Having Sought a Home Run, Democrats Now May Settle for Singles and Doubles

GERALD SEIB, WALL ST JOURNAL

 In baseball, there is an endless debate about who is more valuable: a player who swings for home runs but also strikes out a lot, or someone who hits singles and doubles but has a higher batting average.

In the political world, Democrats in Congress and the White House made a choice early this year to swing for the fences, despite holding the slimmest possible margin of control in the Senate. With Sen. Joe Manchin’s declaration on Sunday that he won’t vote for President Biden’s giant Build Back Better package of social and climate programs, they struck out instead.

It’s probably time to go for some singles and doubles.

The most logical strategy for Democrats now is to deconstruct and then reconstruct Build Back Better to include fewer programs, but to also ensure that those programs are fully funded for the life of the bill. In other words, go deeper on fewer items.

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That will require the party’s progressive wing to do something that it has resisted since Mr. Biden’s victory: make tough choices about priorities. Mr. Manchin’s decision has shown that the price of demanding everything may be that you end up with nothing.

When Democrats’ anger subsides, this is likely where things are headed. In a letter to senators early Monday morning, Democratic leader Chuck Schumer declared: “We are going to vote on a revised version of the House-passed Build Back Better Act—and we will keep voting on it until we get something done.” In its own heated response to Sen. Manchin, the White House said: “The fight for Build Back Better is too important to give up. We will find a way to move forward next year.”

Sen. Joe Manchin’s main complaint was that his party was launching long-term programs with unrealistically short-term funding.

PHOTO: ANNA MONEYMAKER/GETTY IMAGES

As currently constituted, Build Back Better has multiple buckets of big but diverse proposals. It contains programs for children and families (expanded child tax credit, provisions for child care, expanded free prekindergarten education, paid family leave); funds to build more affordable housing; increased access to healthcare via tax credits and expansions of Medicare and Medicaid; and programs to combat climate change.

As it happens, this mélange of programs has made it hard for Democrats to craft a message to sell their efforts to Americans. They’ve found it hard to describe succinctly what they are trying to do. Meantime, Republicans haven’t had to defend their opposition to these individual proposals; they have been able to use the size and scope of the legislation to criticize what they call an expensive “socialist” overreach. It’s been relatively easy to oppose the ambitious approach rather than any of its individual components.

So perhaps Sen. Manchin has given Democrats an opportunity to craft a more focused program—say, for example, one centered on help for children and parents, packaged as a kind of 2022 family aid package. At a time when more young Americans are deferring having children because of a variety of difficulties, that approach could be presented as something of an antidote.

It also would be an approach easier to explain to voters in the 2022 election year. As an added political bonus for Democrats, it might compel Republicans to be on the record opposing specific programs that Democrats insist are popular when standing on their own.Sen. Manchin’s primary complaint was that his party was launching a lot of long-term programs with unrealistically short-term funding, with the net result being higher spending than advertised and inflationary consequences down the line. Doing fewer things with more defensible long-term funding would address that concern.

MANCHIN KILLS BUILD BACK BETTER

The Path Ahead for Biden: Take Manchin Seriously on Inflation

A key Democrat’s decision to pull support from the president’s sprawling climate and social agenda is rooted in the scope of the bill. President Biden is most likely faced with the difficult task of leaving some priorities of his party on the cutting-room floor is he is to have any hope of resurrecting his social policy agenda.

NY TIMES

By Jim TankersleyDec. 19, 2021


WASHINGTON — Senator Joe Manchin III, the West Virginia Democrat, effectively killed President Biden’s signature domestic policy bill in its current form on Sunday, saying he was convinced the spending and tax cuts in the $2.2 trillion legislation will exacerbate already hot inflation.

Economic evidence strongly suggests Mr. Manchin is wrong. A host of economists and independent analyses have concluded that the bill is not economic stimulus, and that it will not pump enough money into consumer pocketbooks next year to raise prices more than a modest amount.

The reason has to do with the pace at which the bill spends money and how much it raises through tax increases that are intended to pay for that spending. The legislation spends funds over a decade, allowing the taxes it raises on wealthy Americans and businesses, which will siphon money out of the economy, to help counteract the boost from spending and tax cuts.

The bill also does not provide the type of direct stimulus included in the $1.9 trillion pandemic aid package Mr. Biden signed in March — and which Mr. Manchin supported. Some of its provisions would give money directly to people, like a continued expanded child tax credit, but others would fund programs that would take time to ramp up, like universal prekindergarten.

Economists say the net result is likely to be at most a tenth of a percentage point or two increase in the inflation rate. That would be a relatively small effect at a time when supply chain crunches, surging global oil demand and a pandemic shift among consumers away from travel and dining out and toward durable goods have combined to raise the annual inflation rate to 6.8 percent, its fastest pace in nearly 40 years.

For months, Mr. Manchin has warned the president and congressional leaders that he was uncomfortable with the breadth of what had become a $2.2 trillion bill to fight climate change, continue monthly checks to parents, establish universal prekindergarten and invest in a wide range of spending and tax cuts targeting child care, affordable housing, home health care and more. He has cited both the risks of inflation and his fear that the package could further the balloon the federal budget deficit, saying several programs that are now estimated to end in a few years would likely be made permanent.

Over the past week, he has insisted that the bill shrink to fit the framework of less than $2 trillion that Mr. Biden announced this fall, and that — crucially — the legislation not use budget gimmicks to artificially lower the bill’s effect on the budget deficit.In a statement on Sunday, Mr. Manchin said Democrats “continue to camouflage the real cost of the intent behind this bill.”

White House officials have tried to promote the idea that the bill would reduce price pressures right away — an outcome economists have not entirely bought into. But the general economic consensus finds little evidence to suggest the bill risks exacerbating rising food, gasoline and other prices.

Today’s inflationary surge stems from a confluence of factors, many of them related to the pandemic. The coronavirus has caused factories to shutter and clogged ports, disrupting the supply of goods that Americans stuck at home have wanted to buy, like electronics, televisions and home furnishings.

That high demand has been fueled in part by consumers who are flush with cash after months of lockdown and repeated government payments, including stimulus checks. Research from the Federal Reserve has shown that inflation is most likely getting a temporary increase from the coronavirus relief package in March, which included $1,400 direct checks to families and generous unemployment benefits. But Mr. Biden’s social policy bill would do relatively little to spur increased consumer spending next year and not enough to offset the loss of government stimulus to the economy as pandemic aid expires.

White House aides have tried to make that case to Mr. Manchin — and the public — in recent weeks, pointing to a series of analyses that have dismissed inflationary fears pegged to the bill. That includes analysis from a pair of Democratic economists who warned about rising inflation earlier this year — Harvard’s Lawrence H. Summers and Jason Furman — and from the nonpartisan Penn Wharton Budget Model at the University of Pennsylvania. All of those analyses conclude that the bill would add little or nothing to inflation in the coming year.

The disconnect between economic reality and Mr. Manchin’s stated concerns has exasperated the White House, which is struggling with voter discontent toward Mr. Biden over rising prices, as well as an unyielding pandemic.

In a scathing statement about Mr. Manchin on Sunday, the White House press secretary, Jen Psaki, noted that the Penn Wharton analysis found Mr. Biden’s bill “will have virtually no impact on inflation in the short term, and in the long run, the policies it includes will ease inflationary pressures.”

White House officials, who along with party leaders have spent weeks trying to bring Mr. Manchin to a place of comfort with Mr. Biden’s bill, registered a sense of betrayal after the senator’s declaration.

Ms. Psaki said Mr. Manchin had last week personally submitted to the president an outline for a bill “that was the same size and scope as the president’s framework, and covered many of the same priorities.” He had also promised to continue discussions toward an agreement, she said.

Republicans celebrated Mr. Manchin’s statement as evidence that the bill, which Democrats were attempting to pass along party lines, was full of inflationary policies that even the president’s own party could not get behind.

Still, Mr. Manchin’s concerns leave the White House at least the possibility of a path forward, albeit not the one Mr. Biden set out to travel. Some Democrats and administration officials believe there is still a chance to recast the bill to suit Mr. Manchin’s demands, and to possibly pass it in the early months of next year.

The result would be a bill that would also be unlikely to fuel inflation next year — but which would be smaller. The number of programs it would contain would shrink, and it would include funding over the next 10 years to pay for the spending.

Such changes would force the White House to once again make difficult choices about which party priorities to leave on the cutting room floor.

Mr. Biden began the year with a $4 trillion agenda to overhaul the government’s role in the economy, fight climate change and invest in America’s children. He sliced off some of it for a bipartisan infrastructure bill he signed into law this fall, and has whittled down the rest in negotiations with moderates and progressives in his party, which controls the House and Senate by exceedingly narrow margins.

As they scaled back the bill, Democratic leaders had essentially two choices. They could focus on a few programs, like tax credits for climate change, an expanded benefit for parents that is meant to fight child poverty and making pre-K free for 3- and 4-year-olds across the country. Or they could pack as many programs as possible into the bill, setting some of them to expire after as little as a year to avoid ballooning the budget deficit, and hope that lawmakers would extend them in the future.

Leaders chose the “pack-it-in” strategy, in part because so many interest groups in their coalition, like environmentalists and labor unions, had competing priorities. Budget hawks urged a more targeted approach: fewer programs that were made permanent to avoid playing budget games that could fuel the deficit down the road.

Mr. Manchin, who is perhaps the most prominent deficit hawk in the Democratic Party, worried that temporary spending would become permanent without offsets, adding to the debt. Republicans stoked his fears by asking the Congressional Budget Office to analyze an imaginary bill in which every program was permanent, which showed ballooning deficits as a result.

White House officials pushed back hard on those projections, insisting that Mr. Biden would not extend any programs without offsets. But Mr. Manchin appears to have been unmoved.

Democrats are forced to regroup as Biden's signature spending bill stalls

 NPR

Updated December 16, 20217:23 PM ET 

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Senate Majority Leader Chuck Schumer, D-N.Y., had said he hoped the Senate would vote on President Biden's spending bill before Christmas, but that plan has stalled.

J. Scott Applewhite/AP

President Biden in a Thursday evening statement acknowledged the roadblocks his nearly $2 trillion social spending package faced, saying that it could take weeks before the package was ready for a vote. Still, he said he would continue to push for the bill to get enough Democratic support to pass through the Senate.

"It takes time to finalize these agreements, prepare the legislative changes, and finish all the parliamentary and procedural steps needed to enable a Senate vote. We will advance this work together over the days and weeks ahead," Biden said.

The statement came after Senate Democrats appeared on the verge of abandoning their pledge to pass Biden's plan before Christmas.

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Senate Majority Leader Chuck Schumer, D-N.Y., had insisted over the past several weeks that the bill would pass the Senate before the holiday. But Democrats have been unable to convince Sen. Joe Manchin, D-W.Va., the key holdout on the bill, to pledge his support.

Schumer avoided admitting defeat this week even as it became clear that plans for a vote were slipping.

"The bottom line is there are good discussions going on," Schumer told reporters on Wednesday. "We are moving with progress."

But by Thursday afternoon, little progress had been made.

Biden said he had spoken to House Speaker Nancy Pelosi, D-Calif., and Schumer and briefed them on discussions he and his staff have had with Manchin.

"In these discussions, Senator Manchin has reiterated his support for Build Back Better funding at the level of the framework plan I announced in September," Biden said. "I believe that we will bridge our differences and advance the Build Back Better plan, even in the face of fierce Republican opposition."

Sen. Mark Kelly, D-Ariz., downplayed the severity of the delay for the bill.

"I don't think it's going to be before Christmas," Kelly said. "But you know it shouldn't be, it should be when we're ready."

"It's likely to be one of the first things to take up after the holidays," he added.

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Democrats still can't get Manchin's support

The months-long struggle stalled out in the Senate after House Democrats mustered the votes to pass a version of the bill last month. The bill was snarled in familiar fights between Manchin and virtually every other member of his party over the cost of the bill and plans to significantly expand the social safety net.

Democrats hope to pass the legislation using a feature of the budget process, known as reconciliation, that would allow them to avoid a GOP filibuster and pass the bill with a simple majority. That requires unanimous support within their party, giving holdouts like Manchin veto power over the entire bill.

Manchin has raised concerns about a number of elements of the bill but his latest objections were related to the cost of the child tax credit. The American Rescue Plan, which was approved without GOP votes earlier this year, expanded the credit to reach more low-income families, increased the overall value of the credit and turned a portion of the credit into an monthly payment of up to $300 per child.

That expansion is set to expire at the end of the year.

Democrats planned to extend the monthly payments for one year but Manchin has raised concerns about the total cost, particularly if Democrats eventually try to make the changes permanent.

"I'm not opposed to the child tax credit," Manchin said in a testy exchange with reporters this week. "I've never been opposed to the child tax credit."

But Manchin has refused to publicly commit to what specific changes to the bill or the credit would satisfy him enough to win his support.