pay for it all.
April 8, 2021: Speaker Nancy Pelosi, D-Calif., backed the White House’s pitch to split its economic plans into two packages — one emphasizing tangible infrastructure like roads, bridges and broadband and another focused on “human” infrastructure improving social programs for families. Progressives had been pushing for a bundled approach, wanting to pass both through the filibuster-proof reconciliation process to avoid having to compromise with Senate Republicans. But Democratic leaders decided to pursue a bipartisan bill for physical infrastructure. This would prove a fateful decision that may have ultimately limited how much of Biden’s economic agenda Democrats would later pass.
April 28, 2021: Biden released the second piece of his economic vision. The measure included a wide variety of proposals to improve conditions for families, such as universal prekindergarten and subsidized child care, paid family and medical leave, free community college and expanded tax credits. The estimated cost of that package ultimately exceeded $2 trillion, on top of the earlier “physical infrastructure” plan.
June 2021: Sanders circulated a preliminary budget outline proposing a roughly $6 trillion package of gross spending increases that on net would add $3 trillion to deficits over the next decade. One of the primary additions Sanders proposed to Biden’s economic plans was $500 billion for expanding Medicare to dental, vision and hearing coverage while lowering the minimum age of eligibility from 65 to 60.
July 13, 2021: Senate Majority Leader Charles E. Schumer, D-N.Y., Budget Committee Democrats and White House officials reached agreement on an overall spending target of $3.5 trillion for a filibuster-proof budget reconciliation package. With nearly $600 billion in new infrastructure spending moving on a separate track, the Democrats said they would fund nearly every major proposal Biden requested.
July 14, 2021: Manchin, who was focused on negotiating the bipartisan infrastructure bill at the time, said he was not ready to support the $3.5 trillion figure around which top Democrats coalesced. He said he wanted more information, in particular: how it would be paid for.
Aug. 10, 2021: The Senate adopted a fiscal 2022 budget resolution needed to unlock the vehicle for the filibuster-proof reconciliation package, but it did so without all 50 Democratic Caucus members affirming their support for a $3.5 trillion target. The resolution’s reconciliation instructions required at least half of that figure to be offset, providing some wiggle room to come in with lower overall spending.
Aug. 24, 2021: The House adopted the fiscal 2022 budget resolution after negotiations with its own Democratic centrists, who were concerned the House would try to rush through a reconciliation package that couldn’t pass the Senate.
Sept. 2, 2021: Manchin said Democrats should “hit the pause button” on the $3.5 trillion reconciliation bill because there were too many economic unknowns to warrant rushing ahead. Nonetheless, multiple House committees spent the month marking up their pieces of the package, which the House Budget Committee reported to the floor on Sept. 25.
Sept. 30, 2021: Manchin confirmed publicly that he had told Schumer back in July — and the duo signed a memo July 28 memorializing their conversation — that he wouldn’t support a package larger than $1.5 trillion. He said he based his spending ceiling on the amount of tax increases he thought Congress could pass to reverse aspects of the 2017 GOP tax law without returning to levels that would put the United States at a global disadvantage.
Oct. 1, 2021: Biden told House Democrats the budget package would need to be scaled down from $3.5 trillion to around $2 trillion as he asked them to hold off voting on the infrastructure bill until the party reached agreement on a revised reconciliation measure. At some point during private discussions, Sinema made clear to the White House and party leaders that she wouldn’t support corporate or individual tax rate increases, leaving tax writers scrambling to come up with alternatives.
Oct. 28, 2021: Biden presented House Democrats with a $1.75 trillion reconciliation framework, which was designed to be a consensus product that could get 50 votes in the Senate after he held weeks of private negotiations with Manchin and Sinema on how to pare back the bill. Tax rate increases had been replaced with alternate revenue raisers, like a tax on corporations’ “book” income and a “surcharge” on wealthy individuals.
Nov. 19, 2021: The House passed a roughly $2.2 trillion package that included a few provisions, such as four weeks of paid family and medical leave, that were not in the White House framework and that the chamber’s Democrats knew couldn’t get through the Senate amid Manchin’s objections.
Dec. 7, 2021: Manchin again called for a “strategic pause” in advancing the budget package given “unknowns” in the economy like the COVID-19 pandemic, how long high inflation would last and geopolitical factors.
Dec. 19, 2021: Manchin announced his opposition to the House-passed reconciliation bill and Senate tweaks drafted earlier in the month, pulling the plug on negotiations for the foreseeable future. “I can’t vote for it,” Manchin said. “I just can’t. I’ve tried everything humanly possible. I can’t get there.”
Early 2022: Democrats sought to keep hope for reviving the budget reconciliation package alive. Manchin said he would be willing to start from scratch but was too focused on other legislative matters in the early part of the year to entertain serious negotiations on reconciliation.
Late spring, early summer 2022: Manchin, Schumer and their staffs began holding regular meetings to see if they could resurrect pieces of the reconciliation package. They narrowed their focus to key three areas: climate and energy provisions, tax increases and enhanced enforcement and lowering health care costs. The rough plan was to raise $1 trillion from tax increases and prescription drug savings and use half of it to offset spending and half for deficit reduction.
July 14, 2022: Manchin told Schumer that all he could support in a summer reconciliation package were the prescription drug pricing provisions to which he had already agreed and a two-year extension of more generous health insurance subsidies set to expire at the end of the year.
July 15, 2022: Manchin clarified in a local radio interview that he was willing to continue negotiations on climate and tax provisions but would not agree to support any policy changes in those areas until inflation cools. Many Democrats believe Manchin will never agree to those provisions, leaving them with just the health care package that is trillions short of their initial spending goals. Biden said the Senate should “move forward” with the smaller reconciliation bill and get it to his desk before the August recess.