build back better

Manchin Might Not Be Biden’s Biggest Problem

Kyrsten Sinema, to Manchin’s right. Photo: Kent Nishimura/Los Angeles Times via Getty Imag

Over the past 24 hours, Nancy Pelosi canceled a vote on one of the president’s top legislative priorities because dozens of her caucus’s members were set to vote against it, congressional Democrats openly feuded for the press’s entertainment, and Politico exposed an explosive, secret agreement between Chuck Schumer and Joe Manchin that had been concealed from others in the Democratic leadership. Which is all to say that the outlook for Joe Biden’s legislative agenda grew much brighter.

That last bit reflects, in part, how dark things looked earlier in the week. Days ago, the New York Times reported that Kyrsten Sinema opposed any and all increases to the corporate and personal income-tax rate. Joe Manchin, meanwhile, was refusing to disclose what, precisely, it would take for him to support the president’s Build Back Better agenda. This silence grew more disconcerting as the week progressed and Thursday’s planned vote on the bipartisan infrastructure bill drew near.

From the moment that bipartisan agreement was struck in the Senate, progressives feared that their party’s most conservative members would lose interest in the rest of Biden’s agenda once the infrastructure bill hit the president’s desk. Having secured their bipartisan merit badges, Manchin, Sinema, and others might feel comfortable with no further legislation passing this year. If so, these so-called “moderates” would then be in a position to give Biden an ultimatum on his impending climate and social welfare bill: Go small or go home.

To preserve leverage over the moderates, House progressives insisted on the Senate passing some version of Biden’s “Build Back Better” program before they would vote for the bipartisan deal. House moderates countered by securing a promise from Pelosi to hold a vote on the infrastructure bill this Thursday. As that deadline creeped closer, Manchin and Sinema’s unwillingness to divulge concrete demands looked ever more sinister: What didn’t they want progressives to know? If they had remotely reasonable demands, wouldn’t they put them on the table in the hopes of pacifying the left and ensuring their infrastructure bill’s passage? Or was the left kidding itself about having leverage — were Manchin and Sinema secretly okay with Biden’s entire legislative agenda collapsing, if that’s what it took to “own the libs”?

In this context, Politico’s revelation of a secret agreement between Manchin and Schumer from late July — in which the former called for slashing $2 trillion off Biden’s agenda — actually served as a source of hope. Simply put, the West Virginia senator’s opening bid in negotiations over Build Back Better could be a lot worse.

Manchin’s terms for voting to initiate the budget-reconciliation process in July — the first step for passing Build Back Better — did include a lot of reactionary nonsense. The document suggests that the West Virginia senator’s avowed concerns with inflation and the deficit aren’t cynical. Many observers had assumed otherwise, since the idea that Build Back better could spark runaway inflation makes little sense: The package gradually increases federal spending by just 5 percent over a decade and offsets the bulk of that spending with (deflationary) tax increases. Yet in his memo to Schumer, Manchin suggested that he would only support a new spending bill if the Federal Reserve ended quantitative easing (QE), an expansionary monetary policy. Only an earnest inflation crank would make this sort of demand in a private document. (As it happens, the Fed recently signaled that it may soon end QE.)

Manchin also indicates that he would ideally like the reconciliation bill to reduce the federal deficit. You don’t score any political points by playing a deficit hawk in a memo the public can’t see.

Most disconcertingly, in his demands on “families and health” spending, Manchin says something about “targeted spending caps on existing programs” and “no additional handouts or transfer payments.” It is not clear what, exactly, these words mean. If Manchin were calling for de facto cuts to existing entitlement programs (say, by capping overall Medicaid spending), that would obviously be catastrophic. But the West Virginia senator hasn’t proposed anything like that in public. So it seems likely that these phrases refer mostly to his desire for means testing benefits and pairing them with work requirements, which are his public positions on new social-welfare spending. Those demands are cruel, and they would limit the bill’s impact on child poverty. But they are fairly standard for a Democrat of Manchin’s generation and background. And if progressives maintain a united front, they should be able to limit the damage.

If the document reveals Manchin to be a genuine deficit-phobe and welfare skeptic, it also suggests he’s more comfortable with raising taxes on the wealthy than one might have guessed. Unlike some moderate Democrats in the House, Manchin endorses ending the carried-interest loophole, raising the capital gains tax rate to 28 percent, the top personal-income tax rate to 39.6 percent, the corporate rate to 25 percent, and the corporate domestic minimum tax rate to 15 percent. Those measures, combined with more funding for IRS enforcement and savings from allowing Medicare to negotiate prescription drug prices — two reforms Manchin has voiced public support for — would likely generate enough revenue to “pay for” a Build Back Better package worth upward of $2 trillion. What’s more, Manchin endorses “dynamic scoring” in the document, which is to say, cost projections that take the future fiscal benefits of public investments in education and green infrastructure into account. Taken together, this gives progressive negotiators a decent amount to work with.

Of course, Manchin does say in the document, as he has previously stated in public, that he doesn’t want the overall package to cost more than $1.5 trillion and would like any excess revenue generated by his preferred tax increases to go toward deficit reduction. Critically, however, the document doesn’t characterize Manchin’s demands as a best and final offer. Rather, it merely says that “Senator Manchin does not guarantee [my emphasis] that he will vote for the final reconciliation legislation if it exceeds the conditions outlined in this agreement.” Schumer, for his part, scribbled, “I will try to dissuade Joe on much of this” below his signature.

In other words, the document seems to constitute a guarantee that Manchin will vote for a reconciliation package that meets all his criteria, not a promise to vote against one that doesn’t.

Finally, Manchin’s demands on climate look surprisingly benign (for a coal baron, anyway). He doesn’t declare his opposition to a clean energy standard, only asking that it be overseen by his Senate committee. He says he won’t support new subsidies for renewable energy unless fossil fuel subsidies are also maintained, but the current legislation already (unfortunately) maintains such subsidies. He wants carbon capture and storage (CCS) included in the bill, which it already is.

All of which is to say: If this is Manchin’s starting point, a deal that secures a lot of green investment and a significant expansion of the American welfare state seems possible. Which shouldn’t be taken for granted, considering that Democrats boast a single-vote Senate majority that hinges on a guy from one of America’s reddest states.

The big question is whether other moderates will march to Manchin’s drum. From the beginning, a key threat to Biden’s agenda has been divisions within his own party’s right wing. Some moderates, like Manchin, are more averse to increasing the deficit than raising taxes on the rich; others evince the opposite preference. If Sinema, Josh Gottheimer, and other tax-allergic moderates get on board with all of Manchin’s revenue raisers, it will be possible to enact a large portion of Biden’s program without increasing the deficit. As of earlier this week, however, Sinema was reportedly opposed to both new progressive tax increases and allowing Medicare to force down drug prices. If Manchin were just posturing about the deficit, then it would be possible to satisfy the pro-plutocracy Democrats’ demands while still enacting a large spending bill. Manchin’s apparent sincerity about the national debt forecloses that option.

Ultimately, though, if the Democratic leadership manages to broker an agreement that Joe Manchin and Bernie Sanders can both support, I doubt that Kyrsten Sinema would feel comfortable single-handedly killing it. And once a bill makes it out of the Senate, the bulk of the House’s moderate holdouts are likely to fall in line. After all, if the senator from the state Trump won by 40 points can support the bill, what excuse would they have?

It’s still possible that a rogue Senate Democrat will sabotage the party’s entire agenda. But as of this writing, it doesn’t look like Manchin will be the one.

Manchin Might Not Be Biden’s Biggest Problem