Democratic Senator Joe Manchin wants the social spending package that would encompass the bulk of President Joe Biden’s economic agenda cut by more than half to $1.5 trillion.
Manchin’s position, reinforced by him on Thursday, leaves Democrats far from an agreement on the so-called reconciliation bill, which spans spending on health, education and climate initiatives. Progressive Democrats have argued that they already compromised down in reducing their demands from the $6 trillion that Senate Budget Committee Chair Bernie Sanders had originally sought.
Progressives have vowed to block a separate $550 billion infrastructure bill if there’s no deal on the social-spending program. Manchin laid out his stance, speaking to reporters, hours ahead of a House vote on that bill, prospects for which remain in doubt — party leaders have engaged in a series of meetings to try to bridge differences between the moderates and progressives.
Manchin said the reduced social spending total is “basically what we could do and not jeopardize our economy.” He said Democrats could campaign on the remainder of the $3.5 trillion package during the November 2022 midterm elections.
“There’s many ways to get where they want to, just not everything at one time,” Manchin said of the demands for more spending from more-progressive Democrats.
Congressional Progressive Caucus Chair Pramila Jayapal said she’s willing to talk with Manchin, among others, about the path forward.
Progressive Senator Elizabeth Warren said she doesn’t see Manchin’s demand as one that couldn’t change.
“We are all Democrats and we know what we need to get done,” Warren said. “We are in negotiations, all Democrats. Everyone is trying to row in the same direction.”
White House press secretary Jen Psaki declined to give any details of how Biden has responded to Manchin in their private discussions. She said nothing has been settled on the topline figure for the tax and spending package or its individual components.
‘Give a little’
“This is an ongoing discussion, an ongoing negotiation,” Psaki said. “That’s going to require all sides to give a little.”
Manchin’s position echoed a stance he took in a memo dated July 28 outlining his views to Senate Democratic Leader Chuck Schumer, which was reported earlier by Politico and confirmed by a Senate aide. In that document, Manchin asked that Congress wait until Oct. 1 to begin debate on the spending package and not disburse any funds until after all money from the $1.9 trillion COVID-relief package enacted in March was spent.
Manchin has recently been distributing his summer memo to Senate colleagues, in response to criticism that he hasn’t clearly declared the changes he seeks.
Manchin and Senator Kyrsten Sinema of Arizona have been key holdouts on the spending package. Sinema’s office on Thursday rebutted complaints from some other lawmakers that she hasn’t set out her terms for a deal, saying in a statement that she also provided detailed positions, including dollar figures, to Biden and Schumer in August. The statement didn’t give a hint at Sinema’s stance, saying that she does “not negotiate through the press.”
Manchin also said any new programs should be means-tested and that the tax offsets should include elimination of the carried-interest provision that especially benefits private equity firms.
That element has been backed by Senate Finance Committee Chairman Ron Wyden, while the House Ways and Means Committee proposed a severe limitation on what some lawmakers call the carried-interest loophole.
Manchin in his summer memo also called, as a basis for the outline of the social-spending bill, to wait until the Federal Reserve ended its quantitative easing policy. Since that list of demands was made, Congress passed — with Manchin’s vote — the budget resolution outline the memo was addressing. The Fed has also now signaled that it will probably start winding down its asset-purchase program soon.
Manchin has publicly urged Federal Reserve Chairman Jerome Powell to end the central bank’s quantitative easing program.
Manchin, whose home-state economy relies on coal production, also sought assurances in the July memo that fossil fuel breaks wouldn’t be repealed if clean energy credits were extended and that tax credits for electric vehicles would be extended to include hydrogen.
The memo showed that Manchin, as chairman of the Senate Energy and Natural Resources Committee, sought control over emerging policy to compel utilities to use more clean energy and wanted the policy to be “fuel neutral.”
Manchin has since criticized a program proposed by House Democrats that would reward utilities that increase the amount of clean energy they use and penalize those who don’t. The coal industry has said that could end the use of coal-fired power by the end of the decade.
— With assistance from Erik Wasson, Laura Davison and Ari Natter